If Madison Square Garden sells the Liberty, where are they going to play?

The owners of the New York Liberty, one of the WNBA’s three remaining original franchises still in the same city they started off in, are putting the team up for sale. That’s of interest if you’re a WNBA fan — I’m actually a former Liberty season ticket holder, so I qualify as one of the few and the proud even if I haven’t been to see a game in the last couple of years — but also for readers of this site in general, because of what it says about the arena industry.

In brief: The Liberty are owned by James Dolan’s Madison Square Garden Co., which also owns the Knicks, the Rangers, and its namesake arena. The team, and the WNBA in general, was launched in 1997 for a bunch of overlapping reasons: to take advantage of excitement over the 1996 U.S. women’s Olympic basketball team, to fill dates in the otherwise-slow summer months (which is why the league plays outside of the traditional wintertime schedule for basketball), to make the NBA look women-friendly and provide a more affordable product to rope in fans priced out or alienated by the men’s game, and to beat down an attempt by the independent American Basketball League to horn in on the NBA’s pro hoops monopoly. The ABL was gone within a year and a half, and the Olympians were soon forgotten, but the WNBA has burbled on for another two decades, with modest attendance and revenues but remarkable longevity for a startup league, in no small thanks to the NBA’s financial backing.

That’s starting to change, though: While originally all the WNBA teams were fully owned offshoots of NBA siblings — down to teams getting sister names, like the Sacramento Monarchs to complement the Kings and the execrably named Detroit Shock to go alongside the equally-terribly-named-if-you-think-about-it Pistons — that’s starting to change, with more and more teams independently owned and operated. And the Liberty would be the biggest independent team of all once cut loose from MSG, which clearly has decided that it would rather get out of the women’s basketball game and stick to its core business of crappy men’s teams and lots and lots of concerts.

The big question for a future Liberty owner, meanwhile, is: Where are they going to play? Renting out MSG is a possibility, of course, but unless there’s some sweetheart lease deal baked into the sale agreement, it would likely be prohibitively expensive, since you’d be bidding against all those concerts. The Barclays Center in Brooklyn is another option that might come slightly cheaper, but again it’s pretty busy with concerts, even in the summer. (One problem with a basketball schedule is that it seriously restricts your flexibility for hosting concerts, which are typically booked long after a team’s home games are set in stone.) When MSG was getting renovated in the summers a few seasons back the Liberty played in Newark’s Prudential Center, but attendance was pretty bad (I picked up Stubhub seats ten rows from the court for one game for $3 apiece); Nassau Coliseum desperately needs something to fill dates, but it’s way out on Long Island.

I suppose a new Liberty owner could try to demand a new arena of their own, but that’s not going to go far when your fan base is the size of a WNBA team’s. Maybe this could all be part of the plan to build a new arena for the Islanders out by Belmont Park, something that Dolan is a part-investor in, so … I dunno, we’re deep into the tea leaves here. It’s an interesting moment, though, one that could end up revealing a lot about not only the future of women’s pro sports, but how arena managers are thinking about the relative value of sports vs. other events. I’ll have more on this soon, I hope.

NYU study: Relocating MSG would cost $5B, give it a rest already

Certain sectors of the New York City policy world (the Municipal Art Society, the New York Times editorial board) have been calling for a while for the relocation of Madison Square Garden, so that a new, grand Penn Station could be built in its place. (The old, grand Penn Station was demolished in the 1960s to make way for the current Madison Square Garden, the fourth building to bear that name.) NYU’s Rudin Center for Transportation Policy and Management released a study last week of how much it would cost to do this, and came up with … do I hear $5 billion?

Screen Shot 2016-05-06 at 8.23.17 AMThis isn’t really all that surprising: A billion and a half for a new MSG sounds about right given that just renovating the old one cost a billion, and acquiring new land could easily cost half that in this market. (The Rudin report looks at the price of buying up the annex to the Farley post office building across the street Morgan post office annex a couple of blocks to the southwest, but other sites would be priced similarly, if you could even find any.) And almost $3 billion for building a new Penn Station is already the price tag established by Gov. Andrew Cuomo for his plans (which would leave MSG intact but build lots of new stuff under it).

It’s also important to consider the political context, with Cuomo’s plan to expand Penn Station with MSG in place (to be paid for by some as-yet-unidentified private developer — applications were due two weeks ago, but if any have been revealed it’s news to me) going up against the MAS and Regional Plan Association’s insistence that MSG really needs to be kicked out. Given that Rudin director Mitchell Moss has already endorsed Cuomo’s plan, and his report’s conclusion is “It’s time to move on,” it’s easy to see some political gamesmanship going on here.

