A little pressed for time this morning, but I didn’t want to let pass this editorial in City & State, a New York state political news site that has reprinted my work at least once, arguing that Gov. Kathy Hochul should give Madison Square Garden owner James Dolan $800 million to see if he’ll move the Knicks and Rangersout of the arena and build a new one elsewhere. A brief annotation:
If the Buffalo Bills got $800 million in public funds to build their new stadium, why not work on a similar plan for the Garden?
Um, because even if you reject the state’s stupid estimates for the cost of moving the Garden, it’s still likely to cost around $3 billion to build a new arena anywhere that Dolan would want to move to, and his minions have stated that he won’t agree to decamp unless he’s made whole for the cost of relocating? So $800 million is simultaneously way too little to get the job done if you’re hoping to pay off Dolan to get him out the way, and way too much if you think giving $800 million to one of New York’s most hated billionaires who’s already gotten $875 million in inflation-adjusted tax breaks is not the best use of state money.
Eddie Small of Crain’s New York Business also suggested that the move could help play into Vornado Realty’s ambitious development plan around Penn Station, which was put on hold because of market conditions.
That’s Crain’s New York piece is worth reading if only for its incredible lede, which focuses on how hungry the author used to get while covering community board meetings, and its central tenet is pretty amazing, too: “I don’t know if a new Garden is something Vornado, the state or MSG itself would actually commit to doing, but it’s a worthwhile conversation to have.” Sure, if your local real estate giant is backing away from building publicly subsidized office towers because it’s realized nobody needs office towers in the age of Zoom meetings, offer them a chance to build a new arena instead, or in addition, or to make room for still more office towers, or something. (Small’s article doesn’t say, possibly because he had to stop writing abruptly because he was hungry.)
I’m personally saddened by the Hotel Pennsylvania’s loss, being that it was built to complement the original Penn Station across the street. However, using the site for a new arena does offer a consolation and opportunity for all interested parties to see progress made that ultimately benefits the community around the Garden and the rest of the city.
How exactly does — you know what, never mind, a close reading isn’t what this editorial needs. All anyone needs to understand is that some people really, really want a new Penn Station — look, here’s a whole New Yorker article written from their perspective — and are going to push for it to happen no matter the cost or whether it really benefits the community around the Garden and the rest of the city. This is the kind of political leverage that corporate subsidy cravers dream of, and it’s little wonder Dolan’s henchman opened the door last week to building a new Garden if his boss’s palms are greased enough: You can’t get if you don’t ask, and the best way to move the Overton window is to get people haggling over the price.
So $3 – 4 billion just to move an arena that just got $1 billion in upgrades across the street? On top of that, replacing another historic building?
What happens in another 60 years when people bemoan the loss of the Hotel or the 1960s era Garden? Tear down the Macy’s building?
Yes, the Hotel Penn behemoth is already destined for the wrecking ball, but repeating a similar mistake 60 years later just doesn’t make sense.
Agreed. I can’t imagine there’s that many New Yorkers that want their tax money used in this way, or to even build the Bills a new stadium.
Huh? You think that people in 60 years are going to care about the loss of the Hotel Pennsylvania? People don’t care now! It’s an ugly building that has little historical value. Nobody is going to care.
Also if they build a new Garden nobody is going to care about the loss of the old one either.
Enough people care to lobby for it’s preservation as a landmark (multiple times). I get it, it isn’t Penn station and the society rejected all the applications. That doesn’t mean no-one cares about it’s place in history.
My guess would be that if Penn station had been preserved it’s connection to the Hotel would have made it worthy of preservation too.
Vornado’s lack of ‘plans’ to maintain the building have way more to do with their disinterest in doing so (while still making money) than inability to do so.
Do New Yorkers really want a new (or new/old) Penn Station or are they just fed up with the current one (and it’s Dolan related squatters)?
Count me among those who believe this is less about wanting to pay Dolan to go away (although, how can you put a price on having James Dolan just leave?) and more about benefitting Vornado and whatever their plans are this week.
Redevelopment might be beneficial, but then, so might preservation (witness Penn Station itself, and Grand Central for that matter).
It’s a shame that Vornado gained control of the hotel, but then, it’s not like there were a stampede of bidders. My guess would be that most of those were seeking significant public funding for restorations/renovations as well.
There’s a great article in the New Yorker today, “The fight over Penn Station and Madison Square Garden,” that seems to indicate that NOTHING will get done anytime soon, and that New Yorkers and those that need to use the rat’s den that is the current Penn Station, will continue to have to deal with its current and likely future state, because political will is nonexistent, and the billionaires like James Dolan have the lobbyists to ensure nothing gets done. Why eminent domain is not utilized here in an overwhelmingly obvious use for it is once again because the political will does not exist/no one wants to offend the precious and sensitive billionaire Dolan.
You mean the one that I linked to just above? As noted, it’s pretty much written through the eyes of Vishaan Chakrabarti, who has been stumping for his own “replace Penn Station with a skylight made from the shell of MSG” plan for years now, so multiple grains of salt apply.
