Commission: Extend Madison Square Garden permit for 10 years, wants cooperation with Penn rehab

Madison Square Garden would be allowed to stay put for another decade but would need to collaborate with the MTA, Amtrak and New Jersey Transit to improve Penn Station, the New York City planning department said this week.

Like all venues in the city, the Garden requires a special permit to operate with a crowd of over 2,500 people. That permit is expiring this month.

To meet the conditions of the special permit, the planning commission said MSG has committed to public improvements including more seating, glass canopies, new signage, lighting and an updated traffic plan, including eliminating trucks from 33rd Street, said Daniel Garodnick, the planning department’s director, at a meeting this week.

Garodnick also said the Garden, which sits above Penn, has also committed “to collaborate with Amtrak, the MTA, and New Jersey Transit as plans for the reconstruction of Penn Station come together — whatever those ultimately plans look like."

“New Yorkers cannot wait for those plans for Penn Station to be finalized in order to benefit from these significant improvements to the area around MSG,” he said.

“We won’t just take them at their word: we are requiring MSG to come back to the Commission once those plans are 30% complete to ensure that the arena remains appropriately compatible,” he said of Penn Station plans.

An MSG spokesperson, who spoke on condition that a name isn’t used, said: “We appreciate the recommendation from the City Planning Commission and look forward to collaborating with all key stakeholders on improving Penn Station.”

The Metropolitan Transportation Authority, which is looking to advance an $8 billion reconstruction of Penn Station, has argued that MSG, in its current form, is “not compatible” with the transit facility.

In a statement sent by the MTA press office, spokesman John J. McCarthy said: “We are pleased that the City Planning Commission is recommending that MSG be required to work with the MTA and other transit agencies to ensure that the arena become compatible with a world-class Penn Station."

MSG has said that the MTA's proposed reconstruction of Penn would force the New York Rangers out of Madison Square Garden for at least a year.

The city's announcement came the day before a report by the city’s fiscal watchdog finding that the Garden’s decades-old deal to avoid having to pay property taxes has cost New York City almost $1 billion since 1982 and is out of sync with the city’s economic development philosophy.

The tax break, which is in perpetuity, was enshrined under state law when there were fears that the Garden would move the Knicks and Rangers out of state. But that is “unlikely” now to be the determining factor for whether the teams stay, according to the agency, the Independent Budget Office.

It found that the tax exemption — unique in that it benefits a singular, for-profit business entity — is worth $42.4 million annually and totals over $946.7 million in inflation-adjusted dollars.

The report also noted that MSG is not required to report data like jobs created or wages paid "making it … impossible to evaluate the impact that the expenditure has had on MSG as an employer.”

And it “does not align with stated city economic development policy which focuses on economic development in Upper Manhattan and boroughs outside of Manhattan,” versus “an entertainment facility located in a preeminent Midtown Manhattan,” according to the report. 

The MSG spokesperson criticized the findings.

“This report is slanted, clearly politically motivated and unfairly singles out Madison Square Garden," according to a statement.

In response, budget office spokeswoman Rachaele Raynoff said that the agency “is mandated by local law to conduct studies of specific economic development tax expenditures identified by City Council.” 

It’s difficult to compare each venue’s subsidy to one another.

A report released in March by the watchdog found that while other venues benefit from government-sponsored benefits, including Barclays Center in Brooklyn, Citi Field in Queens and Yankees Stadium in the Bronx, MSG’s benefits are in perpetuity and were put into place year after construction was done. The other three are all tied to the life of the bonds and went into effect timed with the construction of the stadiums. The three got tax-exempt bonds; MSG was privately financed.

By Matthew Chayes

matthew.chayes@newsday.comchayesmatthew

Matthew Chayes, a Newsday reporter since 2007, covers New York City.