Lieber Strikes Back: Questions Penn Station Costs, Declines Amtrak “Partner” Offer

The rift between Amtrak and the MTA is widening.

The head of the MTA derided as “simply bizarre” Amtrak’s planning for the transformation of Penn Station, saying there were “questions” about the cost, how the developer was selected and whether President Trump put his thumb on the scale.

“Perhaps there are good answers to all these questions,” said the official, Janno Lieber, CEO of the MTA. “Perhaps we are faced with only the appearance of impropriety.”

Lieber issued the broadside in a letter to Andy Byford, Amtrak’s man in charge of the Penn Station rebuild. Lieber rejected Byford’s renewed request that the MTA sign an agreement to become a full partner in the project, as NJ Transit has done.

“But in the current environment, it can hardly be surprising that we have chosen to proceed cautiously,” Lieber explained.

Lieber’s letter, shared by a federal official, deepened the already wide rift between the MTA and the Trump administration, which has fought the state agency’s congestion pricing plans and criticized its management of the Penn Station project before simply taking over last year.

“When the Trump Administration announced it was taking over the reconstruction project,” Lieber wrote to Byford, “we were cautiously optimistic, despite the typically gratuitous (and fact-free) snipes USDOT and Amtrak took at the MTA while doing so. But the process since then has been simply bizarre.”

Lieber’s attack comes at a crucial moment in the long-deferred effort to revitalize the busiest train station in North America. Amtrak, after a month’s long bidding process, just announced that it has signed what it calls a Pre-Development Agreement with a private consortium to manage and partially fund the project.

That consortium is lead by two global developers, Halmar, the US subsidiary of the Italian firm ASTM, and Skanska, the Swedish company. Amtrak says the project will cost between $7 and $8 billion.

“How much is it going to cost?” Lieber demanded. “Your chosen development team has been touting a version of this project for years, but no one has ever seen a real professional cost estimate. Where is the money coming from? I have never seen a project go this far without any accounting of how it is being paid for.”

Lieber noted that New York State had paid nearly two thirds of the cost of building Amtrak’s Moynihan Train Hall across Eighth Avenue from existing Penn Station. Existing Penn Station, while owned by Amtrak, is largely used by the MTA’s Long Island Railroad and NJ Transit.

“NYS made those commitments expecting that the federal government would in turn support and defer to the commuter railroads on a plan to improve existing Penn,” Lieber added. “And Governor Hochul has been clear that the State of New York is not paying for this Amtrak-controlled redesign.”

Lieber also tore into a crucial cost issue: “Whatever the cost, how much money will Jim Dolan and MSG get for the purchase of MSG’s Infosys Theater to enable the construction of a second major train hall on 8th Avenue?”

Previous news reports suggested Dolan’s price was $500 million, not to mention untold hundreds of millions--or even billions--for the demolition of the Infosys Theater and the reconstruction of all of Madison Square Garden’s mechanical, electrical and plumbing systems. Has an agreement already been reached? What other benefits, if any, will MSG and Dolan receive in the newly reconfigured space?”

A central element of the Amtrak plan is that Madison Square Garden remains in place above the station, but its theater on Eighth Avenue would be removed to make way for a dramatic train hall.

When the MTA oversaw the project Lieber had proposed a less ambitious reconstruction using the abandoned taxiway on the eastern side of The Garden, closer to Seventh Avenue, which, he noted, is where most users come and go.

That property is also owned by the Garden, but Lieber had argued that Dolan, CEO of the company which owns the Garden, should contribute it at no cost because the Garden benefits so substantially from being on top of the transit hub.

President Trump, in fact, has noted that Dolan told him he loves the Garden’s present location and resisted other proposals that would have required him to move.

Trump’s role was also on Lieber’s bill of particulars.

“What was the President’s involvement?” Lieber asked Byford. “You have repeatedly said that your “trump card is the Trump card” in shaping the project, although precisely what that is meant to imply seems to shift from audience to audience. The President reportedly met with bidders and with Jim Dolan during the procurement process and appeared with Dolan (and USDOT Secretary Duffy) during the NBA Finals. Did those discussions further taint Amtrak’s secret developer selection process? What exactly was discussed in those encounters?”

Byford has said he was required by law to maintain confidentiality during the bidding process, in which three finalists competed. He has promised robust public engagement now that a private developer has been chosen.

“How did this private developer, ultimately controlled by a foreign private equity firm, get chosen?” Byford asked, apparently referring to Halmar and its owner, ASTM, an Italian developer particularly known for building highways and recouping its investment from tolls.

“The entire selection process has been kept under wraps up to now. Did their executives’ close ties to the Trump Administration influence the course of the procurement?”

Peter Cipriano, a Halmar officer and now the CEO of Penn Transformation Partners, was an official in the US Department of Transportation in the first Trump administration, but at least one of the losing bidders also included supporters of President Trump.

Lieber’s attack on the Penn Station process was triggered by Byford’s renewed effort to get Lieber to sign a Memorandum of Agreement to partner with Amtrak on rebuilding Penn Station. “Let’s be partners in more than just name only,” Byford wrote, describing previous offers he had made to work out an agreement.

But the effort backfired. “There’s no point rebutting all the blah-blah about the Memorandum of Agreement you are insisting the MTA sign as a precondition of participation in the project,” Lieber shot back.

“The LIRR has a prepaid lease running for another 160 years (through 2186) that gives us approval rights for any construction within or affecting the northern half of the station,” Lieber noted. “As the lease states, ‘Amtrak shall have no right to make, or to cause or permit to be made, physical alterations in or to the LIRR Premises without LIRR’s consent’ and even alterations outside our space may not ‘unduly burden train operations’ or ‘affect the structural integrity’ of our leasehold.

“Given that reality, it makes sense for Amtrak to simply share information with MTA/LIRR and solicit our feedback. Instead, you have insisted on a ‘collaboration agreement’ that would constrain our ability to communicate with our riders and other stakeholders, and which explicitly put ‘potential modifications’ to our lease on the table, among other unnecessary and unacceptable terms. Not interested.”

It wasn’t immediately clear how this standoff with the MTA would shape the project. Byford, in the letter to Lieber urging closer cooperation, had said the project would proceed no matter what the MTA decided.

The Trump administration has said construction will begin by the end of next year.