MSG permit extension hits a major snag

[Fenway]

The City of New York gave MSG 10 years to figure something out but here we are less than 2 months to go.

MSG, Penn Station are ‘not compatible’ due to boundaries restricting improvements: MTA

The state-run MTA has signed off on a bombshell 11th-hour report claiming both the station and World’s Most Famous Arena are not compatible.

nypost.com

Bombshell Report: After More than 50 Years, Railroads Now Say MSG is “Not Compatible” Atop Penn Station

For half a century Madison Square Garden, the fourth arena of that name, has sat atop Penn Station like a dental cap sealing the root of an extracted ...

www.westsidespirit.com

The Metropolitan Transportation Authority has signed off on a bombshell 11th-hour report claiming that Penn Station and Madison Square Garden are no longer compatible together.

“The Garden’s site plan and loading arrangements may have been compatible with Penn Station and the surrounding community in the early 1960s,” the state-run agency declared along with station tenants Amtrak and NJ Transit.

“Today, however, MSG’s existing configuration and property boundaries impose severe constraints on the station that impede the safe and efficient movement of passengers and restrict efforts to implement improvements, particularly at the street and platform levels,” according to the analysis, first reported by the West Side Spirit.

The release of Friday’s report — a move the MTA hopes will persuade MSG owner James Dolan to let it make service improvements underground– comes as city officials are set to decide whether the World’s Most Famous Arena can remain long-term at its present site atop Penn Station.

The City Planning Commission on June 7 will begin hearing testimony on MSG’s bid to operate the Garden in perpetuity after its current city permit expires on July 24.'

Dolan sought the same concession when MSG’s original, 50-year permit expired in 2013, but the City Council only gave him a decade.

The Council has the final say on the extension.

The Garden — home of the Rangers and Knicks — owns the property it sits on, but the permit extension is needed for it to continue holding its 19,800-seat capacity.

Without it, the arena can host no more than 2,500.

A spokesperson for MSG Entertainment, which owns the Garden, said: “We are disappointed to see this compatibility report from the MTA and the other rail agencies, considering how we have been cooperating throughout this process. This is the opinion of a few and not all stakeholders involved.”

Click to read more...

 

[gstommylee]

and this is probably where the courts get involved in this mess.

 

[Fenway]

and this is probably where the courts get involved in this mess.

Indeed and the City of NY seems to have a stronger position.

 

[gstommylee]

Indeed and the City of NY seems to have a stronger position.

Its going to be expensive for the city to deal with the lawsuit cause Dolan is stubborn to deal with.

 

[oknazevad]

Two thoughts. Firstly, the NY Post's report has a key detail wrong (shocking, I know). Amtrak actually owns Penn Station, and the LIRR and NJ Transit rent space from them.

An agreement in perpetuity, in fact, as it was the Pennsylvania Railroad's purchase of the LIRR as a subsidiary that allowed Penn Station to be built in the first place; the LIRR's state charter, which it still technically operates under, included permission to access Manhattan. The PRR used that clause to build the station and tunnels, as otherwise they couldn't get state permission as the state was in the pocket of the New York Central, who didn't want the competition. Even though the PRR cut the LIRR loose in 1964 (after which it was purchased by the state and placed under the newly formed MTA) and the PRR merged with the New York Central in 1968 (a total financial disaster that lead to the combined company declaring bankruptcy only a couple of years later, resulting in the formation of Amtrak), the LIRR's access to Penn Station is irrevocable. (NJ Transit inherited the PRR's commuter routes, so that's why they also have irrevocable access.) In short, it's the federally owned Amtrak that has the ownership of the below-ground station infrastructure. So the feds can and probably will get involved.

