In the latest round of what appears to be a feud between Secretary of Transportation Sean P. Duffy on one side and New York Gov. Kathy Hochul and the New York Metropolitan Transportation Authority (MTA) on the other, POTUS 47’s SECDOT sent the MTA packing when it comes to plans for a “new” Penn Station New York (PSNY). He has given the nod to Amtrak, even though he has criticized “America’s Railroad” on other grounds.
A Release and Two Letters
The news came in a “press release” from the U.S. Department of Transportation dated April 17. It began by saying: “Under the leadership of [POTUS 47], U.S. Department of Transportation Secretary Sean P. Duffy announced today that the Federal Railroad Administration (FRA) is taking bold action to protect American taxpayers by withdrawing the Metropolitan Transportation Authority (MTA) from leading the Penn Station Reconstruction project in New York City. Instead, Amtrak, backed by USDOT, will spearhead this critical infrastructure initiative.” However, the next paragraph announced the termination of a grant to Amtrak for the purpose: “As part of this shift in approach, FRA is also rescoping and slashing the federal grant to Amtrak for project development. This will save taxpayers approximately $120 million while still ensuring a safe, modern and efficient transit hub for the nation’s financial capital.” Then, USDOT said: “The Administration determined that USDOT and Amtrak can together deliver a world-class Penn Station. Since Amtrak owns the station, which is an essential asset serving more than 10 million Amtrak riders annually, there is no reason to delegate leadership of this important project.”
If the implication of the USDOT’s announcement is that Amtrak can deliver a better station without a funding grant than the MTA could, the next paragraph quoted Duffy seemingly confirming that. “[POTUS 47] has made it clear: The days of reckless spending and blank checks are over … New York City deserves a Penn Station that reflects America’s greatness and is safe and clean. The MTA’s history of inefficiency, waste and mismanagement also mean that a new approach is needed. By putting taxpayers first, we’re ensuring every dollar is spent wisely to create a transit hub all Americans can take pride in.” DOT instead called for a public-private partnership (P3) model “harnessing private sector innovation and capital to minimize financial risk to taxpayers. This approach will drive efficiencies, reduce costs and deliver results faster than traditional government-led projects.” Not surprisingly, the DOT document did not mention specific examples of the alleged “inefficiency, waste and mismanagement.”
The same day, FRA Chief Counsel Kyle Fields wrote to MTA CEO Janno Lieber, informing him that the MTA grant had been withdrawn, and that Amtrak would be the sole grant recipient. Fields prefaced the announcement this way: “At the time of the FY24 FSP-NEC selection announcement, FRA informed Amtrak and MTA it would be necessary to perform additional analyses and conduct stakeholder and public outreach prior to FRA making class of action determinations under the National Environmental Policy Act (NEPA) and initiating the environmental review for Penn-X and Penn-R. FRA has determined the necessary planning for reconstruction and expansion of Penn Station will be conducted under a single grant, led by Amtrak.”
The announcement itself followed: “To that end, this letter provides notice to MTA that FRA is withdrawing its selection of the Penn-R project for project development activities under the FY24 FSP-NEC program.” “FSP-NEC” refers to the Federal-State Partnership for Intercity Passenger Rail Program for the Northeast Corridor under the proposed Penn Station Capacity Expansion Project (Penn-X) and the proposed Penn Station Reconstruction Project (Penn-R). Penn-X had been awarded to Amtrak, while Penn-R had originally been awarded to the MTA but will be given to Amtrak instead.
Fields also wrote to Amtrak President Roger Harris. But, again, the news was not positive. After the two introductory paragraphs, which were like those in the letter to Lieber, Fields continued: “In addition, FRA believes robust planning is necessary to ensure services objectives and preliminary alternatives are based on updated ridership and operations analyses, as well as build stakeholder support. FRA will work with Amtrak to assess and evaluate regional service options to identify improvements with the goal of optimizing service and recognizing fiscal constraints. FRA expects that Amtrak, in close coordination with FRA, will lead this effort. The additional planning work will help to ensure the success of this ambitious and transformative passenger rail improvement project while preserving accountability for any federal dollars that will be spent.” Then came the bad news: “FRA will reduce the amount of the award of Amtrak’s FY24 FSP-NEC grant by the appropriate amount to reflect the focus on planning for reconstruction and expansion of Penn Station.”
