"This history making project will return Pennsylvania Station toits rightful place as a preeminent gateway to New York City, whilealso opening up exciting new economic development opportunities forMidtown's Westside," Pataki said. "This plan is a win-win foreveryone--allowing us to proceed with construction of one of theworld's finest transportation hubs, addressing the Postal Service'sconsolidation and fiscal planning needs, and providing anadditional 700,000 sf of the building for new private sectordevelopment and investment."

The $230-million purchase is being funded with $145 million fromthe Port Authority. The remaining $85 million will come from EmpireState Development bonding that will be supported by revenuesreceived from the developer of the commercial and retail portion ofthe redevelopment. New York City is providing $25 million towardthe Penn Station redevelopment project through its EconomicDevelopment Corporation.

The Ninth Avenue portion of the building will be marketed formixed-use private sector development. The five-year project willalso open up an additional 805,000 sf of air rights that will betransferred to the State and be strategically used as an economicstimulus for the West Side of Midtown Manhattan.