Watchdog Summary of Penn Station Governance Agreement

September 28, 2023

Reinvent Albany Summary of Key Provisions

Penn Station Reconstruction February 3, 2023 Design Governance Agreement

September 2023

The Penn Station Reconstruction Project is both technically and politically complicated. Penn Station is a mega-hub for local, regional, and national rail that happens to be located under Madison Square Garden and is critically important to New York State, New York City, New Jersey Transit, and the federal government. Penn Station is owned by Amtrak yet serves far more riders using Metropolitan Transportation Authority (MTA) and NJ Transit – especially since the bulk of Amtrak passengers shifted to Moynihan Station.

In response to a Freedom of Information Act (FOIA) request, Amtrak provided Reinvent Albany with the February 3, 2023 Design Governance Agreement (DGA) for Penn Station Reconstruction between Amtrak, MTA, and NJ Transit. We believe these agencies should have published the DGA long ago on their websites as a matter of basic transparency. Unfortunately, they did not, so we are providing it here. Below are excerpts of key provisions, as organized by Reinvent Albany, with emphasis added in bold and summaries of the provisions as noted.

Conditions/Limitations

This Agreement shall be governed by and construed under the laws of the State of New York. Each Party agrees that all legal proceedings in connection with any dispute arising under or relating to this Agreement shall be brought in the United States District Court for the Southern District of New York.
The Parties are each independent entities, and nothing in this Agreement shall be interpreted to constitute a partnership, joint venture or any other legal relationship which might be deemed to authorize either party to contract for, or legally bind, the others in connection with this Agreement or in any other respect.
It is expressly understood that each Party is solely and exclusively responsible for the management and operation of its own transportation system and real estate assets and nothing in this Agreement is intended to, or does, provide otherwise.
The Parties specifically agree that the language used in this Agreement shall not be a precedent for the commitments and responsibilities of the Parties in any subsequent agreement related to this Project.

Goals

Parties agree that an architectural and engineering design is needed “to avoid duplication of effort, conflicts, inconsistencies and inefficiencies associated with a segmented and uncoordinated redevelopment of the Penn Station property”
In alignment with the goal of the Penn Station Master Plan, the Parties agree that Base Scope will assume a unified station concept.
The Parties will work towards the creation of a unified ticketing system for Amtrak, NJ TRANSIT, LIRR and MNR, including necessary facility design and equipment changes as part of the Base Scope.

Procurement Process

Will use a “progressive delivery method” of:
- Construction Manager at Risk (“CMAR”)
- Design-Build (“DB”)
- Progressive Design-Build (“PDB”), or
- Public Private Partnership (‘”P3″) to be selected by the Parties at a later date
Parties acknowledge and agree that the Project’s procurement and delivery strategy must be agreed to by all Parties prior to any of the Options being exercised;
Construction phase: The Parties will, subject to their unanimous agreement, enter into a final design and construction phase agreement setting forth their roles and responsibilities during the Option phase of the Project. No Party nor their contractors shall perform any construction activities related to the Project affecting Amtrak’s, NJ TRANSIT, or MTA’s operations or its property until:

(a) a final design and construction phase agreement has been fully executed,
(b) the Parties have each approved the final design Documents,
(c) each of the Parties forces are available to support the particular construction activities that are to be commenced relating to the Project.
(d) a Temporary Permit to Enter Upon Property has been executed,
(e) all required insurance certificates have been provided,
(f) all real estate agreements (including, but not limited to, any licenses, permanent or temporary casements) required by the Parties have been fully executed, and
(g) the Parties have given their written authorization to proceed with construction.

Governance (bulleted summary by Reinvent Albany)

A Selection Committee is formed to review technical proposals including:
- A senior management-level representative from:
  - Amtrak
  - MTA
  - NJ Transit
- Non-voting technical advisors are included from:
  - City of New York
  - Empire State Development
- MTA will not award the Contract to the Consultant unless the Consultant and its cost proposal is approved by the Parties.
A Steering Committee is formed to provide oversight of the project:
- Senior executive-level employees from each of the Parties (Amtrak, MTA, NJ Transit) vested with decision-making authority, each with an equal vote.
- Decisions of the Steering Committee must be unanimous
- Meets every month
- “shall monitor the Costs to mitigate unanticipated overruns.”
A “principals” committee with an executive from each of the parties resolves any disagreements between the parties
“The Parties agree that joint operations working group discussions will cover the extent of unified management of Penn Station, potential integration with the management of Moynihan Trail Hall and Penn Expansion, potential use of a private party to take over a set of management tasks to be determined by the Parties, including curation of retail, cleaning, building routine, preventive and emergency maintenance, control and coordination of deliveries, and any other tasks the Consultant may recommend or the Parties may direct.”

Funding

MTA has retained an Architecture and Engineering Consultant (the “Consultant”) on behalf of the parties “with costs of base scope to be shared equally”
The Parties will jointly seek federal funding for up to eighty percent (80%) of Project costs and agree to equally split any related match requirements.

Amtrak Cooperation/Force Account Issues

Amtrak shall use best efforts to provide appropriate levels of support and resources for the Project consistent with the terms and project schedules developed by the Parties including the staff as incorporated into the New York area resource planning effort (“Regional Outage Plan”)…including services required for protection of railroad traffic, such as flagging, controlled power outages and/or track outages, as well as appropriate subject matter experts to weigh in on design issues. as may be necessary.
MTA and NJ TRANSIT acknowledge that Amtrak has workforce and other resource constraints and other work commitments and demands, that only limited track outages are available, and that these outages must be shared and/or rationed among all potential projects (including other Amtrak, state, municipality, commuter, and third-party projects) occurring in the states of New York, New Jersey, or Connecticut. These restrictions may prevent Amtrak from performing Services according to the Project’s schedule and may prevent the Consultant, subconsultants, and/or, when on board, the PMC from gaining access to Amtrak’s property according to such schedule.