The “Background” paragraph at the end of the USDOT release says: “The MTA’s $72 million FSP Program grant was awarded in November 2024 and intended for project development related to station reconstruction alone. With the reduced allocation in its separate FSP Program grant, Amtrak can pursue a master developer to examine both reconstruction and potential expansion of the station. The Administration’s new strategy prioritizes fiscal responsibility, private sector expertise, and Amtrak’s leadership to transform New York Penn Station into a world-class facility while safeguarding taxpayer dollars.” With the MTA slated to lose $72 million and a stated total of $120 million in savings for the feds, the reduction in funding for Amtrak would be $48 million, despite its recently broadened mission.
Neither Duffy nor Fields provided any details that, in this case, could be the place where the proverbial “devil” can be found. In essence, the MTA is out of the picture when it comes to plans for changes at Penn Station, even though the Long Island Rail Road operates more trains than New Jersey Transit into PSNY, and both use it for multiple times the number of Amtrak trains that stop there. In addition, there is ongoing construction along the Hell Gate Bridge route (which Amtrak uses for its trains to New England) in preparation for local service to be operated by Metro-North from Penn Station. Amtrak is still in the picture, although its grant is being reduced, and although the scope of its mission apparently is not. The cited documents do not ascribe any specific wrongdoing or other fault to the MTA or Amtrak, although it is clear that both have lost some funding.
What “Players” Say
On April 18, WNYC transportation reporter Stephen Nessen reported for NPR on the Penn Station situation, including the recent renovations undertaken by the MTA for the Long Island Rail Road. He reported: “The New Jersey Transit and Amtrak sides of the terminal, in contrast, are a rat maze of low-slung ceilings and confusing corridors with dingy lighting. Until yesterday, the three agencies had been cooperating on plans to upgrade the other sections of the train hall and expand the number of tracks underground to meet increased demand from riders, but that appears to be over. In a letter, the Federal Railroad Administration says Amtrak will now be the lead agency when it comes to redeveloping Penn Station. Transportation Secretary Sean Duffy slammed the MTA, writing that its history of inefficiency, waste and mismanagement meant it had to step aside.”
As I have noted, there is an ongoing dispute between Duffy’s DOT and the MTA over the recently implemented Congestion Pricing toll. Although it has generally been reported as doing well toward its objective of reducing congestion from vehicle traffic in Midtown Manhattan and further south on the island, Duffy objects to it and ordered the toll terminated. Hochul and the MTA, a state agency, have refused to carry out Duffy’s order, and the MTA and its subsidiary the Triborough Bridge and Tunnel Authority (TBTA), which collects the tolls, are fighting Duffy’s DOT in federal court. April 20 was Duffy’s latest deadline for discontinuing the toll, but Hochul has refused to do that, unless a court orders the MTA and TBTA to cease collecting the money. That has not happened.
Despite the friction with Duffy, Hochul issued this statement on April 17: “In multiple meetings with [POTUS 47], I requested that the federal government fund the long-overdue overhaul of Penn Station. Clearly that effort has been successful, and I want to thank the President and Secretary Duffy for taking on the sole responsibility to deliver the beautiful new $7 billion station that New Yorkers deserve. This is a major victory for New Yorkers, and the use of federal funds will save New York taxpayers $1.3 billion dollars that would have otherwise been necessary for this project.”
MTA CEO Janno Lieber said: “Governor Kathy Hochul has prioritized the reconstruction of Penn Station for years, and we’re glad the federal government is focusing on it now. The MTA’s 33rd Street Concourse project was the first major improvement to Penn Station in decades—and we finished it on time and under budget. More than 100 million MTA customers—two-thirds of Penn Station’s total ridership—use the facility every year. As the major leaseholder in the station, we expect to participate in the adAinistration’s and Amtrak’s efforts to ensure future plans meet the needs of everyone who uses it.”
