Moynihan MOU 2010 02 17 (2)

PRELIMINARY MEMORANDUM OF UNDERSTANDING

This PRELIMINARY MEMORANDUM OF UNDERSTANDING (this “MOU”) ismade as of the 17th day of February, 2010, by and among the NEW YORK STATEURBAN DEVELOPMENT CORPORATION, doing business as Empire StateDevelopment Corporation (“ESDC”), a corporate governmental agency of the State ofNew York, constituting a political subdivision and a public benefit corporation andhaving an office at 633 Third Avenue, New York, New York 10017, MOYNIHANSTATION DEVELOPMENT CORPORATION, formerly known as Pennsylvania StationRedevelopment Corporation (“MSDC”), a New York Corporation and a subsidiary ofESDC having an office at 633 Third Avenue, New York, New York 10017 (MSDCtogether with ESDC, the “Project Sponsors”), and NATIONAL RAILROADPASSENGER CORPORATION, a corporation organized under the laws of the Districtof Columbia, with its principal office at 60 Massachusetts Avenue, NE, Washington, DC20002 (“Amtrak”) (ESDC, MSDC and Amtrak being collectively referred to herein as the“Parties”).

RECITALS

WHEREAS, ESDC is the principal economic development agency of the State ofNew York (the “State”) and is the owner of the land and improvements commonlyknown as the James A. Farley Post Office Building and the James A. Farley AnnexBuilding, both located between Eighth and Ninth Avenues and between West 31st and33rd Streets, New York, New York (collectively, the “Farley Building”); andWHEREAS, ESDC acquired ownership of the Farley Building from the UnitedStates Postal Service (“USPS”) in March 2007 to facilitate the redevelopment of theFarley Building to accommodate a combination of transportation, public, commercialand other facilities (such redevelopment being referred to as the “Project”), which isintended to include the creation of the new Daniel Patrick Moynihan Station, anintermodal transportation facility (“Moynihan Station”). Moynihan Station will bephysically connected to the existing Pennsylvania Station (“Penn Station”) and isintended to include the elements described as Phase 2 under this MOU. MoynihanStation will provide, among other things, new facilities for rail passengers, a publicstation hall, an extension of the Penn Station’s West End Concourse, new entrances tothe Farley Building from Eighth and Ninth Avenues, and enhanced subway and streetaccess; andWHEREAS, MSDC was established specifically to advance the Project and hasworked to develop plans in furtherance of the Project, and to secure public and privatepartners to assist in the financing of the Project; andWHEREAS, the Port Authority of New York and New Jersey (the “PortAuthority”), subject to the approval of its Board of Directors, expects to participate in thedesign and construction of, and to provide funding for a portion of the costs of,Moynihan Station. Any such Port Authority involvement with Moynihan Station will be

2on terms consistent with this MOU, and the Port Authority may become a party to theMOU in the future; andWHEREAS, Amtrak was established by federal statute to operate the nation’sintercity passenger rail network, including service to and from the City of New York (the“City”), and owns and uses Penn Station as a major transportation hub in Amtrak'sNortheast Corridor service; andWHEREAS, Amtrak has a fee ownership interest in, or a perpetual exclusiveeasement right to occupy and use for railroad and station purposes, the subsurface andtrain shed areas below the Farley Building, subject to certain rights of the State. Amtrakalso owns Penn Station, including without limitation, the subsurface, train shed areasand equipment, and Levels A, B and C (including the existing Amtrak retail space that iscurrently leased to third parties), subject to certain rights of the Long Island Rail Road(“LIRR”) and New Jersey Transit (“NJT”) to occupy certain space within Penn Stationand to conduct commuter rail operations therein; andWHEREAS, Penn Station: (a) hosts, in addition to Amtrak intercity passengertrains, commuter trains operated by the LIRR and NJT, two of the nation’s largestcommuter rail carriers; (b) is overcrowded and subject to severe congestion, particularlyduring morning and evening peak travel periods; (c) has limited amenities to attractpassengers and encourage travel by rail as opposed to other, less efficient and morepolluting modes of transportation; and (d) is operating at its maximum capacity, leavinglittle or no room for additional services, including enhanced high speed intercitypassenger rail service; andWHEREAS, ESDC previously approved a General Project Plan (“GPP”) for theadaptive reuse of the Farley Building and in furtherance of the Project, intends toprepare and seek approval of one or more revised GPP’s providing for the developmentof the Project in two or more phases as an intercity passenger rail station; andWHEREAS, the Project Sponsors contemplate that the construction anddevelopment of the Project will be undertaken either by (i) a private sector developer(the “Developer”), to be designated by the Project Sponsors, or (ii) the Port Authority, or(iii) the Project Sponsors themselves or (iv) a combination of the Developer, the ProjectSponsors and the Port Authority, all as determined by the Project Sponsors and, withrespect to Moynihan Station, by the Project Sponsors and Amtrak; andWHEREAS, subject to the principles set out in Section C(3) and resolution of theterms and conditions set out in Section C(4) below, Amtrak desires to move the majorityof its intercity passenger rail operations and services from Penn Station to MoynihanStation, and would occupy and use Moynihan Station for such related operations andservices.With that background and understanding, the Parties are entering into this MOU:

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A. Description of the Project, Definitions of Phase 1 and Phase 2 of the Project

The current draft preliminary plans for Phase 1 are attached as Exhibit A; thecurrent draft preliminary plans for Phase 2 are attached as Exhibit C; and thepreliminary cost estimate and sources of funding for Phase 1 are attachedhereto as Exhibit B. (Exhibit A and Exhibit C are hereinafter collectivelyreferred to as the “Plans”.) Exhibit C includes space in the Farley Building forthe United States Postal Service and private commercial development. ThePlans and the coloring of and designation of spaces on the Plans arepreliminary and conceptual, and are subject to approval of the Parties.1. The Project will be divided into two phases. “Phase 1” is located primarilybelow grade in the train shed owned by Amtrak. Portions of the below-gradePhase 1 work will be located in space controlled by the LIRR, NJT or the NewYork City Transit Authority (“NYCTA”). Phase 1 has independent utility and canbe used and operated, whether or not Phase 2 is completed. Construction ofPhase 1 is expected to start before Phase 2 and may be completed and put intooperation prior to Phase 2. Phase 1 consists of the following:

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Expand the existing West End Concourse (“WEC”) by doubling its length andwidth, thereby providing access to eight tracks that are not currently servedby the WEC, enhancing passenger circulation space, and providing space forthe sale of tickets (by vending machine) on the WEC;

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Provide new vertical access points to and from station platforms, reducing thetime required for passengers to clear the platforms, and six new verticalaccess points from the WEC to the street;

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Provide two above-grade entrances through the Farley Building at the cornersof 8th Avenue and West 31st and 33rd Streets;

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Expand the existing passageway below West 33rd Street (the “33rd StreetConnector”) between Penn Station and the WEC, increasing capacity,providing access to the subways, and facilitating compliance with theAmericans with Disabilities Act; and

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Improve Penn Station safety and security by adding new platform ventilationfan rooms beneath the Farley Building (the “Platform Ventilation”).2. “Phase 2” is located primarily in the Farley Building, which is owned by ESDC,but critical elements of Phase 2 are located in the train shed owned by Amtrak.Phase 2 consists of a public station hall and public circulation space, waiting