Because ultimately what the report is stating is that the existence of the current MSG atop Penn's platforms is doing is preventing any needed reconfigurations to improve passenger flow. For all the grandness of the original Penn Station, that's always been its design weakness. The station was really designed entirely for intercity trains, not daily commuters. The platforms are fairly narrow (except for the only one of 11 that was specifically designed for trains outbound to Long Island) and had few access points to the concourses. Though renovations in the 90s and the more recent opening of the Moynihan Train Hall across the street in the Farley post office building have added more stairs and elevators from the platforms, that doesn't address the narrowness, nor the fact that the platforms have more stuff on them now than when they first opened. Most notably the broad columns sitting in the middle of them that support the massive weight of MSG. Moving MSG means they could actually remove those columns and open up space on the platforms as they were originally designed to have. If anyone has ever been on a crowded platform at Penn Station during rush hour, you know how badly even those relatively few square feet of space are absolutely needed.

MSG has to move. It's a matter of safety.

(Can you tell I'm a rail fan, too?)

 

[gstommylee]

Two thoughts. Firstly, the NY Post's report has a key detail wrong (shocking, I know). Amtrak actually owns Penn Station, and the LIRR and NJ Transit rent space from them.

An agreement in perpetuity, in fact, as it was the Pennsylvania Railroad's purchase of the LIRR as a subsidiary that allowed Penn Station to be built in the first place; the LIRR's state charter, which it still technically operates under, included permission to access Manhattan. The PRR used that clause to build the station and tunnels, as otherwise they couldn't get state permission as the state was in the pocket of the New York Central, who didn't want the competition. Even though the PRR cut the LIRR loose in 1954 (after which it was purchased by the state and placed under the newly formed MTA) and the PRR merged with the New York Central in 1968 (a total financial disaster that lead to the combined company declaring bankruptcy only a couple of years later, resulting in the formation of Amtrak), the LIRR's access to Penn Station is irrevocable. (NJ Transit inherited the PRR's commuter routes, so that's why they also have irrevocable access.) In short, it's the federally owned Amtrak that has the ownership of the below-ground station infrastructure. So the feds can and probably will get involved.

Because ultimately what the report is stating is that the existence of the current MSG atop Penn's platforms is doing is preventing any needed reconfigurations to improve passenger flow. For all the grandness of the original Penn Station, that's always been its design weakness. The station was really designed entirely for intercity trains, not daily commuters. The platforms are fairly narrow (except for the only one of 11 that was specifically designed for trains outbound to Long Island) and had few access points to the concourses. Though renovations in the 90s and the more recent opening of the Moynihan Train Hall across the street in the Farley post office building have added more stairs and elevators from the platforms, that doesn't address the narrowness, nor the fact that the platforms have more stuff on them now than when they first opened. Most notably the broad columns sitting in the middle of them that support the massive weight of MSG. Moving MSG means they could actually remove those columns and open up space on the platforms as they were originally designed to have. If anyone has ever been on a crowded platform at Penn Station during rush hour, you know how badly even those relatively few square feet of space are absolutely needed.

MSG has to move. It's a matter of safety.

(Can you tell I'm a rail fan, too?)

And who's going to pay to move MSG?

 

[Boris Zubov]

Two thoughts. Firstly, the NY Post's report has a key detail wrong (shocking, I know). Amtrak actually owns Penn Station, and the LIRR and NJ Transit rent space from them.

An agreement in perpetuity, in fact, as it was the Pennsylvania Railroad's purchase of the LIRR as a subsidiary that allowed Penn Station to be built in the first place; the LIRR's state charter, which it still technically operates under, included permission to access Manhattan. The PRR used that clause to build the station and tunnels, as otherwise they couldn't get state permission as the state was in the pocket of the New York Central, who didn't want the competition. Even though the PRR cut the LIRR loose in 1954 (after which it was purchased by the state and placed under the newly formed MTA) and the PRR merged with the New York Central in 1968 (a total financial disaster that lead to the combined company declaring bankruptcy only a couple of years later, resulting in the formation of Amtrak), the LIRR's access to Penn Station is irrevocable. (NJ Transit inherited the PRR's commuter routes, so that's why they also have irrevocable access.) In short, it's the federally owned Amtrak that has the ownership of the below-ground station infrastructure. So the feds can and probably will get involved.