Amtrak’s statement said: “In collaboration with the Federal Railroad Administration and our railroad partners, Amtrak is committed to improving current conditions and increasing train capacity at New York Penn Station while respecting the history and vibrancy of the surrounding neighborhood … It is essential that options are evaluated on their ability to meet the transportation needs of the region, and their ability to enhance the Northeast Corridor’s critical role in powering the national and regional economy.”
While it is unclear just what the future will hold for changes at Penn Station at this juncture, one of the results might be the return of a classically inspired edifice, like the original Penn Station, which was in operation only from 1910 until 1963. The Grand Penn Community Alliance, an organization that favors the classical style and reportedly has ties to POTUS 47, said: “The Grand Penn Community Alliance has had very positive and productive meetings with officials in Washington following our public unveiling last month. It is clear that our plan is the best plan worthy of the President’s bold vision for a reimagining of Penn Station while building a classical, world class transit hub and creating a vibrant neighborhood around it. This is the beginning of a new process and an opportunity for the kind of transformative development that our plan will allow, with a soaring new train hall, public park and a new arena across the street.”
Samuel Turvey, President of ReThinkNYC and ReThink Penn Station, has consistently favored a building that would replicate the 1910-vintage station as closely as possible, as well as advocated for through-running trains as a means for improving the utilization of existing station capacity. His statement said: “FRA reps confirmed that they will look at through-running to Mike Oreskes at West Side Spirit. We will reiterate that we want bona fide review and independence and not a ‘rounding up of the usual suspects’ as has happened in the past. This is good news, and I am cautiously optimistic that we will get a bona fide and independent review.”
Oreskes reported on April 18: “As part of the Administration’s intervention, The Federal Railroad Administration said it will examine whether expansion of the station can be minimized or avoided by overhauling train service to run Long Island Rail Road and NJ Transit through the station rather than ending their runs there. The FRA is also considering a request from transit advocates for an independent review of through-running, which the railroads have said won’t meet their need to double service by the next decade, a spokesman said.”
Turvey again called for through-running in an OpEd published on the Chelsea Community News website on April 21. Chelsea is the West Side neighborhood north of the Village and south of Penn Station. Turvey wrote: “The FRA and DOT are stepping into a train wreck. We are cautiously optimistic that they can improve things and hope to aid the effort. The Gateway Tunnels should be leveraged to allow for the implementation of unified regional rail via through-running in New York as is happening or has long ago happened in countless of our peer cities. We do not need to level a neighborhood to add capacity at Penn Station, spend a fortune on a deep cavern station to the south of today’s station or incrementally improve an abysmal above-ground station. The FRA apparently gets this and are asserting ownership and the beginnings of a geometric management model instead of the Six Characters in Search of an Author-type chaos we have been dealing with for years.”
Rider-Advocate Views
Local advocates appear divided. Some are disappointed that the MTA has apparently been forced out of the picture. Others hope that the new change can lead Amtrak and USDOT to push for a plan that would benefit the entire Northeast Region, rather than concentrating only on New York City and State.
According to a report in The New York Times, Danny Pearlstein, Policy and Communications Director for Riders’ Alliance, linked the latest move to the dispute over the congestion toll. Pearlstein was quoted as saying, “They’re clapping back at the MTA and New York in an irrational way.”
Andrew Albert, Chair of the NYC Transit Riders’ Council and a rider-representative at the MTA Board, told me: “Regardless of who is in charge of overseeing the upgrades and expansion of Penn Station, because the LIRR and NJ Transit run the lion’s share of service into that terminal, it is imperative that they be involved in the decision about the upgrades to this most-important rail terminal in the country.” He also complimented the MTA on its work at Penn Station so far, saying that the LIRR upgraded the station in “a very nice way.” Specifically, he said: “It’s very user-friendly, it’s light and airy, and there are even departure boards on every vertical column running the length of the walkway between Seventh and Eighth Avenues.” Albert also noted that Amtrak has completed the Moynihan Train Hall west of Eighth Avenue, but, “This time Amtrak will be in charge of Penn Station elsewhere, where it does not have the lion’s share of the riders.”
