Penn Central Transportation - Corporate History

Corporate History

The Pennsylvania New York Central Transportation Company was formed February 1, 1968, as an absorption of the NYC by the PRR. The trade name of "Penn Central" was adopted, and on May 8, the company was officially renamed to the Penn Central Company.

The Penn Central Transportation Company (PCTC) was incorporated April 1, 1969, and its stock was assigned to the new Penn Central Holding Company. On October 1, the PCTC merged into the Penn Central Company. The next day, the Penn Central Company was renamed to the Penn Central Transportation Company, and the Penn Central Holding Company became the Penn Central Company.

The old Pennsylvania Company, a holding company chartered in 1870, reincorporated in 1958, and long a subsidiary of the PRR, remained a separate corporate entity throughout the period following the merger. While the PCTC had been merged into Conrail in 1976, the holding company, the Penn Central Company, continued as a separate firm. In the 1970s and 1980s, the new PC was a small conglomerate that largely consisted of the diversified sub-firms acquired by the old PC before the crash.

Among the properties the Penn Central Holding Company owned when Conrail was created were Madison Square Garden (which stands above Penn Station), and its prime tenants, the New York Knickerbockers basketball team and New York Rangers hockey team.

Though the new PC retained ownership of some rights of way and station properties connected with the railroads, it continued to liquidate these and eventually concentrated on one of its subsidiaries in the insurance business. The former Penn Central Corporation changed its name to American Premier Underwriters in March 1994. It became part of the Cincinnati financial empire of Carl Lindner and his American Financial Group. Up until late 2006, American Financial Group, still owned Grand Central Terminal, though all railroad operations were managed by the New York Metropolitan Transportation Authority (MTA) through a lease entered into in 1994. The current lease with the MTA was negotiated to last through February 28, 2274.

On December 6, 2006, the U.S. Surface Transportation Board approved the sale of several of American Financial Group's remaining railroad assets to Midtown TDR Ventures LLC for approximately US$ 80 million. The New York Post on July 6, 2007 reported that Midtown TDR was controlled by Penson and Venture. The Post noted that the MTA, would pay $2.24 million in rent in 2007, and has an option to buy the station and tracks in 2017. However, Argent could also opt to extend the date another 15 years to 2032.

The assets included the 156 miles (251 km) of rail used by the Metro-North Railroad Harlem-Hudson Line, and Grand Central Terminal in New York City. The most valuable asset cited by Midtown TDR were the unused "air rights" for additional development above Grand Central's underground boarding platforms and switch yard. The platforms and yards extend for several blocks north of the terminal building under numerous streets and existing buildings leasing air rights, including the famous MetLife Building and Waldorf-Astoria Hotel. The cash value of the Terminal building itself though is limited, as the building is listed for purposes of historic preservation and cannot, under current law, be torn down for redevelopment.