Madison Square Garden won't be going anywhere, federal officials revealed Wednesday when they selected the companies that will lead the $8B overhaul of New York Penn Station, a project that has long floundered despite various efforts by state and local officials.

A team led by construction firms Halmar International and Skanska was selected to reconstruct America's busiest rail station, and the U.S. Department of Transportation agreed to provide an additional $200M for the design and permitting process so the overhaul can break ground in 2027, according to DOT Secretary Sean Duffy and Amtrak.

The master developer, known as Penn Transformation Partners, is a 50-50 development partnership between Halmar, a subsidiary of Italian contractor ASTM, and Swedish contracting giant Skanska, according to a PTP spokesperson.

“As a lifelong Brooklynite, it is an honor to lead a world class team of builders and designers on the most complex and important infrastructure project of our time,” Penn Transformation Partners CEO Peter Cipriano said in a statement.

An Amtrak document released in January indicates that the dominant landlord around Penn Station, Vornado Realty Trust, and Morgan Stanley are among the companies with stakes in PTP. It isn't clear if Vornado is still involved in the project.

The redevelopment will add a grand entrance on Eighth Avenue to the new train hall, replace walkways, expand track capacity and improve the station’s subterranean structure. Under the plan, Madison Square Garden will remain at the site, with new cladding.

A final design will be revealed in the near future, a PTP spokesperson said.

“The rapid completion of a rigorous procurement process represents more than just delivering on a highly ambitious milestone; it demonstrates that Amtrak and USDOT are uniquely capable of making this vision a reality,” Andy Byford, the former head of the Metropolitan Transportation Authority who is serving as special adviser to the Amtrak board, said in a statement.

The new design will hearken back to the original Penn Station, which was completed in 1910 and demolished between 1963 and 1966 — an inflection point for the modern historic preservation movement.

The underground concourses were then renovated to create the current structure, which has been scrutinized for its design. Gov. Kathy Hochul has called it a “hellhole.”

The Trump administration’s announcement called the first iteration a “lost architectural gem.” Federal agencies took control of the project last year and previously announced a $43M grant to jump-start the work.

Penn Station is the busiest transportation hub in the Western Hemisphere, handling an estimated 600,000 passengers every weekday.

Efforts to rehabilitate Penn Station began in 2013, when the New York City Council approved a special permit to allow MSG, which sits above the station, to operate for 10 years. It was later renewed for an additional five years. The time frame was to be used to create and implement a plan for the future of the site.

Massive investments in the hub have already been completed, most notably the Moynihan Train Hall for Amtrak, which opened in 2020 and increased the complex’s concourse space by 50%. However, the existing train hall, used primarily for Long Island Rail Road and New Jersey Transit, has continued to operate in its notoriously cramped and dilapidated conditions.

In 2021, then-Gov. Andrew Cuomo proposed options to transform Penn Station that would have been financed by the development of 10 new office and residential towers in the surrounding neighborhood, built by Vornado.

Vornado later pulled back from new office development due to pandemic pressures. Under Hochul, the office tower portion of the plan was abandoned, leaving a massive gap in the budget.

“We took over the transformation of New York Penn Station because the project was behind schedule, over budget, and hopelessly mismanaged,” Duffy said in a statement. “In selecting Penn Transformation Partners and their innovative plan, we are one step closer to delivering a world-class travel hub that daily commuters and travelers have dreamed of for decades.”