FILE - Penn Station artists rendering 2

Renovation and redevelopment of Penn Station could cost upward of $10 billion. A plan is for that cost to be shared through federal money, and by the states of New York and New Jersey.

(The Center Square) – A key New York board gave its initial authorization Wednesday to a plan for funding the Penn Station redevelopment proposed by Gov. Kathy Hochul earlier this week.

Lawmakers who serve on the panel, however, said they will be keeping a watchful eye over the project and may not vote yes again automatically.

The New York State Public Authorities Control Board approved a resolution that would allow the state to seek agreements with developers to make payments-in-lieu-of-taxes, also called PILOT payments, instead of paying taxes on projects built as part of the massive redevelopment plan in midtown Manhattan.

Empire State Development, New York's economic development authority, told the PACB its approval was needed in order to present the federal government with a financial plan; it is asking Washington to cover half of the project's costs.

New York and New Jersey are expected to split the rest of the funding. New Jersey is involved because Penn Station is a massive commuter hub in New York City that connects it to the suburbs across the Hudson River.

As the state secures agreements with developers for Penn Station projects, those will be subject to numerous approvals that will give the public a chance to be heard, according to ESD.

The board's approval came even though state Comptroller Thomas DiNapoli raised concerns.

"The Penn Station project has laudable goals, but given the complexity and financial risks of the project, the Public Authorities Control Board should take additional time to determine that sufficient information and funding commitments are in place," DiNapoli said.

State Sen. Leroy Comrie, D-Queens and on the authorities board, voted yes but said the PILOT plan was just a "first step" toward a lengthy redevelopment that needs funding commitments from other parties.

"Our conference will not vote for any future PILOT agreements for individual above-ground buildings ... until we have secured necessary federal approvals and the fair share funding from the federal government and New Jersey," Comrie said.

The cost to redevelop Penn Station and renovate the commuter hub is expected to near $10 billion. The project is expected to add housing units and other private developments in the area. It's also tied into the Gateway Project, a larger rail project between New York and New Jersey that's expected to improve passenger rail service across the northeastern United States.

Funding from the PILOT payments would be used to cover infrastructure costs, such as redesigned streets, new public plazas and bike lanes.