The Empire State Development Corporation, which is in charge of the Penn Station and Midtown redevelopment project, sent a letter last week to state lawmakers in an effort to allay concerns over funding for the multi-billion dollar project. dollars.

The letter came after several state lawmakers called for the Penn Station project, which includes a new 450-foot concourse for the station and 10 new mixed-use skyscrapers, to be halted until several funding questions have been answered. In the letter, President and CEO-designate Hope Knight said the high price of the upgrades would be partially offset by revenue from the projects and that New York City would not lose money to its completion.

Knight said the projected cost of the “Penn Rebuild,” which includes actual improvements to the station, such as new entrances and a skylight, would be $7 billion. Penn Station’s expansion, which involves adding more tracks, would cost $12 billion, she said. Revenue from the projects would help fund those costs and other improvements in Midtown, like eight acres of open space, she said.

“The city would be fully reimbursed for existing property taxes, adjusted annually, in the project area,” Knight wrote in the letter.

Budget watchdog Nicole Gelinas of the Manhattan Institute read the letter and said it did not confirm whether developers should pay full current and future property taxes.

“It’s not too paranoid to assume that the state is considering some sort of temporary difference payment to the city, especially since it also says PILOTS [Payments In Lieu of Taxes] payable would be comparable to other properties in Midtown West. Does this mean Hudson Yards? said Gelinas.

Hudson Yards has received about $5.6 billion in grants from the PILOT program, which allows developers to avoid paying municipal taxes by paying a fee to the state.

Gelinas added: “It’s a very complicated way to do something quite simple, build office buildings and maintain public transit. No need to remove much of downtown shopping from the tax rolls. Create yet another special district, like the [World Trade Center] or Hudson Yards, when such special neighborhoods do not have a great track record, either fiscally or aesthetically, is unwise.

At least one of the lawmakers who received the letter said he still had questions.

State Senator Brad Hoylman said he was awaiting a final assessment from the Independent Budget Office before giving full approval. He said it’s still unclear how much revenue the city could lose under the plan.

“I think there’s more information we’ll want to see before we think the project should proceed,” Hoylman said.

The senator said he would also like to see the plan include more affordable housing. Currently, there are expected to be 1,800 housing units, including 540 “affordable units,” a term that has yet to be officially defined.

“We want to see deeply affordable and supportive housing at a much higher number,” Hoylman said.

Lynn Ellsworth, one of the project’s fiercest critics who leads a group of civic groups called Human-scale NYC, said she objects to the size of the project as well as the loss of historic buildings in the building area. She said the letter did little to allay her concerns.

“Looks like ESD is just digging in heels and parrying senators with no new information,” she wrote in an email.