Joseph M. Clift, former Planning Director for the Long Island Rail Road, told me: “People focus constantly on what they want to see, but the original Penn Station had almost nothing to do with moving people and trains. The basic focus was on appearances instead. While people talk about the ‘loss of Penn Station,’ Penn Station is still there when it comes to moving people and trains. The single biggest change is the loss of most intercity travel and the surge in commuter travel, but Penn Station still carries the results of being a combined station. The LIRR came up with a redesign of its portion of Penn Station in the mid-1980s to add access to its tracks for more riders by expanding vertical points of access to the platforms. Neither politicians, developers, nor architects ran the process; it was done by transportation planners. The access on the Amtrak part of the station is a D–, while the LIRR’s is an A–.” He added that removing the back offices from Amtrak’s portion of the station would create an environment that would work extremely well, allowing trains to leave as often as every five minutes. He said that everything should run from the Lower Concourse (LIRR) level, while plans and arguments are made about what should go above it. In other words, “It makes sense that a single concourse level close to the tracks will facilitate the movement of people at Penn Station.”
Clift posed a question for Amtrak: “Will you be smart and place all pedestrian functions at the lower level (the LIRR Concourse level), and will you remove all the back-office functions that take up space at and around that level, and punch stairways every 100 feet to improve vertical access to minimize the time required to get on and off the platforms?” His question raises one of several issues about the future of Penn Station expansion, whatever it might be.
Where Do We Go From Here?
It’s too early to tell what results could stem from the new directives from Duffy and the FRA. Things are changing fast in Washington, and it appears that many Americans might still be consumed with “PESD or Post Election Stress Disorder,” an expression coined by Railway Age Editor-in-Chief William C. Vantuono. It seems that, if any variable now holds power in Washington, it’s uncertainty.
In explaining this development, I concentrated on the ongoing events and statements from the players involved in this drama, as well as advocates who expressed their concerns on behalf of the riders. Now, I will look at the issues in terms of what I already know, what I don’t know, and what some possible outcomes might be for a future Penn Station.
In a way, what Duffy, Fields and their colleagues are doing appeared to come suddenly. It had been decided last year that Amtrak and the MTA would share the overall project, with each having specific responsibilities. New York Gov. Kathy Hochul also appeared to have her own role in the Penn Station saga, with a statement last month that indicated she does not want to demolish the buildings in Block 780 on the city tax map, located between Seventh and Eighth Avenues, south of Penn Station. I commented on that situation March 28.
There might be some factors I don’t know about yet, but it appears that the latest moves by Duffy and his subordinates represent the latest round in the battle he is fighting with Hochul over the Congestion Pricing toll that has been in effect since Jan. 5, and is succeeding in its goal of reducing automobile traffic that brings congestion to Midtown Manhattan and south.
What I Know
Duffy took pride in “saving the American taxpayers $120 million” by this move. That means $72 million the MTA will not get, along with another $48 million Amtrak will not get. Whatever project Amtrak will now spearhead will, of necessity, operate on a smaller scale than whatever projects the parties might have planned before Duffy announced his directive.
Hochul, MTA CEO Janno Lieber and Amtrak have all made statements that contend they are not complaining about the current state of affairs. They have sacrificed grant money, but they can now also disavow responsibility for future Penn Station projects. That includes the years and dollars that will be required to plan whatever might be built, as well as execute those plans. If anything goes wrong, including lack of sufficient funds to build whatever the planners can produce on likely reduced budgets, it will be difficult to blame the governor and/or the MTA and make that blame stick. With a difficult future looming for transit, including the three “transit railroads” that serve New York City, Hochul and the MTA might have been forced to relieve themselves of a potential painful headache that would almost certainly have come to pass.
The reduction in Amtrak’s grant, even with an expanded project purview, does not bode well for Amtrak, which is experiencing other difficulties. Even along the NEC, the railroad does not ride well south of Trenton. There are other high-priority projects there, like the Baltimore Tunnel, and they will also be expensive. With a Transportation Secretary that criticizes Amtrak and voted to zero out its budget when he was in Congress, the long remainder of POTUS 47’s so-far chaotic term will not be an easy ride for Amtrak.