Because ultimately what the report is stating is that the existence of the current MSG atop Penn's platforms is doing is preventing any needed reconfigurations to improve passenger flow. For all the grandness of the original Penn Station, that's always been its design weakness. The station was really designed entirely for intercity trains, not daily commuters. The platforms are fairly narrow (except for the only one of 11 that was specifically designed for trains outbound to Long Island) and had few access points to the concourses. Though renovations in the 90s and the more recent opening of the Moynihan Train Hall across the street in the Farley post office building have added more stairs and elevators from the platforms, that doesn't address the narrowness, nor the fact that the platforms have more stuff on them now than when they first opened. Most notably the broad columns sitting in the middle of them that support the massive weight of MSG. Moving MSG means they could actually remove those columns and open up space on the platforms as they were originally designed to have. If anyone has ever been on a crowded platform at Penn Station during rush hour, you know how badly even those relatively few square feet of space are absolutely needed.

MSG has to move. It's a matter of safety.

(Can you tell I'm a rail fan, too?)

Excellent summary. Thanks for the history lesson.

However, as someone who unhappily had to commute through Penn for over a decade, the biggest issue the station faces is the lack of train access from both NJ & Queens. Until they can bore more tubes under each river, Penn will be saddled with the same overcrowding problems. Sure wider platforms would be helpful, but moving trains in & out faster alleviates the rush hour bottleneck therefore less people are stuffed inside the terminal.

 

[Tawnos]

The city and the other stakeholders are going to try to create every point of leverage they can here, because Dolan holds the best hand in this situation.

 

[Yukon Joe]

The city and the other stakeholders are going to try to create every point of leverage they can here, because Dolan holds the best hand in this situation.

Why would you say that? At its most basic, once your lease expires you no longer have any rights to the area. Even if you make extensive leasehold improvements those revert base to the lessor at the end of the lease.

Now obviously the situation isn't that simple. You have multiple agreements going back decades and you'd need to review all of them in detail. As well when governments are involved so are politics, with lots of competing interests.

BUt this is absolutely not a slam dunk for Dolan, which is why it's still an issue 10 years later.

 

[Tawnos]

Why would you say that? At its most basic, once your lease expires you no longer have any rights to the area. Even if you make extensive leasehold improvements those revert base to the lessor at the end of the lease.

Now obviously the situation isn't that simple. You have multiple agreements going back decades and you'd need to review all of them in detail. As well when governments are involved so are politics, with lots of competing interests.

BUt this is absolutely not a slam dunk for Dolan, which is why it's still an issue 10 years later.

Dolan doesn't have a lease. He owns the building and the property at ground level, plus the air rights. What he also has is a permit to operate an event center that can host 19-20k people or so. It's an issue 10 years later because the city dug its heels in (which, I can't really blame them given the way that Dolan has operated in certain instances, like funding the ad campaign that killed the West Side stadium for the Jets).

The city has four options here:

1) Negotiate with Dolan to build a new MSG somewhere else, giving him plenty of public funding and incentives to do so.
2) Invoke eminent domain and be responsible for compensating Dolan for the value of the property, plus pay for the new site... which will cost the city $10B+
3) Let the permit lapse without giving Dolan anything. The problem with this is that Dolan is likely to lose less money if he were to sign a lease at Barclays or Prudential than he is likely to lose trying to build a new arena himself. That might even be the case if he were only allowed the 2500 fans in attendance or whatever it is.
4) Renew the permit while gaining some concessions in the process... which is what the MTA has been trying to do in this process this go around.

Option 1 is the best for all parties involved, but no one seems to be in the frame of mind to work on it.... yet again. They should have done so 10 years ago.

 

[Tawnos]

I just realized the thing about him having a "lease" partially comes from this thread title, which should read "MSG permit extension hits a major snag"

I'm not even "major snag" represents a good characterization for what this compatibility report does, but at least it would fix the incorrect terminology in the title. @Fenway?

 

[Boris Zubov]

Why would you say that? At its most basic, once your lease expires you no longer have any rights to the area. Even if you make extensive leasehold improvements those revert base to the lessor at the end of the lease.

