New York firms offer 'Plan B' to staff ahead of summer transit woes

[May 24, 2017]  By Barbara Goldberg and Hilary Russ

NEW YORK (Reuters) - Faced with this summer's partial shutdown of a key New York transit hub due to track repairs, some employers in the largest U.S. city are scrambling to come up with "Plan B" offerings to allow their suburb-dwelling staff to avoid the largely shuttered hub.

Inquiries have spiked for temporary office spaces that do not require travel through Pennsylvania Station, the busiest train station in the U.S., where weeks-long outages in July and August are expected to trigger a travel nightmare for employees living in New Jersey and Long Island suburbs, according to businesses and real estate specialists.

In the nation's leading center of banking, finance, and communication, major employers are offering to let workers clock in from home or report to branch offices.

It is an effort to spare the station's 600,000 daily commuters from what New York Governor Andrew Cuomo predicted could be a "summer of agony," based on recent delays and cancellations triggered by a pair of derailments at the station infamous for its deteriorating tracks.

"People are trying to avoid the harrowing commute to get into that part of town," said Marcus Moufarrige, chief operating officer at Servcorp Ltd <SRV.AX>, a landlord for shared workspaces.

Calls in search of temporary office space in lower Manhattan in July and August have risen 4 percent compared to the previous year, Moufarrige said.

"Some have mentioned the situation at Penn Station," he said.

Investment bank Societe Generale <SOGN.PA> has offered its 1,500-person Manhattan workforce, about half of whom commute from New Jersey through Penn Station, the chance to work at home or in Jersey City, said human resources spokesman Sean O'Brien.

"It obviously increases productivity so people aren't stuck on trains for an hour or two," O'Brien said. "It also reduces the amount of meetings that have to be canceled because important stakeholders are stuck on trains."

Scott Rechler, chief executive of RXR Realty LLC said his $15 billion development firm is contemplating offering more flexible hours or allowing employees to work at offices outside Manhattan.

"We're going to all have to find ways to adjust, almost like we did post-Sandy," said Rechler, referring to 2012 Superstorm Sandy, which left millions of train riders without service, on some routes for weeks.

Penn Station serves three commuter train lines: Amtrak, New Jersey Transit and the Long Island Rail Road.

Workers walk on rail tracks inside New York City's Pennsylvania (Penn) Station, U.S. April 27, 2017. REUTERS/Mike Segar/File Photo

Amtrak owns the station's tracks and was responsible for two recent derailments that prompted it to speed up long-planned repairs.

The three railroads together are devising a scheme for which tracks to take offline for repairs, and where to reroute other trains. Summer outages are expected from July 7 through July 25 and Aug. 4 through Aug. 28.

(To see an animated graphic of rush hour trains at Penn Station, click on: https://vimeo.com/217206048)

New Jersey Governor Chris Christie said on Tuesday that N.J. Transit trains on the popular Morris & Essex Midtown Direct line would be diverted to Hoboken, where ferries and alternate train lines connect to Manhattan.

The overall changes may also have a longer term effect, observers said.

"If people believe it's going to be a chronic problem, then there's probably going to be more meaningful structural changes relative to where people want to live and property values," said Rechler.

"More of the working people have less flexibility," he said. "They'll feel more of the brunt than the professionals."

The potential ripple effect on suburban home values has raised concerns, said realtor Tracy Wolchock Freeman at Coldwell Banker in Maplewood, New Jersey. Media dubbed the area "Brooklyn West" after a years-long influx of New Yorkers attracted by Midtown Direct train service to Penn Station.

"Prolonged issues with the trains could lead people to look in other markets," Freeman said.

(Reporting by Hilary Russ and Barbara Goldberg; Editing by Chris Reese)

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