News Article: MSG gets 10 year permit

[GordonGecko]

Enclosed doesn't mean a roof, it means encircled by seats

My apartment is enclosed. Doesn't mean it's encircled by seats.

a·re·na [uh-ree-nuh] Show IPA
noun
1. the oval space in the center of a Roman amphitheater for gladiatorial combats or other performances.
2. a central stage, ring, area, or the like, used for sports or other forms of entertainment, surrounded by seats for spectators: a boxing arena; a circus arena.
3. a building housing an arena.
4. a field of conflict, activity, or endeavor: the arena of politics.

 

[dstoffa]

I'm sure MSG will sue the city. They've said that they meet the qualifications for a permit extension, but the city just doesn't want them there anymore. I'm not a lawyer, but I believe MSG owns the land as well as the rights above it so I'm not sure they city is totally within their rights to tell MSG that they have to move their building. If they want to take over the property, I think they have to use eminent domain, which is different from limiting the term of their land-use permit. Eminent domain would entitle MSG to "fair market value" for their property, which I would imagine would be several billion dollars when you take into account all the money they just spent on the renovations plus the value of 2 city blocks in the middle of midtown.

The Madison Square Garden Corporation purchased the air-rights to Penn Station from the Pennsylvania Railroad back in the late 50's. It took them 6 years to draw up plans, get the necessary approvals, and finally get the jack-hammers moving. The building is private property. Amtrak owns what is left of Penn Station, and that is all underground.

If the City is really going to attempt to evict MSG, they'd have to pay fair market value for the property. That will be litigated for years. Then, they will have to demolish MSG and the office tower on the 7th avenue end of the block, in order to prep the site for a new head-house. That will cost even MORE money. Then they need to design and construct a new head house, and that is just more money. It is not money well spent. NONE OF THIS WILL IMPROVE THE CAPACITY OF PENN STATION. The Station needs more tracks, and more platforms. The only way that is accomplished is by expanding Penn Station south to 30th St, and north to 34th Street, and building new tunnels under the Hudson River. And that my friends is VERY VERY expensive. And with the new tunnel to Macy's basement scuttled last year, the cost will just keep rising. If they couldn't afford it last year, I don't think they can afford it this year or ten years from now.

If the goal is to increase Penn's capacity, build the tunnels and tracks and platforms first, then worry about the ornamental head house. The heart of the station is in the trackage.

The City's actions are just postering, to demonstrate to the public that they are pro-transit. A city that is crying poverty has no business undertaking this action.

In ten years the Garden will get another ten years. There simply is no money for this improvement.


Cheers!
-Doug

 

[Crease]

Nice post Doug. That is the crux of it. Political grandstanding as the mayoral election approaches.

 

[GordonGecko]

The City's actions are just postering, to demonstrate to the public that they are pro-transit. A city that is crying poverty has no business undertaking this action.

In ten years the Garden will get another ten years. There simply is no money for this improvement.

Except that at any renewal period, the city can simple padlock the garden and ban any events for lack of a license. That is pretty strong leverage, probably not enough to get a meaningful discount on purchase rights, but probably enough to take away the property tax exemption or force MSG to renovate Penn Station

 

[dstoffa]

Except that at any renewal period, the city can simple padlock the garden and ban any events for lack of a license. That is pretty strong leverage, probably not enough to get a meaningful discount on purchase rights, but probably enough to take away the property tax exemption or force MSG to renovate Penn Station

Think of the payroll taxes the city would lose (players and garden workers).
Think of the sales taxes the city would lose (tickets and concessions).
Think of the people who would be out of work.
Think of the bad publicity. Who wants to be the guy who chases the Knicks and Rangers out of Manhattan.

And the City has no say about renovating Penn Station. Amtrak owns it all.

If I were the Garden, I would say to the City, "Make me whole." The City doesn't have that kind of money to spend on such endeavor.

Nobody wins. Detente indeed.

 

[GordonGecko]

Think of the payroll taxes the city would lose (players and garden workers).
Think of the sales taxes the city would lose (tickets and concessions).
Think of the people who would be out of work.
Think of the bad publicity. Who wants to be the guy who chases the Knicks and Rangers out of Manhattan.

And the City has no say about renovating Penn Station. Amtrak owns it all.

