On August 2, 1967, New York City's recently established Landmarks Preservation Commission -- formed in response to the demolition of Pennsylvania Station -- designated Grand Central Terminal as a landmark, subject to the protection of law.  Apparently, this decision ensured the Terminal's safety.  But the most serious threat arose the following year.

Penn Central, the resultant conglomerate of a merger between the New York Central and Pennsylvania Railroads, leased Grand Central Terminal to developer UGP Properties, Inc. in 1968.  That same year, UGP proposed building a 55-story tower designed by Marcel Breuer above Grand Central.  The Terminal's facade would have been preserved, but rendered virtually invisible; the entire Main Waiting Room and part of the Main Concourse would have been demolished.  When the Landmarks Preservation Commission refused to approve the scheme, Breuer and UGP Properties presented a second proposal, which would have saved the Main Concourse but demolished the facade.  In August 1969, the Landmarks Preservation Commission again blocked the project.

Penn Central filed an $8 million lawsuit against the City of New York, essentially challenging the validity of the City's landmarks law.  Litigation lasted for nearly a decade.  City leaders, including Jacqueline Kennedy Onassis and Brendan Gill, rallied against changes to Grand Central Terminal.  In December 1976, the National Register of Historic Places named Grand Central Terminal as a National Historic Landmark.  More importantly, the Penn Central lawsuit went all the way to the United States Supreme Court, which on June 26, 1978, upheld New York's landmark law in a decision written by Justice William J. Brennan for a six-three majority.

Grand Central had been spared the wrecking ball, but was far from saved.  After decades of deferred maintenance, the building was crumbling.  The roof leaked; stonework was chipping away; structural steel was rusted.  Pollution and dirt had stained surfaces; commercial intrusions, like the Kodak sign and the Newsweek clock, blocked out natural light.