Penn Station is sweeping out its fast-food joints. KFC, Pizza Hut and eight other eateries operated by the Riese Organization on the lower, Long Island Rail Road level of the commuter hub will be toast in a couple of months. Landlord Vornado has decided it's time for a change along the busy West 33rd Street passageway, which connects Seventh and Eighth avenues. Riese has held the leases for 42 years.

"I'm certainly sorry to see my employees lose their jobs," said Chief Executive Dennis Riese. "But change is a fact of life." Some 130 workers will be laid off.

Sources say Vornado, the Manhattan-based real estate conglomerate with extensive holdings in the area, plans to spruce up that section of Penn Station, which it controls through its 1 Penn Plaza tower. The station's other landlords—the Metropolitan Transportation Authority, Amtrak and New Jersey Transit—are working on improvements for the beleaguered property as well. The plans will be detailed in a report, the "Penn Station Visioning Study," soon to be released by the railroads.

"Everyone's first instinct is to get out of Penn Station," said Jeff Gerlach, head of Amtrak's Northeast Corridor Capital Planning. "It's claustrophobic; there's no natural light."

Of course, these changes are simply stopgap measures as the stakeholders await the much grander Moynihan Station project, which will extend Penn Station to the Farley Post Office building and serve as Amtrak's main passenger waiting area.

Riese's fast-food exit will be the first, but others may follow as their leases expire. Vornado did not comment for this story, but another major tenant, Steven Kaplan, could be asked to change his offerings or give up some of his leases, which still have years on them, according to sources. He operates about 10 mostly grab-and-go food outlets, and a shoe-repair shop, along the north side of the same passageway—including Moe's Southwest Grill, Rose's Pizza and Pasta, and Planet Smoothie. He did not return calls for comment.

Mr. Kaplan was investigated by the FBI 14 years ago for controlling so much real estate in the station and for his alleged ties to organized crime, according to various news reports. At the time, he said that his "acquaintance" with the Gotti family had no bearing on his holdings at the station.

Vornado is also targeting real estate it owns surrounding the station. Chairman Steven Roth told investors a year ago at a Citigroup conference that his company is "in the process of turning over and buying out a lot of the retail tenants on the street so that we can populate them with better, more contemporary, more exciting tenants and restaurants," The Wall Street Journal reported.

For its part, the Riese Organization had been operating on the lower level without a long-term lease for many years. It also owns a T.G.I. Friday's there, which will be closing.

"In the past, Vornado has always extended my lease for three years at a time, though it was cancelable with 30 days' notice," Mr. Riese said. "Our term ended [recently], and they didn't extend it or articulate what they are doing."

Mr. Riese also speculated that Vornado wants to emulate Grand Central Terminal: "They see what happened at Grand Central, where there are trendy local food shops."

But food may not be on the table for his space. Sources say Vornado is leasing the 30,000 square feet that Riese occupies to Duane Reade, which will relocate its current lower-level store. A Duane Reade spokesman declined to comment.