Now obviously the situation isn't that simple. You have multiple agreements going back decades and you'd need to review all of them in detail. As well when governments are involved so are politics, with lots of competing interests.

BUt this is absolutely not a slam dunk for Dolan, which is why it's still an issue 10 years later.

Politicians are idiots but they all want to get re-elected. As much as Penn Station needs a do-over, there a plenty of voters who really enjoy attending events at MSG because of the convenience the location offers. Evicting the building, if that's even feasible, isn't quite political suicide, but it's pretty close.

 

[Takuto Maruki]

At least from the outside, this looks like one of those things that is 80 layers of civic politicking, but I do know one thing: you simply aren't going to get two franchises that clear over the billion mark in terms of value, alongside a massive suite of concerts and events, and the owner who is a cantankerous asshole *at best* to pack their shit and hit the road. Especially considering that there's likely going to be local opposition to any arena built anywhere else.

 

[Yukon Joe]

At least from the outside, this looks like one of those things that is 80 layers of civic politicking, but I do know one thing: you simply aren't going to get two franchises that clear over the billion mark in terms of value, alongside a massive suite of concerts and events, and the owner who is a cantankerous asshole *at best* to pack their shit and hit the road. Especially considering that there's likely going to be local opposition to any arena built anywhere else.

Yeah the notion that they should just build a new MSG at a new location... Look how hard that was on Long Island - if you want to keep the arena on Manhattan the land value along would be astronomical - if you could even find that much land to develop.

And if the Rangers aren't on Manhattan then that could seriously damage the fanbase.

 

[Tawnos]

Yeah the notion that they should just build a new MSG at a new location... Look how hard that was on Long Island - if you want to keep the arena on Manhattan the land value along would be astronomical - if you could even find that much land to develop.

And if the Rangers aren't on Manhattan then that could seriously damage the fanbase.

The motivation to get MSG off of the Penn Station site is something that the Long Island people never had. If there was ever a real, serious good faith effort from both sides to do it, it would get done. Will that ever happen? Who knows... it hasn't yet. Right now the focus seems to be on getting some flexibility on the site from Dolan in exchange for a permit renewal. Dolan wants that renewal to be in perpetuity.

As for finding that much land to develop, there's actually plenty of it... Hudson Yards, the site of Manhattan mall, the site of the Port Authority Bus Terminal ramps... those are three options I can think of off the top of my head.

 

[DaBadGuy7]

Yeah the notion that they should just build a new MSG at a new location... Look how hard that was on Long Island - if you want to keep the arena on Manhattan the land value along would be astronomical - if you could even find that much land to develop.

And if the Rangers aren't on Manhattan then that could seriously damage the fanbase.

West 34 Street near the Macy’s there was a site proposed a few years ago and might work:

I posted this on a previous thread on a new MSG proposal on West 34 Street, which I think this the best possible location for a new arena:

 

[jkrdevil]

The time to “relocate” MSG was 15 years ago before MSG underwent a $1 billion renovation. Then a deal could have been struck. Dolan isn’t going to sink any money into a new development after just dropping that money for renovations.

 

[KevFu]

The "relocate" part in quotes is amusing to me because MSG has moved like three times.

 

[patnyrnyg]

Before Dolan renovated MSG, he tried to move the arena across the street to the Farley building and the city/state/fed/whoever could have done whatever they need to do with the current MSG to improve the station. The City Council or whoever it was dragged their heels, Dolan got frustrated and said screw it. Renovated MSG instead. Whenever some local politician wants to get their name out there, they bring this up. Christine Quinn (think it was her) brought it up when she was trying to get the democratic nomination for mayor. She lost to DeBlasio and not even sure if she is still involved in politics in this area. This is an argument that is going to be going on for years and years. Someday my 5 year old will bring it up and I will point out they have talking about this since before she was born. My dad just turned 72 and can tell you how they have been trying to "fix" the BQE since he was was a kid.