If I were the Garden, I would say to the City, "Make me whole." The City doesn't have that kind of money to spend on such endeavor.

Nobody wins. Detente indeed.

That never stopped these sort of disputes from happening before, and it becomes a PR fight. The city will try to get something out of this, we just don't know what yet

 

[1 Timer]

Question? Why did they not move to the old PO site across the street?

 

[NYRKindms]

Question? Why did they not move to the old PO site across the street?

The first design was for them to do that. Then there was some issues about who the tenants would be etc. It seems from the wiki page that they are going to renovate that building and want MSG gone for further dev.

https://en.wikipedia.org/wiki/Pennsylvania_Station_(New_York_City)

 

[twistedwrister]

The first design was for them to do that. Then there was some issues about who the tenants would be etc. It seems from the wiki page that they are going to renovate that building and want MSG gone for further dev.

https://en.wikipedia.org/wiki/Pennsylvania_Station_(New_York_City)

I think the city was also unwilling to extend the tax break that MSG currently has if they moved

 

[Whiplash27]

I don't see the Garden moving at the end of the day. The city should just move Penn Station and be done with it. It can't cost much more than moving the Garden.

 

[Crease]

Question? Why did they not move to the old PO site across the street?

Dolan said that a final decision needed to be made by 2008. By spring of 2008, due to Pataki's foot-dragging, Eliot Spitzer's scandal, and Steve Roth and Steve Ross inflating the project into a $14b behemoth involving several city blocks, the project never really got off the ground. That and the NYC Council refused to continue MSG's tax break at a different address.

Why the 2008 deadline? Not entirely sure.

 

[Melrose Munch]

Why can't the Rangers move to White Plains?

 

[HockeyBasedNYC]

Penn Station is terrible and it sucks that one of the main ways into the city is cramped and unimpressive. That said, this should've been discussed before Dolan started the renovation process. If they wanted MSG to move, then they should've been more supportive of the Farley Post Office plans.

Bingo - All i heard then was a bunch of conservationists complaining that moving there would ruin the integrity of the building etc etc. Can't have it both ways. The train station IS more important, because its the main commuter point of the city, but you're right, this shouldve been discussed years ago.

 

[frozenrubber]

The issue not being discussed, property taxes.

Madison Square Garden pays none. It was meant to be a 10 year abatement that started in 1982 (after MSG threatened to leave NYC for NJ). However, the subsidy never went away.

Madison Square Garden would of paid $17 million in property taxes this year if they weren't exempt (saved 300 million between 1982 and 2007).

For all the work Dolan did in lobbying to make sure the Westside Stadium never happened (and making MSG the only game in town/Manhattan), the first order should be making the HIGHLY profitable MSG pay it's fair share in property taxes.

 

[Glennsoe]

Found at another messageboard;

In a February 2012 article in the NY Times, Michael Kimmelman writes that a possible solution to redeveloping Penn Station and moving Madison Square Garden is to place MSG at the site of the Jacob Javits Center.

He notes that Governor Andrew Coumo has proposed that the Javits Center would be knocked down and a new convention center would be built at the Aqueduct Racetrack and Kimmelman says that MSG could be placed at 34th street and 11th avenue.

He writes “It would stand at the northern culmination of the completed High Line, and at the doorstep of a redeveloped Hudson Yards, where the new extension of the No. 7 subway line from Times Square will stop.”

Kimmelman also notes that there is a plan for dedicated bus service from Penn Station to 34th street and 11th avenue to go along with the extension of the 7 train which is expected to be finished next summer.

 

[twistedwrister]

Article from the post written a few months ago by an MSG exec that sums up their position pretty well:
http://www.nypost.com/p/news/opinion/opedcolumnists/special_interest_snakes_the_garden_TtHyGwKOfBwUEc9u2pukqO

Facts are stubborn things, however. MSG owns the land and the building, where it has been operating for 45 years as a sports and entertainment complex. Not only can we not be forced to move, but we’d still have the right, even if there was no arena, to build an office tower, with no obligation to free up space for Penn Station.

Equally false is the idea that the Garden’s departure would result in a new Penn Station. The creation of Moynihan Station has been a 20-year discussion, with very little progress or funding to show for it. MSG spent millions of dollars and almost three years exploring a move to the Farley Building as part of the new vision for Moynihan Station — only to watch the plan collapse for a number of reasons unrelated to us.

