Midtown leaders call for housing, not tennis courts, on site of stalled PENN15 skyscraper

Community groups and one local elected official are slamming a developer’s plan to put tennis courts and a giant billboard on the site of a demolished hotel across from Penn Station amid New York City’s deep housing shortage.

The developer Vornado owns the property and tore down the old Hotel Pennsylvania last year with plans to one day erect a 56-story office skyscraper called PENN15 as part of a state-backed redevelopment plan for the area around the transit hub. But Vornado put the construction plan on hold indefinitely due to a lingering dip in the commercial real estate market. It's now considering putting tennis courts, an events venue and a 150-foot-tall billboard on the site until office towers become more profitable, Crain’s first reported.

Local residents and civic groups were already urging Vornado to build housing instead of a commercial skyscraper on the lot, which is bordered by Sixth and Seventh avenues and West 32nd and West 33rd streets. Assemblymember Tony Simone says the tennis court proposal is only fueling their advocacy.

"We're in a housing shortage, we need to increase supply,” Simone said. “We don't need tennis courts or silly playgrounds for the well-to-do on that site.”

Simone said Vornado could be "a hero" for building housing on the two-acre site and helping to address the city's ongoing shortage, but added that the firm would need state and city subsidies in order to do so.

“They have a grand opportunity to work with the governor and the local electeds,” he said. “We shouldn't waste time by putting tennis courts and billboards.”

Vornado did not respond to requests for comment, but previously told Crain’s the tennis court renderings were “for conceptual purposes” and were just one of a number of potential placeholder projects.

Vornado had planned to build up to 10 office skyscrapers spanning 18 million square feet around a redesigned Penn Station through a state-backed “General Project Plan” that could allow the firm to override local zoning rules. The economic development agency Empire State Development says the stalled project could bring the area nearly 1,800 new housing units, though that residential development is not guaranteed.

Empire State Development said Vornado would not need its approval to build anything allowed under current zoning rules. The city’s planning department said the lot could be used to build a residential tower, though Vornado wouldn’t be able to erect as large a building if it decided to build housing.

But real estate consultant Jordan Barowitz said the company is unlikely to consider constructing housing on the site since commercial space would be much more profitable. Vornado specializes in commercial development, and owns a number of properties throughout New York City.

“They’d have to eat the value of their land costs, which is hundreds of millions of dollars,” Barowitz said. “It has tremendous value as an office because it’s across the street from Penn Station.”

Still, community leaders say the current housing crisis means the city and state should get creative in order to develop more apartments and condos, including as part of a massive Midtown redesign.

New York City is facing its worst housing shortage in nearly 60 years. with just 1.4% of all apartments vacant and available to rent last year, according to the city’s most recent housing survey.

The Historic Districts Council lambasted Vornado’s plans in a statement last week, calling them “unconscionable.”

“Nobody is asking for new tennis courts; everyone is asking for new housing, and that is exactly what the Hotel Pennsylvania could have been,” the Historic Districts Council’s statement said.

And John Mudd, president of the Midtown South Community Council, said “you can’t talk about putting all this money in Midtown without talking about housing.”

“The whole area needs to think about housing,” he said. “We can’t exist like this.”