Yes, Dolan’s lobbying is a problem. But the main problem here is less political will than that back in the 1960s the city allowed its landmark train station to be torn down and replaced by a sports arena (before landmark laws existed, to be fair), and now there’s no way to undo it without somebody spending a whole lot of money, and Dolan is determined not to be that somebody.
In my dreams I evict Dolan
(no permit no way!) take the building by eminent domain and I tell him to go share Barclay’s all while laughing hysterically! Then I wake screaming because the pitchfork wielding mob he hired to kill me is almost upon me. Sigh…..
If memory serves me correctly, MSG gets an overhaul pretty much every 20 years or so give or take and each time the overhaul is about the same as the cost of a new arena (the early 90s reno was like $200 million and the one 10 years ago was like a $1 billion. This is just off the top of my head, I didn’t bother googling it.) So given that track record about 10 years from now they would probably be gearing up for another renovation.
So then wouldn’t $800 million from the state to move close a big chunk of the gap between overhauling and building new?
On the same site, maybe. But then you need to find the money to buy land. (Or give city-controlled land to Dolan for free, which comes to the same thing.)
In any case, “maybe we can get out of this by only spending $800m” is maybe not the best framing for this.
I guess it comes down to how big is what is the incremental cost of a new arena vs what he would already spend on renovation. Barclays cost $1 billion at the same time as the MSG spent $1 billion renovating.
$800 million in today would have been about $583 million in 2010, so would a $583 million check have been enough to persuade Dolan to build elsewhere? Also, if it wasn’t a sports facility just any old building on that spot would $583 million have been fair market value to get someone to leave in order for the government to be able to build whatever they want to build?
I look at it as more of an eminent domain case than a sports subsidy.
Does Dolan pay for renovations?
I find that hard to believe…..
Again, flogging the dead horse of municipal government accountability… but in short:
Nobody needs to compensate Dolan for his own decision to spend $1bn (ish. I haven’t seen receipts. Have you?) renovating MSG ten years before his operating permit/capacity exemption expired.
That was a business decision he made. If he based it on something more concrete than a belief that the permit/exemption would be extended, I have to think that document or contract would have been made public by now.
If it exists, somebody should know about it.
Dolan could certainly sue the city (or the appropriate agency) for interfering in/disadvantaging his business. However, since his fixed term exemption had, as the name would suggest, a fixed term, I do not see how any rational person could claim he had a reasonable expectation that it would continue in perpetuity.
The fact that I jaywalk with great regularity and have never been arrested or ticketed for same does not make the law/bylaw invalid.
The most likely outcome of refusing to extend the exemption in the short term would be Dolan either continuing to operate under the new rules (while suing the city for $14 Trillion and a new pony) or trying to get an injunction to allow him to ignore the new capacity limits (which he might, temporarily, get). If he does not get the injunction then he might just ignore the new rules, which puts the ball back in the city’s court (and gives them the tools to enforce their own rule as applied to MSG).
In any case, this action would put the onus back on Dolan and MSG – which sought and received the temporary exemption in the first place. Exactly where it should be.
He is NOT getting a new pony!
The rest, who knows?
“If he based it on something more concrete than a belief that the permit/exemption would be extended, I have to think that document or contract would have been made public by now.”
When Dolan had completed his most recent remodel of MSG, Andrew Cuomo was NY governor, Sheldon Silver was speaker of the NY State Assembly, and they both fit, nice and comfy, in Dolan’s back pocket.
He would have been happy to produce them for you to examine, if you so desired, as the only documentation he felt he would ever need to keep MSG over Penn Station into perpetuity.
Today, Cuomo and Silver are gone and Dolan’s back pocket is empty
I take your point. I doubt Dolan’s ‘back pocket’ is completely empty however.
For all we know, the only reason he invested $1bn in garden renos is to create the appearance of leverage over future permit extensions/renewals.
You don’t actually have to have leverage to make worried politicians fearful of the next election cycle think that you do.
Its not so much paying him because he spent $1 billion renovating the arena. At some point they will be due to do another renovation and if history is any guide it would be 10 years from now give or take. So at that point it may make sense for everyone if the city/state kicked in some money that would at least in part bridge the gap between another renovation and a new arena.
We had a situation in the Toronto area where a mosque was raising money to expand, but the government wanted to build a transit hub on that spot, so they cut them a check to have them move down the street and build a new facility there.
Now I know that for 95% of the regular readers of this site the attitude is “not one single dime for sports” but this is similar to that case then a regular sports subsidy.
Dolan should take the $800 million gift. When his permit expires it will be illegal for him to have 18,000 in the building.
I would love to see the city stand firm and not give him the permit.
Me too. Although I’ve been flogging that particular dead horse for some time (both with respect to Dolan and Oakland. Municipal gov’ts need to find a set and use them.
Then again, as the old (and hugely politically incorrect) saying goes, “if my aunt had b___s, she’d be my uncle”.
Well, after spending 20 minutes in the Crain’s rabbit hole of trying to sign up for the free newsletter, uh, which it insists I must be a paid print subscriber to access (that to me is not free) I will let democracy die in hunger this one time because Crain are real estate scum and they lied to me!
That’s all it takes with me. Um, what was my original point?