Governor Kathy Hochul has announced that the state will proceed to rebuild Penn Station without the controversial component of constructing high-rise office towers around it. The state will now separate the Penn Station renovation from the redevelopment of the surrounding neighborhood.

The Governor did not disclose the new funding plan for the $7 billion renovation, which was initially intended to be financed by tax revenues from the new towers, many of which were to be built by Vornado. However, she mentioned that the state has applied for federal aid and will utilize the $1.3 billion previously allocated for the project.

The state will also expand its search for architects, indicating openness to additional design ideas. The announcement comes ahead of Italian developer ASTM’s alternative plan for renovating Penn Station. The original plan faced criticism for eminent domain usage and allegations of favoritism.