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It's looking up for New York City office towers

By BELINDA ROBINSON in New York | China Daily Global | Updated: 2022-09-20 08:45

New York Governor Kathy Hochul is betting workers will eventually return to the office and is backing one of the largest real estate development projects in US history-10 towers of mostly offices in Midtown Manhattan.

They would be built around Penn Station, one of the busiest intercity rail stations in the world. It served more than 600,000 passengers per weekday as of 2019.

Empire State Development, the state's economic development agency overseeing the project, in July decided to push ahead with the project that will change the face of the area.

But the proposed multibillion-dollar project advances as uncertainty remains over the fate of commercial real estate, especially office space, as many companies find flexible ways for employees to work outside the office.

Plans for the Penn Station redevelopment have been in the works for more than a decade. Hochul inherited the project from former governor Andrew Cuomo, who was forced to resign last year amid sexual harassment allegations.

Brian Fritsch, communications director at nonprofit Regional Plan Association, believes that the redevelopment could be positive.

"I can't think of a better place to build density than right around Penn (Station)," Fritsch told China Daily. "It's been a neighborhood that's been disinvested and just not seeing the type of investment that other parts of Midtown and Midtown South in this case have seen."

Kevin Younis, executive deputy commissioner and chief operating officer of Empire State Development, said in a statement that it will "spur a revitalization of the business district surrounding the station for decades to come".

Trains Before Towers, a group of residents and transit advocates, have criticized the project, suggesting that it will "devastate the neighborhood" because it could displace 473 businesses and 128 housing units.

The newly built Penn Station would have 18 million square feet (1.67 million square meters) of mostly office space surrounding Madison Square Garden, above Penn Station.

The towers would have new entrances to the transit station, but no new train tracks will be created. Upgrading Penn Station alone is expected to cost $7 billion.

More than 250,000 businesses are in New York City, and office workers account for a third of all jobs in the city compared with a quarter in the rest of the United States.

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