Gov. Kathy Hochul is expected on Wednesday to unveil a scaled-down vision for an ambitious development in the heart of Manhattan that would include a redesigned Pennsylvania Station, putting her imprint on a signature project of her predecessor, according to state officials familiar with the plans.
Her proposal would make upgrading Penn Station, the widely detested rail station, a higher priority than other aspects of former Gov. Andrew M. Cuomo’s sweeping plan, including adding more tracks to the station.
Expanding the rail capacity at Penn Station, which handles trains operated by the Long Island Rail Road, New Jersey Transit and Amtrak, is considered critical to upgrading the region’s public transit infrastructure.
The Hochul plan would delay that expansion and make relatively modest changes to the larger Cuomo development plan in the area surrounding the station. It reduces the overall size but not the number of the 10 new towers that make up the development, whose scope had become a major concern of the community, and added below-market residential units and public spaces, including largely car-free bike and pedestrian streets that would span several blocks.
Despite the new focus, the administration is still calculating how much the entire development would cost — a reimagined Penn Station could be $7 billion, the officials said — as well as firming up how it would be funded and who would be responsible for funding it. Aides to Ms. Hochul said that she wanted the project to benefit New Yorkers first and foremost, directing state agencies to prioritize the new Penn Station and new public amenities.
“New Yorkers do not deserve what they have been subjected to for decades at Penn Station,’’ Ms. Hochul said in a statement. “This plan puts New Yorkers first, delivering the rider-focused transit experience and great neighborhood they deserve. Investing in Penn Station means investing in New York’s future as we build back from Covid.”
The proposed development would include some buildings that would be among the tallest in New York City and rise across several blocks surrounding the rail hub. Under Gov. Hochul’s plan, about 1.4 million square feet of space would be lopped off the buildings, just a 7 percent reduction from her predecessor’s proposal.
At 18.3 million square feet, the new Penn Station project would be slightly larger than Hudson Yards, the mega site of offices, residences and retail that opened in 2019 as the largest private development in American history.
Nearly three-quarters of the new towers would be office space, even though the pandemic has led many companies to embrace remote work and some to give up their offices. Roughly 16 percent of office space in the Midtown Manhattan area that includes Penn Station is available for lease, a record high, according to Colliers, a real estate service firm.
However, the project’s 1,800 residential units will now include 540 permanently below-market units, which was not part of Mr. Cuomo’s proposal, officials said. It also adds eight acres of public space, including a plaza roughly the size of Rockefeller Plaza that would limit car traffic — a reimagining of the streets around the station at a moment when many transportation advocates in the city believe more street space should be reserved for pedestrians and cyclists.
The Penn Station neighborhood development would still largely benefit a single company, Vornado Realty Trust, one of the city’s largest office developers, which owns four sites in the development zone and part of a fifth.
Steven Roth, the company’s chief executive, has described his vision of skyscrapers on Vornado sites around Penn Station as its “Promised Land.” On Tuesday, Mr. Roth said on an earnings call that he remained upbeat over the future of the project.
“We are very, very, very optimistic that the new government leaders at the city and state will be constructive, will be business-friendly and recognize that the Penn District is something that requires and demands their attention,” Mr. Roth said.
Mr. Cuomo, a three-term Democrat, resigned in August after a report by the New York State attorney general found that he sexually harassed nearly a dozen women, including current and former government workers.
The state’s plan for modernizing Penn Station centers on removing most of its upper level to allow sunlight to shine through wherever possible in a dark and gloomy structure that squats beneath Madison Square Garden.
While Mr. Cuomo first proposed a large-scale renovation of Penn Station and a broader neighborhood development in early 2020, he threw his political weight behind the plan last spring during the lowest period of his tenure and just months before he resigned.
At that time, Mr. Cuomo’s aides argued that the many components of the project — an upgraded Penn Station, additional commuter rail tracks and new buildings — were only viable as a single development.
However, Ms. Hochul will argue on Wednesday that the redevelopment of Penn Station can and should move forward on its own, without an expansion of the station to the south to make room underground for nine new rail tracks and five platforms. That expansion would require the demolition of numerous buildings, including a 150-year-old Roman Catholic church, and bring the number of tracks there to 30, up from the current 21.
“We certainly understand that a project of this sort is always flexible,” said Joseph Zwilling, a spokesman for the Archdiocese of New York, “and we look forward to an open dialogue with the state as their plans evolve.”
New York officials said that they estimated that the overhaul of Penn Station would cost as much as $7 billion and that they expected the federal government to cover half of that cost and New Jersey to cover 25 percent of it. That is the same cost-sharing formula that the three governments settled on for the construction of a new rail tunnel between New Jersey and Manhattan.
The portion paid by New York State would be derived from the development of the new towers, whose owners would contribute part of the revenue from office leases, retail sales and other sources, the officials said.
The tunnel project, known as Gateway, would double the capacity for trains under the Hudson River. This spring, the Biden administration approved the Gateway project for federal funding after years of delaying by the Trump administration.
Gateway’s second phase includes the plan to add more tracks to Penn Station, an expansion that was part of Mr. Cuomo’s vision for what he called “the Empire Station Complex.”
Ms. Hochul made it clear to state transportation officials that she did not want to wait for work on the tunnels or the station expansion to begin before making improvements to Penn Station, which has long been derided as a grim portal to the nation’s biggest city.
“We appreciate that the governor has made this a priority, and we look forward to working with her team on it” Anthony Coscia, the chairman of Amtrak, which owns the station said.
Ms. Hochul sees an overhaul of Penn Station as an improvement that benefits New Yorkers more than some recent transportation projects like the Moynihan train hall, which serves Amtrak customers at Penn Station, or the Lower Manhattan transportation hub known as the Oculus, said officials who have discussed the plan with her.
Thomas K. Wright, the chief executive of the Regional Plan Association, said he welcomed Ms. Hochul’s approach and said he doubted that it would jeopardize the plan to add tracks to the station or the Gateway tunnel project.
“What New York and the region needs is a renovated Penn Station, an expanded Penn Station and the tunnels to be built,” Mr. Wright said. “All three of these elements are absolutely necessary and they need to be planned and designed in a coordinated fashion.”