Unless we take the train or drive down on a regular basis or have family and friends there, a lot of us in our area don’t pay much attention to matters in New York City.
But what happens in the big city often affects what happens in the rolling hills of upstate New York, far away down there.
So we here in upstate should be paying attention to a development plan, worth $7.5 billion to $10 billion, being pushed by Gov. Kathy Hochul to renovate and expand Penn Station and redevelop a significant amount of property around it, including construction of 10 new skyscrapers. The plan to upgrade the run-down transportation hub would be one of the largest of its kind in the nation.
The project has come under scrutiny from some government watchdog groups, lawmakers and others for a lack of transparency, in particular regarding the scope of the plan itself and the degree of public and private financing needed to bring it to fruition.
So why should we upstaters care what happens to a train station in Manhattan?
Because according to a New York Times article this week — quoting a new report on the project commissioned by Reinvent Albany — state taxpayers could be forced to make up billions of dollars in lost tax revenue and construction costs.
According to the Times, the owners of the new buildings would make payments to the state to help cover part of the cost of the Penn Station renovation in lieu of paying property taxes. That revenue would come in part from leasing space in the skyscrapers.
That’s raised questions about whether the developers could raise enough money to pay off the station renovations and whether state taxpayers would eventually be on the hook for any shortfalls in the Penn Station plan – a figure some fear could reach $3 billion.
If the costs of redevelopment and renovations escalate and/or if real estate values drop, it could be a disaster for New York taxpayers – not just the city folk, but all of us.
In addition, the report says the developers of the office towers would receive tax breaks of more than $1 billion. We all pay those.
And, oh yeah, the CEO of one of the big developers on the project is a contributor to Hochul’s election campaign, raising questions about the governor’s enthusiasm for pushing the project.
A vote to move the project along could take place later this month. That’s why we need to care about it.
It’s why we need to contact our state representatives in Albany and call on them to ask questions about the plan, to demand full transparency, to challenge assumptions and to make sure taxpayers aren’t being taken for a ride by this project.
We ignore New York City at our own financial peril.
Pay attention or pay later.