Finally, Checkout Time for Hotel Penn?

Steve Roth’s Vornado Realty Trust has filed an application with the city to rezone the site of the 90-year-old Hotel

Steve Roth’s Vornado Realty Trust has filed an application with the city to rezone the site of the 90-year-old Hotel Pennsylvania, clearing hurdles for the real estate firm to demolish the hotel and build an office tower of up to 2.85 million square feet in its place.

In paperwork filed with the Department of City Planning, Vornado indicates it wants to rezone the site on 33rd Street and Seventh Avenue to allow for the development of a skyscraper of up to 1,198 feet, one that could hold one major tenant with a large set of trading floors, or a multi-tenant building with a large base of retail.

Mr. Roth, Vornado’s chairman, has long billed the 1.4 million-square-foot hotel site as a prime development parcel, part of what he imagines as a completely remade office district surrounding Penn Station (Vornado owns about 7 million square feet of commercial space in the area and has the potential to develop millions more if the redevelopment of the station, known as Moynihan Station, ever happens). He previously called the hotel “a placeholder, sort of like a parking lot, but in this case with $22 million of earnings.”

In order to be permitted to build the 2.85 million square feet, Vornado would reopen the so-called Gimbels Passageway, a subterranean pedestrian tunnel that runs from Penn Station at Seventh Avenue to the subways at Sixth Avenue and Broadway. That move would give Vornado extra density through a transit bonus written into the zoning, though Vornado would also request additional density beyond what is allowed, according to the documents filed with the city.

Vornado has told officials and community members that they have not made any final decision to raze the hotel, and the firm is undergoing this process in order to keep its options open (executives previously said they were considering renovating the hotel). Still, the move represents a significant commitment of resources, time and consultants (to name a few on Vornado’s payroll for the project, according to city records: Patricia Lynch & Associates, Connelly McLaughlin, Stantec; Kramer Levin), and it will likely provoke at least some community resistance.

Some preservationists—though not the main preservation advocacy groups [Update: we should note that the Historic Districts Council was supportive of landmarking]—have been pushing for the designation of the McKim, Mead & White–designed Hotel Penn as a city landmark, a move that would likely bar its destruction. However, the city’s Landmarks Preservation Commission in early 2008 issued a letter saying it would not take action on the building as it did not find it to meet the qualifications.

Ultimately the rezoning will need approval from the City Planning Commission and the City Council. On land-use decisions like this, the Council is influenced heavily by the local council member, currently Speaker Christine Quinn.

The filing with City Planning (a draft scoping document that precedes a seven-month approval process) comes a bit more than a year after the site very nearly became the intended home of Merrill Lynch. Mr. Roth has said he had a handshake agreement with then Merrill CEO Stan O’Neal to build the firm’s new headquarters on the site, though the bank’s board never took up the action in a late 2007 meeting, and Mr. O’Neal was forced out shortly thereafter.

On a slightly unrelated note, the paperwork sounds a hopeful note on Moynihan Station (where Vornado is one of two designated developers), saying “it is conservatively estimated” that by 2014, the following will be complete:

  • "Redevelopment of the Farley Complex with approximately 235,000 gsf of office use, 125,000 gsf of hotel use, and approximately 553,000 gsf of destination retail space;
  • Development of the Penn East site [between 33rd and 34th streets along Seventh Avenue] with approximately 1.9 million gsf of office use and approximately 71,000 gsf of destination retail space; and
  • Development of the Penn West site [between 33rd and 34th streets along Eighth Avenue] with approximately 574,000 gsf of hotel use, approximately 37,000 gsf of retail space, and approximately 490 residential units."

Finally, Checkout Time for Hotel Penn?