 

[patnyrnyg]

Yeah the notion that they should just build a new MSG at a new location... Look how hard that was on Long Island - if you want to keep the arena on Manhattan the land value along would be astronomical - if you could even find that much land to develop.

And if the Rangers aren't on Manhattan then that could seriously damage the fanbase.

different animal. Issue with a new Nassau Coliseum is you had to deal with Nassau County for some aspects of the project and the Town of Hempstead (a local government WITHIN Nassau County) for others. Secondly, nothing was going to be approved if it meant any taxes to residents. Not even for an extra $5 annually across the board.

 

[patnyrnyg]

Also, Dolan is a petulant child. Think of the whiniest, brattiest person you ever worked for/with, and Dolan is likely worse. If the City Council thinks he is going to just give up MSG and go find another place, they are mistaken. He will let the permit expire and allow the building to sit there vacant while finding a temp home for the Rangers and Knicks. Or, he will simply limit capacity to 2500 and take the losses. Yes, he will do this just to be spiteful. He is not going to be strong-armed.

 

[Yukon Joe]

different animal. Issue with a new Nassau Coliseum is you had to deal with Nassau County for some aspects of the project and the Town of Hempstead (a local government WITHIN Nassau County) for others. Secondly, nothing was going to be approved if it meant any taxes to residents. Not even for an extra $5 annually across the board.

Not entirely a different animal. I am no expert on the politics of NYC but I do understand there are often multiple different government agencies to try and work through. As pointed out above you have the MTA, Amtrak (and through Amtrak the federal government), plus NYC itself. Building almost anywhere else on Manhattan is likely to involve in other government agencies (who knows - Harbour Authority, various environmental or building permits, etc).

So what's the proposal here. That Dolan just go build a new arena on his own? He's going to fight that tooth and nail. He sunk one billion dollars just 10 years ago on upgrades. What would the cost of a new MSG plus land cost? I can't begin to imagine it.

Then the idea is Dolan get subsidized somehow to build a new arena. WHat government agency is going to want to give money to a billionaire sports owner? I can't begin to imagine that either.

 

[oknazevad]

Excellent summary. Thanks for the history lesson.

However, as someone who unhappily had to commute through Penn for over a decade, the biggest issue the station faces is the lack of train access from both NJ & Queens. Until they can bore more tubes under each river, Penn will be saddled with the same overcrowding problems. Sure wider platforms would be helpful, but moving trains in & out faster alleviates the rush hour bottleneck therefore less people are stuffed inside the terminal.

You're not wrong. The Gateway Tunnel project to dig additional two additional tubes to New Jersey is an absolutely, even direly, critical public works project. Not only are there only two tubes to Jersey now (as opposed to the four to Long Island), but those two were completely inundated during Hurricane Sandy, and the concrete lining of the cast iron tubes is starting to crumble because of the damage from the salt water. They need to be each temporarily taken out of service and have the concrete completely replaced. But that can't be done until the new tunnels are in place to pick up the slack. And those new tunnels are going to require some level of reconfiguration of the track level. Which is made significantly more difficult by having to bear the weight of MSG during the whole thing.

 

[oknazevad]

I think the issue here that most people don't realize is that the current version of Penn was designed to serve a third of what the modern ridership actually turned out to be. Penn Station is busier than it's ever been, in absolute ridership terms, even greater than the golden years of intercity rail travel.

Frankly, the best place to have put a new MSG was a block west on the west side of Ninth Ave between 31st and 33rd. For decades that was just open air above the Penn Station yard tracks. But it's since (in the last ten years) been decked over and has a couple of luxury condo towers on top of it.

The Manhattan Mall (the old Gimbles building, for you Miracle on 34th Street fans) site mentioned above is literally a block from the current MSG. Putting it there loses essentially zero of the location benefits of the current building.

 

[Fenway]

I am flabbergasted that Dolan has painted himself into a corner.

He was given 10 years to figure out a solution but he believes that Madison Sq Garden is more important than Pennsylvania Station.

It seems ludicrous to even suggest this but the Rangers and Knicks could be facing playing at MSG with only 2500 seats...........