Madison Square Garden's future at center of Penn Station's $8 billion rebuild plan

The future of Long Islanders’ commutes and the “World’s Most Famous Arena” are intersecting in a growing debate over what role Madison Square Garden should play in the planned $8 billion reconstruction of Penn Station.

The question is expected to be at the center of a New York City Planning Commission public hearing Wednesday on whether the city should renew a soon-to-expire permit allowing MSG to operate at its current location, on top of Penn Station on Manhattan’s West Side.

A 50-year special permit with the city granted in 1963 — and then extended for 10 years — allowed MSG to hold events with more than 2,500 people at its current location. It expires next month. The New York City Council will decide this summer whether to further extend the agreement, which MSG wants to be made permanent.

The issue comes as the Metropolitan Transportation Authority — the Long Island Rail Road's parent organization — and New York State move ahead with plans for a major reconstruction of Penn Station. The MTA wants the city to leverage its permitting powers to get MSG to help fund improvements at the 113-year-old transit hub, which for more than 50 years has been relegated to Madison Square Garden’s basement.

A new proposal by Italian developer ASTM has further complicated the conversation. Rather than having Madison Square Garden help pay for fixes, it proposes buying the Theater at Madison Square Garden, formerly known as the Hulu Theater, and razing it so that a grand new entrance to Penn can be built on Eighth Avenue.

MTA capital construction chief Jamie Torres-Springer, at a meeting of the transit agency’s board on May 23, said that plan was flawed.

“We’re in a position where we are able to ask Madison Square Garden to help make improvements as part of Penn reconstruction,” Torres-Springer said. “That alternative proposal would do the opposite. It would pay Madison Square Garden something like a billion dollars for the use of that Hulu Theater, so we’re adding cost without much benefit.”

Putting additional pressure on MSG to contribute to the reconstruction plan, the MTA, along with Amtrak and New Jersey Transit, last week issued a report as part of the Garden’s permit application process concluding that the arena is “not compatible” with the planned renovation of Penn Station.

“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,” said the report. It concluded that to continue operating at its present location, the Garden must agree to several terms, including making contributions to the cost of Penn Station improvements “proportionate to their benefit to MSG.”

The MTA also wants the Garden to give up a taxiway and loading area under the arena to be transformed into a “train hall” with a 100-foot tall glass atrium.

Madison Square Garden officials declined to answer questions related to its potential role in the reconstruction of Penn Station. In a statement, they said, “as invested members of our community, we are deeply committed to improving Penn Station and the surrounding area, and we continue to collaborate closely with a wide range of stakeholders to advance this shared goal.”

The MTA’s push for Madison Square Garden to pay comes as it looks for ways to fund the Penn Station reconstruction effort, which Gov. Kathy Hochul has said could cost up to $8 billion.

The original proposal to help pay for the repairs through revenue generated by new office and residential towers around Penn “is not panning out at this time,” Hochul said last month. The MTA and the state are also hoping to secure federal infrastructure funding for the project.

While transit officials hope to exert enough pressure on MSG to get it on board with its plans for Penn Station, the compatibility issues acknowledged by the MTA are fueling calls from New York City preservationists for the Garden to be relocated altogether, so that Penn can be restored to its original early 20th century Beaux-Arts style.

“We believe that MSG is not compatible with Penn Station. And we believe if someone has to move, it has to be the Garden. We’re not moving Penn Station. The tracks are not going anywhere,” said Layla Law-Gisiko, a Community Board 5 member who plans to testify Wednesday. “Our assessment is that we need to find another venue for Madison Square Garden.”

MSG has balked at suggestions that it should pack up, in February issuing a statement saying that its “millions of fans and thousands of employees love and rely on our location and proximity to public transportation, and don’t want The Garden to move.”

Stopping short of opposing the relocation of MSG, Hochul and MTA leaders have said they favor a plan that would allow improvements to get underway at Penn Station as soon as possible, especially as the transit agency has plans to route Metro-North to the facility by 2027.

A possible compromise could be the ASTM plan, which has been pushed by the firm’s North American CEO, former MTA chairman and Nassau deputy county executive Patrick Foye. It would keep MSG at its current location, but capture additional space at Penn by creating a glass podium around the arena. Under the public-private partnership, the developers would help fund the improvements, and then manage the station for 50 years.

Hochul said the proposal is “one of many ideas being considered,” but noted that she is “working closely” with MTA chairman and CEO Janno Lieber to figure out a vision for Penn. Lieber has expressed his opposition to the ASTM plan.

Whatever plan is chosen, Samuel Chu, Suffolk County’s representative on the MTA Board, suggested that MSG should share in the burden of fixing Penn Station, if it is to share in the benefit of being so close to it.

“To modernize Penn Station properly requires working around Madison Square Garden. And I think Madison Square Garden should be invested in helping us overcome that,” Chu said. “I feel strongly that the ball is in MSG’s court to come forward and say, ‘Hey, what can we do to be a good neighbor here?’ ”

By Alfonso A. Castillo

alfonso.castillo@newsday.com@alfonsoreports

Alfonso Castillo has been reporting for Newsday since 1999 and covering the transportation beat since 2008. He grew up in the Bronx and Queens and now lives in Valley Stream with his wife and two sons.