Category: New York Rangers

It’s been a long, long road, but with just three weeks to go before Madison Square Garden’s operating permit expires and the New York Knicks and Rangers face being locked out of their home arena (not actually going to happen, but fun to imagine nonetheless), there’s a proposal afoot for the city council to set conditions on its renewal. And they’re pretty conditional conditions:

Madison Square Garden would be allowed to sit atop Penn Station for another 10 years under a proposal laid out by city officials on Monday…

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 there was a community board meeting in Manhattan last Wednesday about Madison Square Garden’s expiring operating permit, and someone asked whether the Garden couldn’t move across the street to the current site of the Hotel Pennsylvania, and an MSG official didn’t say no exactly:

[Executive Vice President Joel] Fisher, trying to reframe the discussion, said renewing the permit would not preclude an eventual move. A suggestion raised earlier in the meeting—that the Garden could move right across Seventh Avenue—“probably would satisfy us,” he said.

“That would satisfy being right on top of a transportation hub,” he said, though he added that such a proposal would need to account for the costs of construction.

All the people who are excited about getting Madison Square Garden off of its current site so the city can either rebuild the great lost Penn Station or build something new and ugly were very excited about this, since it’s the first time anyone with the New York Knicks and Rangers parent company has hinted at being willing to move. But that is a huge friggin’ caveat there at the end: “the costs of construction” could be mammoth. (If you watch the linked video, Fisher actually says, “Ultimately, who’s going to pay for that? Where is the money?”) This is especially true considering owner James Dolan would want a state-of-the-art building, plus land in midtown Manhattan is super-expensive even if nobody wants to eat lunch there.

How much exactly is impossible to say. The state Empire State Development agency estimated in June 2021 that building a new Garden would cost $8.6 billion, but the math was, shall we say, not the most robust:

And the footnotes:

So we have: the cost of a new arena based on the price tag for the weird concert theater thing with an invisibility cloak that MSG is building in Las Vegas; the cost of acquiring two full blocks of land (not all of which would be needed for an arena; MSG coexists on its current two-block plot with a large office building); the cost of buying the existing Garden (which is double-counting, since there’s no reason for the public to buy the teams’ current home and pay for a new one); and the cost of building a new Penn Station, which is not part of the price tag for an arena no matter how you slice it. It does, however, create an impressively high figure, which is what ESD was looking for in a document arguing for keeping the arena where it is.

But even if we reduce the projected cost to something more reasonable — say, the $1.15 billion current MSG valuation for an arena, plus $2 billion for the land that would be need to build it on — that’s still an impressively high figure given that Fisher clearly indicated he’d want the public to pay for it. While many people who either use Penn Station or just wish they could travel back to the glory days of New York City architecture would love to see the old station rebuilt, $3 billion and change just to clear away the arena (which, it’s worth noting, has now been around longer than the original Penn Station was) would be an awfully high price to pay.

What we’re seeing here is a couple of simultaneous games of chicken: New York City, which has that expiring operating permit hanging over Dolan’s head, is hoping to use it as leverage to get him to move MSG; and Dolan, who knows the city wants him to move, is hoping to use that as leverage to get a brand-new arena — or, if that fails, to get the city to balk at the price tag and grant him a perpetual permit on his existing one. (There’s also the separate question of Dolan’s perpetual property tax exemption, but that’s in the hands of the state legislature to deal with, no chicken necessary.) Historically, this has ended with the city council kicking the can down the road by extending the permit for another decade or so, and we’re likely to see at least one more extension by the time the permit expires this July. But there’s a significantly non-zero chance that Dolan will be able to use frustrations over the suckiness of Penn Station to wheedle his way into some kind of massive taxpayer concessions, and that’s worth keeping an eye on.