Over the past several years, the State of New York and the Metropolitan Transportation Authority (the “MTA”) have been touting the redevelopment of Penn Station. This was music to every New York Penn commuter’s ears, especially those who lived through “summer(s) of hell,” where trains in and out of Penn Station were constantly cancelled, delayed, or simply broken down. Although everyone was excited about the future of Penn Station and the redevelopment of the surrounding area, no one could seem to agree as to the best way to do it.

Various publications and transit groups have stated that the expansion of Penn Station, in a way that makes sense, would be impossible without the demolition of Manhattan Block 780. Community groups have rallied against the razing of this city block and the possibility of its acquisition by eminent domain.

Before the Covid pandemic upended office attendance in New York City, former Governor Andrew Cuomo announced his plan to reconstruct Penn Station. The plan was tied to developer Vornado's plan to build eight office towers around the station, and revenue from the towers was expected to assist with funding the transit improvements. The Cuomo plan envisioned the acquisition of the city blocks adjoining Penn via eminent domain, especially Block 780, which Amtrak had previously said must be razed in order to build a new underground terminal for New Jersey Transit.

Then Covid hit, office attendance was non-existent, New York got a new governor, Vornado put a pause on the office towers due to dismal office occupancy, and the Penn Station redevelopment came to a screeching halt.

In June of 2023, Governor Kathy Hochul publicly stated that she was going to “decouple” the Vornado office tower project from the Penn Station redevelopment project because the Covid pandemic had fundamentally changed the demand for office space. In March 2024, Hochul announced that she intended to save Block 780 and would not invoke eminent domain.

Fast forward to April 2025: The Trump administration wrested control of the Penn Station redevelopment from the State of New York. Transportation Secretary Sean Duffy announced a full-blown federal takeover, revoked the MTA’s lead-agency status for the project, revoked the MTA's $72 million federal planning grant for the project, and installed Amtrak (the entity that owns Penn Station) as the sole sponsor for both the Penn renovation and any future expansion.

Will Block 780 now be acquired by eminent domain in order to accommodate the additional train track capacity required? Possibly.

Amtrak has the power of eminent domain under 49 U.S. Code § 24311(a)(1) and (2), if it cannot acquire the property it needs by contract or negotiated sale. The MTA, the largest leaseholder at Penn Station, also has the power of eminent domain under the New York State Eminent Domain Procedure Law (“EDPL”). Regardless of whether an eminent domain action is filed by a federal agency or a state agency, the end result is the same: The necessary properties will likely be acquired, and the remaining battle will be what monetary value constitutes just compensation.

Although New York allows limited challenges to an eminent domain action under EDPL §207, most of those challenges fail since they are usually based on the premise that no public use, benefit, or purpose will be served by the proposed acquisition. See EDPL §207(c). With respect to the public use argument, the law of the land, as held by the U.S. Supreme Court in Kelo v. City of New London, 545 U.S. 469 (2005), remains the same: Courts must defer to the government's determination that an eminent domain seizure of property satisfies the "public use" requirement of the Fifth Amendment takings clause. See Kelo v. City of New London, 545 U.S. 469 (2005); U.S. Const. Amend. V; Berman, 348 U. S. 26; Midkiff, 467 U.S. 229; Ruckelshaus v. Monsanto Co., 467 U. S. 986. Pp. 6–13.

Because any challenge to the authority vested in Amtrak, the U.S. DOT, the MTA, or any other federal or state agency with the right to acquire property by eminent domain would probably fail, we are left with the law regarding just compensation for both property owners and business tenants.

Under the takings clause in the Fifth Amendment to the United States Constitution and Article I, Section 7, of the New York State Constitution, "private property shall not be taken for public use, without just compensation." See U.S. Constitution amend. V; N.Y. Const. art. I, §7. When the government takes property by eminent domain, the Constitution requires that it compensate the owner “so that he may be put in the same relative position, insofar as this is possible, as if the taking had not occurred.” City of Buffalo v. Clement Co., 28 N.Y.2d 241 [1971].

Business tenants are entitled to separate compensation for the loss of their compensable trade fixtures in a separate condemnation award (from that of the property owner), i.e., compensation for “chattel” such as machinery, equipment, and/or other legally compensable installations that are used for its business purposes. Courts have held that “[a]n appropriation of land … is an appropriation of all that is annexed to the land, whether classified as buildings or as fixtures …” See EDPL §504 (c); Rose v. State of New York, 24 N.Y.2d 80 (1969).

In the event that the federal or state agencies involved in the Penn Station redevelopment decide to proceed via eminent domain, all is not lost for property owners and business tenants. Although eminent domain is a complex and often frightening process, condemnees do have many legal rights under both federal and state statutes, which were enacted to make them whole.

Only time will tell if eminent domain will be used to expand and reconstruct Penn Station. But with the recent federal takeover of this project, it seems that eminent domain is, in fact, back on the table.