Still, this whole mess is a reminder that as easy as it is to envision redesigning your city to undo past mistakes (tearing down one of the greatest public spaces ever, building a kind-of-ugly sports arena in its place), there’s something to be said for actually existing architecture, both in that it’s already paid for, and in that the city has grown up around it to accommodate it. Not to say that nothing should ever get built or torn down, but it’s important to look at the true costs of doing so, and whether the money could be better spent mitigating the effects of your last mistakes.

MSG now earning more than $50m a year in property tax breaks

The New York city council is gearing up for another run at Madison Square Garden’s 32-year-old full property tax exemption, and the city’s Independent Budget Office has a new estimate of how much MSG’s owners will get from it: $54 million in 2015, based on the projected increased value of a renovated Garden. The total value of MSG’s exemption now stands at a whopping $541 million*.

While the IBO doesn’t make policy recommendations, it just presents policy options, economist George Sweeting makes it pretty clear what the agency thinks of the MSG tax break, noting that “there is broad consensus within the economics field that government subsidies for sports facilities are not an effective use of scarce public resources,” that the Garden’s is the only property-tax exemption that applies only to a single property and is open-ended (most other property tax breaks end after a number of years, but the state legislature neglected to include a sunset provision in this case), and any threat that may have existed in 1982 of the Knicks and Rangers leaving town has long since gone by the wayside.

Of course, the council already voted once before to axe the MSG tax break, in 2008, but it didn’t accomplish anything because the tax exemption is enshrined in state law, it’s impossible to get the New York state legislature to do anything, really. Unless you’re a rich guy looking for a tax break, in which case the three men in a room would be happy to serve you.

*[UPDATE: IBO confirms that $541 million is the present value of the tax exemption over the next 30 years, net of tax breaks that would be available to any company, not just MSG. So allowing the tax break to remain in place for another 30 years would cost New York City $541 million in present-value 2014 dollars.]

NYT to MSG: Get lost, we wanna rebuild our underground train station

This is really weird: The New York Times has an editorial today calling for New York City to refuse to renew Madison Square Garden’s lease zoning permit on the land atop Penn Station, which apparently expired in January. The argument: MSG is “bulky” and “drumlike” and is in the way of a grand renovation of Penn Station that nobody really wants to spend the money on anymore, but anyway, “The Garden has moved twice since its original location in Madison Square. It can move again.”

The Times does note in passing that MSG’s owners just spent about $1 billion on renovating the arena, and that “of course makes them less eager to move” — and then suggests that they instead be given a new 10-year lease, “and use the time to find a new home for the Garden.” Because it totally makes sense to tear down a building that just got $1 billion in upgrades so you can tear down something else and spend another $1 billion on a new one.

This smells like the Times is carrying water for someone, but I’ll be damned if I can figure out who. Old-time rail terminal fans who are holding out hope for the Moynihan Station plan? Developers hoping to revive some plan to do a giant development project on the site? And in any case, if you want the city to lean on MSG over something, why no mention of that perpetual property tax exemption they’re still getting? Very, very weird…

MSG renovations on for 2011, sending Liberty into three-year exile

The on-again, off-again renovations to Madison Square Garden are back on again, slated to begin next summer and be completed by Fall 2013, a full year later than at last report. By limiting work to the summer, MSG will be able to avoid disruptions to the New York Knicks and Rangers schedules, but as I wrote on the Village Voice website yesterday, the New York Liberty WNBA franchise won’t be so lucky:

This won’t be the first time that the Liberty will be forced to relocate: The orange-teal-and-black were displaced to Radio City Music Hall for part of their 2004 season so that George W. Bush could be re-coronated on their home court. But there’s a big difference between shifting a few home games 20 blocks north and completely pulling up shop for three seasons…

As for future summers, it’s as yet unclear where Maddie will be parking her doghouse. Newark’s Prudential Center, as the Times suggested, is the most accessible big arena to city Liberty fans, and would if nothing else lead to a rise in the average Kinsey number among PATH ridership. (It could also make for a nice low-cost option for hoops fans in one of the tristate area’s most impoverished cities; Liberty games at the Garden are already distinct from Knicks games for drawing a large number of African-American teens of all genders.) And with MSG renovations slated to last through 2013, there’s even the possibility of a one-season stay in Brooklyn, given that Bruce Ratner’s Atlantic Yards is still — officially, at least supposed to be complete by late 2012. Liberty officials didn’t immediately return calls seeking more info on the team’s plans.

The renovation itself, which will essentially end up gutting the Garden and building a new seating bowl inside the existing shell, are now estimated to cost between $775 million and $850 million, all of which will be paid for by MSG’s corporate owners. MSG’s corporate owners who already get an $11 million a year tax break from the city of New York, mind you, but it’s still a pleasant change to see a sports team not asking for new subsidies on top of the ones they’ve already received.