Even if there were a feasible plan to improve Penn Station, it would need massive funding — in excess of $1 billion, not including the billions more that would be needed to compensate MSG for its property and the building of a new arena.

 

[Lindberg Cheese]

A

Nice post Doug. That is the crux of it. Political grandstanding as the mayoral election approaches.

Agree. More Weiner, less Quinn please. By that time, Souter will have retired from the Supreme Court meaning that eminent domain loses a vote for nefarious application.

 

[vipernsx]

Rangers should have just temporarily relocated to the Meadowlands, blown up Penn and redone the whole thing. NYC could have had 1B towards a beautiful new building. Instead, we'll end up with endless debates on what to do.

 

[Lindberg Cheese]

Article from the post written a few months ago by an MSG exec that sums up their position pretty well:
http://www.nypost.com/p/news/opinion/opedcolumnists/special_interest_snakes_the_garden_TtHyGwKOfBwUEc9u2pukqO

So where is this money coming from, the big gulp tax? Im glad the economic crisis is over so we can address priorities like moving sports arenas around fot billions.

 

[ThisYearsModel]

I thought the Farley idea was a good one. Too bad it did not work out. Also too bad Dolan was successful in blocking the Jets stadium. A new Garden would have fit nicely in that neighborhood.

 

[Clowes Line]

Article from the post written a few months ago by an MSG exec that sums up their position pretty well:
http://www.nypost.com/p/news/opinion/opedcolumnists/special_interest_snakes_the_garden_TtHyGwKOfBwUEc9u2pukqO

So in other words, MSG isn't going anywhere.

 

[Brooklyn Ranger]

Yes yes yes. I've been all over Europe. Nowhere have I seen subways as dirty and as ugly as in NY.

Anyway, why didn't they bring this up before renovations started? So dumb.

NYC is the only subway system that's open 24 hours a day--it's a lot easier to clean up when the system is closed 4-5 hours a day.

And obviously the posters complaining about the system weren't riding it in the late 1970s and early to mid 1980s.

 

[Flavius]

A 10-year renewal makes sense. A perpetual lease doesn't. The city reserves the right to evaluate the site years down the line and determine if it still makes sense for an entertainment center to be located on top of a major transportation hub. Capacity and access change over time.

That said, I don't see MSG moving for a long long time. The city might claim eminent domain but they're going to have a hard time getting around the 5th Amendment Takings Clause. Can you imagine what the "just compensation" would be? It would make Bill Gates sweat. It might even be cheaper for NYC to move Penn Station than it would be to give Dolan fair value of the building and a new plot of land in the heart of Manhattan. I think the city is just getting their ducks in a row so that they can revoke the tax breaks MSG is currently getting.

Sounds to me like you've been a 1L at some point in your life, Crease.

It isn't private property though, and isn't it just a lease by the government? Does the takings clause even apply to municipalities? I guess the City could do it, but they would simply have to take in all of the political factors into account.

Wonder where they would move the new Garden too. Post office lot would be the best alternative. Maybe back a few blocks uptown like in the old days? Wouldn't be very efficient for LIRR commuters.

 

[Crease]

Sounds to me like you've been a 1L at some point in your life, Crease.

Not yet. Starting in two weeks.

It isn't private property though, and isn't it just a lease by the government?

Actually it is private property. MSG Inc owns the air and development rights. Amtrack owns everything at and below ground. The lease is really a land-use permit that allows MSG Inc to operate an 18,000+ seat arena because city zoning laws impose a 2,500 seat limit in the area. The city can reject the permit application when the land-use permit is up for renewal, but MSG Inc is still entitled to do whatever they want with the above-ground space. Dolan can replace the arena with a lemonade stand if he wants. The city can take back the land by invoking eminent domain but they have to compensate MSG Inc for it. Fair market value. And that is a whole heckuva lot of money. Even moreso now due its shiny new coat of paint. Probably why Dolan imposed a 2008 deadline on the Moynihan Station decision. Wanted to get the renovation done before the permit expired and maximize land value.

 

[bobbop]

The only people who will get rich on this deal are the lawyers.