There have also been many cancellations, annulment, and delays on New Jersey Transit lately. Some of them can be blamed on NJT’s difficulties with equipment and with getting crews for every run. It does not help New Jersey’s railroad that locomotive engineers belonging to the BLET overwhelmingly rejected an offer for a wage increase and could strike as soon as mid-May. Still, NJT runs many of its trains on the NEC (some as far as Trenton), and Gov. Phil Murphy has called Amtrak and NJT officials together to push them to improve the infrastructure. Amtrak is inspecting that part of the railroad thoroughly, but there is still a great deal of uncertainty about New Jersey service and about the railroad elsewhere in the Northeast.
Coupled with that are other events that affect Amtrak. Stephen Gardner was recently ousted from his position as CEO. That was not surprising, since he is a Democrat and made his reputation more as a political operative than as a railroader. Republicans now control the government, so a well-known Democrat would probably not be able to work as effectively with members of Congress and other officials as he could when there were more Democrats holding power in Washington.
What I Don’t Know
The rivalry between Duffy and his DOT on one side, and Hochul and the MTA on the other, is well-known and reported. They are true adversaries in federal court in the Southern District of New York over Duffy’s order to kill the congestion pricing toll. Hochul is fighting it, and the MTA is the lead plaintiff. To the extent the USDOT must have a “delivery partner” to keep the Penn Station projects going, it is reasonable to expect that the Department would choose Amtrak, if only because they are not adversaries in court. In fact, USDOT effectively owns Amtrak through its preferred stock (the voting shares). Duffy and his colleagues do not seem to have much to say about Amtrak that’s positive, but they are not official adversaries. What remains to be seen is the extent to which USDOT will continue to work with Amtrak, given the Department’s criticism of “America’s Railroad” and its order that Amtrak move forward with the Penn Station projects, despite less money to spend on fulfilling that assignment.
Duffy has threatened to withdraw federal funding for transportation projects in New York State if it does not submit to his directives. That weapon has been used to force states to adhere to a national policy, such as during the 1980s, when states risked losing highway funding if they failed to raise the legal drinking age to 21 (New York was one of the states that was forced to make that change). Yet, recent polls have not looked good for the POTUS 47 Administration, especially over economic issues like the recently imposed tariffs. New York might be a solid “blue” state where Democrats are strong, but a direct confrontation there could have the effect of costing the Administration some support in the battleground states that Republicans carried in the election last fall. The congestion toll is unique to New York with implications in New Jersey (also a “blue” state), but voters in some “red” and “purple” states might be put off by such an obvious show of federal coercion as a threat to “state’s rights.”
There has been talk of P3s for a Penn Station project, but there is also the possibility of true privatization for the entire NEC. There are two entities campaigning to manage and operate on the railroad. One is RAILNet-21, with backing by J.P. Morgan Bank, which is promoting an Infrastructure Management Organization (IMO) that would not run trains. Instead, it would operate, maintain and lease trackage rights on NEC segments owned by USDOT and operated by Amtrak. It would be financed by private investors. The other is AmeriStarRail, which proposes to run expanded service on the NEC and its branches. If Washington is truly interested in introducing private-sector management and money into the NEC, including in and near New York City, these opportunities exist today.
Perhaps the biggest “unknown” in the mix is the issue of what Amtrak can do to accomplish its mission of “modernizing” and expanding Penn Station, despite having to do so on a reduced amount of federal funding. Amtrak depends on support from Washington for its survival and has consistently prided itself on how well it has done with the limited amount of government support it receives. As I reported in the Passenger Rail Outlook for 2025, published in January in Railway Age and on this website on January 7, the Amtrak picture does not look good on any of the railroad’s three business lines: the long-distance network, state-supported trains and corridors, and the NEC.
