Amtrak Selects Halmar and Skanska Team for Penn Station Predevelopment

Amtrak’s extraordinarily fast predevelopment schedule for the Penn Station is keeping right on track. In May, Amtrak and Transportation Secretary Sean Duffy announced the selection of Penn Transformation Partners as the Master Developer Team for the long-awaited redevelopment megaproject.

Penn Transformation Partners (PTP) includes Halmar and Skanska. The selection of PTP has implications beyond the procurement as well – it also finalizes some of the key outstanding design questions for the redeveloped Penn Station. In particular, it means that Madison Square Garden will remain in place atop the station, rather than having to relocate nearby. PTP’s proposed design also includes a new grand entrance to Penn Station on Eighth Avenue, and increased track capacity that could enable through-running for some regional rail lines.

The announcement of a preferred predevelopment partner came just months after Amtrak shortlisted three bid teams for the contract in January, and just over a year after the Trump Administration took over the project from New York’s Metropolitan Transportation Authority (MTA).

“We took over the transformation of New York Penn Station because the project was behind schedule, over budget, and hopelessly mismanaged. One year later, we continue to hit major milestones at record speed,” said Secretary Duffy. “In selecting Penn Transformation Partners and their innovative plan, we are one step closer to delivering a world-class travel hub that daily commuters and travelers have dreamed of for decades.”

The Department of Transportation also announced that it would provide $200 million to the project to cover predevelopment work in order to get to the start of construction by the end of 2027. And even more federal funding could be on the way. At a Senate hearing in May, Secretary Duffy said “we’re going to give $8 billion to rebuild Penn Station…” in response to a question from Senator Kirsten Gillibrand, though he did not go into detail regarding whether that would be federal financial support or direct grant funding or some combination thereof.

Amtrak and the PTP team will now enter negotiations to finalize a predevelopment agreement to bring the project from its current state through to construction. That will mean not only progressing the station’s designs and construction phasing plans, but also federal permitting and the development of a business model to fund the project.

That business model is the big remaining question for the project and its local political support. It is possible that $8 billion in federal grant funding is forthcoming, but more likely that the final proposed financing will include local revenues, including from the many transit agencies that use the station. After Amtrak’s announcement, New York Governor Kathy Hochul released a statement supportive of the project but also clarifying that she “…will accept nothing less” than “…ensuring the costs are not borne by New York commuters or taxpayers…”

The MTA will be another key stakeholder for the redevelopment project, and its leadership was a vocal opponent of a prior P3 proposal to redevelop the station. The MTA was slowly working on its own plans to redevelop the station before the Trump Administration took over the project last year. After the selection of PTP, Janno Lieber, CEO of the MTA, reportedly said that the agency had not discussed the project with the federal government. He also stated that under the MTA’s lease for the Long Island Rail Road (LIRR) portion of the station, the project will need the railroad’s agreement to redevelop those areas.

In addition to Halmar and Skanska, the PTP team for the project proposal included Vornado Realty, Halmar parent ASTM, HNTB, HOK and PAU, Severud Associates Consulting Engineers, M-E/Vogel Taylor Engineers, Network Rail Consulting, Langan Engineering, City ID, Billings Jackson Studio and Morgan Stanley.

Amtrak was advised in the predevelopment procurement by KPMG as Financial Advisor and Hunton Andrews Kurth LLP as Legal Advisor. AECOM/LIRO JB was the project manager consultant. AKRF was hired as the project’s environmental consultant.

Amtrak shortlisted two additional bid teams to compete for the redevelopment contract: Grand Penn Partners, led by Macquarie, and Penn Forward Now, led by Fengate. Whether or not Madison Square Garden would have to relocate was one of the key outstanding design questions for the project, and at least one of the predevelopment teams was associated with a design that would have relocated the stadium across the street to redevelop Penn Station.

Amtrak evaluated the predevelopment proposals using a 1,000-point scale, with 700 points for a technical evaluation and 300 points for a financial evaluation. Technical evaluation criteria included the proposal’s approach to both project and predevelopment implementation, as well as the team’s design concept. Financial evaluation criteria included the team’s proposed equity IRR, its predevelopment cost cap, and various other project fees and markups.

This is not Halmar/ASTM’s first proposal to redevelop Penn Station. In 2023, the firm published an unsolicited proposal for the project, which gained some momentum before stalling out. Under that proposal, Madison Square Garden would have also remained in place, and the project scope included demolishing the Hulu Theater to make way for a new station entrance on Eighth Avenue. The proposal included some detailed design work and carried a $6 billion price tag at the time, including a $1 billion private investment.

That proposal was vocally opposed by MTA leadership, and the agency was seeking federal grant funding to advance its own version of the redevelopment project at the time. The state never formally responded to that proposal.

The predevelopment procurement was led by Amtrak’s Andy Byford, who previously led the agency’s high-speed rail development efforts. Byford was also previously the head of the New York City Transit Authority.

“The rapid completion of a rigorous procurement process represents more than just delivering on a highly ambitious milestone,” said Byford. “It demonstrates that Amtrak and USDOT are uniquely capable of making this vision a reality.”

Needless to say, the Penn Station Redevelopment will be a challenging project. In fact, it is difficult to ascertain whether development or predevelopment will be the toughest part. During the development phase, PTP will be required to completely remodel the busiest train station in the United States while it remains fully operational and while the Garden remains on top.

In the predevelopment phase, Amtrak and PTP will need to navigate permitting through a hornet’s nest of stakeholders, including the MTA, which has long opposed the now-selected development plan. There is a reason New York has wanted to redevelop Penn Station for more than a generation, and nothing has happened.