Preservation Tax Credits Crucial to Moynihan Bid

Plans to expand Pennsylvania Station and move Madison Square Garden could hit a financial obstacle relating to a tax credit for historic preservation.

New York's State Historic Preservation Office has raised concerns about preliminary designs for the project with its developers, who are said to be seeking up to $250 million in federal historic preservation funds. The state will issue a recommendation to the National Park Service, which could block the money if it fails to meet certain preservation criteria.

The project involves the Farley Post Office, the postal facility that is the planned home of a new train station to be known as Moynihan Station, which would connect to Pennsylvania Station, and a relocated Madison Square Garden.

"There's concerns that the historic characteristics of the building need to be maintained," a spokeswoman with the State Historic Preservation Office, Catherine Jimenez, said.

While Ms. Jimenez did not provide details about the concerns, she said the state is working with the developers at this initial stage. "This is a very preliminary review," she said. "It's too early to say how those concerns may impact the tax credit."

While the concept behind the project seems to have broad support, preservationists have been raising issues with the post office plans for months, claiming that some of the proposed alterations by the developers are too invasive. "They're going to take down the original walls and put up glass," the president of the New York Landmarks Conservancy, Peg Breen, said of proposed changes to the interior. "Any changes to the post office lobby could be impediments to the tax credits, based on these standards."

A spokesman for New York's Empire State Development Corporation, Errol Cockfield, said the state is committed to preserving historic character in the project, calling the tax credit "crucial funding."

The discussions about the tax credit between the state and the developers, Related Companies and Vornado Realty Trust, underscore the integral role of federal funding in the project. Both the developers and the Spitzer administration have undertaken a strong lobbying effort in Washington, where the developers listed lobbying expenses of about $120,000 in the second half of 2006.

A spokeswoman for Governor Spitzer, Jennifer Givner, said state-employed lobbyists are working "to advocate for the necessary federal funding to move the project forward."

People familiar with the plans say the state and developers are pushing for at least $600 million in federal transportation funds for the station. Taken with a historic tax credit and any money that comes directly from Amtrak, much of the costs for the station, which the Spitzer administration has said could cost up to $2 billion, could come from Washington.

While the plans have yet to be publicly unveiled, the developers have been showing officials and community groups renderings of the proposed project, which would total $14 billion in investment.

The state has not finalized a plan for the development, though it hopes to release a scoping document for the project this summer. A spokesman for the developers declined to comment, as did a spokesman for Madison Square Garden, which is said to have not yet reached a final agreement to move to the Farley building.