It makes little sense to assume that Amtrak will flourish as a direct and proximate result of the financial shock of losing some of its federal support. That goes for the national level, as well as the local level in the New York area. It is expensive to build railroad and transit infrastructure today, especially in high-cost metropolitan areas, like in and around New York City. A few firms get most of the work, and the cost of the Gateway Program, with its projects between Newark and New York, keeps rising. Even if new facilities at Penn Station are financed separately from the components of the Gateway Program, any Penn Station planning and construction will be expensive. It will not become less so because of the feds cutting Amtrak’s grant for planning new construction at Penn Station.
Time for “No Build”?
Every study presents a set of alternatives for building a new project, and sometimes for operating it, too. One alternative that is always presented calls for maintenance, repairs, and sometimes minor and inexpensive improvements, but it does not include major investment. That alternative is often called “no build,” and it is included in studies for comparison with the various “build” alternatives presented.
In the case of Penn Station, circumstances might be moving toward a “no build” solution, or at most a relatively inexpensive set of projects. Duffy pitched his order eliminating the grant for the MTA and reducing the one for Amtrak as a means for “saving American taxpayers money.” It would be difficult for him or any other government official to reverse that position, especially since he has criticized both the MTA and Amtrak, usually harshly. Duffy’s own credibility could be jeopardized if he were to raise or restore the grants for organizations he has criticized so strongly. This means that, for the foreseeable future, the MTA is out and Amtrak will have less money to proceed with whatever it chooses to pursue regarding Penn Station. It is also unclear how much money Duffy’s DOT and FRA would give the private-sector firms that often bid on projects of this sort. That means projects would be reduced in scope, because there would not be sufficient funds available for larger, more costly projects.
Demographics and work customs also play a role, apparently moving toward less-expensive projects at Penn Station. Baby boomers are seniors now, and they are retiring, so fewer are working. That means there is less commuting to the office every workday than there had been in the pre-COVID past. Former LIRR Planning Director Joseph M. Clift says that the number of commuters on the LIRR peaked in the late 1980s. Beyond that, while some workers are returning to the office on a five-day basis, others are working there two or three days a week, while still others make the trip less often, if at all. I have commented and reported on this phenomenon regularly since July 2020.
Much of the existing capacity at places like Penn Station serves mostly commuters, with a sharper peak in the morning than after the workday ends. If through-running or other means for increasing the rate at which trains are cycled through Penn Station, especially during peak-commuting times, is put into effect, it would be possible to generate enough throughput to solve any capacity limitation by improving operations, rather than having to build a costly new station like the proposed Penn South. Simply stated, building the improvements necessary for through-running would cost much less than constructing a station like the proposed Penn South, especially since it would also be a stub-end station, which is currently an operational difficulty with some of the tracks at the existing Penn Station.
Time to Review Options
While withdrawing the MTA’s grant and reducing Amtrak’s, despite expanding its scope of work, can only be reasonably construed as bad news for those agencies, the coming changes can provide a new opportunity to think creatively and in an up-to-date manner about what is really needed at Penn Station.
Here are some questions that deserve careful thought and consideration: Is the proposed Penn South station necessary? Does a stub-end station there make sense? Can through-running be implemented without costly alterations to the existing infrastructure? More generally, can inexpensive projects allow the riders who would use the services that would be offered in the future sufficient access to service that expensive new infrastructure would not be necessary? Do private-sector plans like those at RailNet-21 for an Infrastructure Management Organization (IMO) to run the NEC and at AmeriStarRail to expand operations on the railroad make sense, given today’s financial and political realities?
Sam Turvey of ReThink Penn Station and ReThinkNYC has consistently called for through-running to alleviate capacity constraints, as I recently reported. I also recently completed a ten-part series on through-running, with much of that coverage devoted to Penn Station and the New York area. Turvey has also called for an independent review to consider that and similar issues. Other advocates have called for such a review, as well.
I don’t know what the future will hold, but I have some idea of it, given what I already know. We may soon learn whether recent changes from USDOT and the FRA initiate a genuine change in thinking, with independent, open-minded discussions, or will merely indicate politics as usual, now that one party has replaced the other in the halls of power in Washington.
