By Lysandra Ohrstrom

April 9, 2008 | 11:45 a.m.

WNBC.com got hold of a March 25 letter from Police Commissioner Ray Kelly to Madison Square Garden Chairman James Dolan, Vornado Realty chief executive Steve Roth, and the heads of the M.T.A. and Amtrak, faulting the parties for holding up the installation of a security perimeter around Penn Station to protect what he called “the single most critical transit hub in the United States” from terrorist attacks.

Though the MTA secured $15 million in federal funding to erect barricades from West 31^st to 34^th streets and Seventh to Eighth avenues three years ago, the four parties have yet to reach an agreement on which properties the security perimeter will be placed and who will front the cost of manned checkpoints, Jonathan Dienst reported yesterday.

“The only near-term option for improving the protection of this complex is a sound security perimeter,” Mr. Kelly wrote. “Fortunately, the M.T.A. has already secured the funds needed to install the perimeter, but I have been informed that your representatives have yet to finalize an agreement on how the installation will occur and the perimeter will operate. My staff has had multiple meetings with your representatives but there is still no resolution to the handful of issues holding up the agreement.

“This impasse has gone on for too long. I urge you, as the owners and the principal operators, to strike a reasonable compromise that will finally permit the security perimeter to be installed.”

A M.T.A. spokesman singled out Madison Square Garden for holding up the project.

“[MSG] has refused to accommodate the security plan and we cannot proceed with this important project without their permission and cooperation," spokesman Jeremy Soffin told WNBC.

A spokesman for James Dolan, the Garden's chairman, said the arena is working with the NYPD, Amtrak and Vornado Realty to come up with a solution, though Amtrak and Vornado refused to comment.

Mr. Kelly said he would not comment on what was meant to be a private letter, but told WNBC "there simply is no evidence that the terror threat is in any way diminishing."