Finally and Officially: Full City Council Gives MSG Its Shortest Permit Ever at 5 Years

The vote by the full committee of the City Council was unanimous and totally expected after the land use and franchise sub committees had unanimously recommended a five year term for the special permit that Madison Square Garden needs to allow it to continue to sit atop Penn Station.

| 14 Sep 2023 | 10:26

Saying it was starting a countdown to force a deal on improving Penn Station, the City Council voted unanimously to give Madison Square Garden the shortest operating permit, five years, in its history.

“By granting Madison Square Garden a five-year special permit, we are setting a clock that will help bring all the stakeholders to the table to fix Penn Station now,” said the neighborhood’s council member, Erik Bottcher, who had fought off demands from The Garden and others for a longer extension. “I’m glad Madison Square Garden will be held to some level of accountability,” said another Council member, Charles Barron of Brooklyn.

Hanging over the strong words and unanimous action, however, was the history of the last time the council acted, ten years ago. At that time, The Council told the Garden it had ten more years to operate in its present location and needed to move by 2023.That never happened and the railroads who use Penn station say that the Garden in its present configuration has become “incompatible” with the safe and comfortable operation of the station.

“For the first time in decades,” Bottcher said, “we have the opportunity to truly create a great Penn Station. That opportunity is here. We can not afford to wait any longer. The time for action is now.”

But exactly how that action will happen, and who will drive it, is a major question. The station is owned by Amtrak, but Amtrak and New Jersey Transit have put the MTA in charge of the planning for a new station (While at the same time Amtrak is overseeing the construction of a new tunnel under the Hudson that will bring Amtrak and New Jersey Transit Trains to what may need to be an expanded Penn Station).The MTA’s command of the project has been under pressure. A private developer, ASTM, has asked for a bidding process in which it could compete to be named Master Developer, and implement its $6 billion redevelopment plan that includes a grand train hall entrance on Eight Avenue. The MTA says it has its own design process underway, with an estimated price tag of $7.1 billion and will look at ASTM’s ideas as part of that. But local legislators have begun rallying around the ASTM design ideas and this week held a news conference to demand that Governor Hochul conduct an open bidding process, although not necessarily the same bidding process ASTM is asking for. Janno Lieber, the chair of the MTA, crashed the news conference to emphasize that everyone shares the goal of an improved Penn Station and announce that the MTA will begin its own public review process shortly. A key issue is the property rights of MSG, which bought the site from street level up from the ailing Pennsylvania Railroad in the 1960’s. ASTM has said it would pay MSG $450 million from privately raised capital for property needed to renovate the station. The MTA, on the other hand, says MSG should contribute property needed for the renovations on the grounds that it benefits enormously from its location above the station, the busiest in North America with an estimated 600,000 daily riders.

A number of neighborhood and civic groups say both are wrong and the proper solution is to move the Garden and build a new, above ground station. Some hope that the five-year clock will cause the Garden, one of the oldest major arenas in the country, to look anew at this idea.

Which brings into play the major tax exemption the Garden has received from New York State since the 1980’s, when it threatened to move its teams, the New York Knicks and New York Rangers, out of the city. That exemption from city property taxes is valued at an estimated $40-million a year.

“In addition to this five-year permit–I’m glad its not ten–we need to call on the state to make sure they pay their fair share of taxes,” council member Barron said before voting to approve the five year permit.

“Because in this trying time, when you need money for migrants, you need money for those of us, our people, who are in shelters now. Madison square Garden and many other places, they need to pay their fair share of taxes.”

After the council vote, Madison Square Garden Entertainment, which owns the Garden, said through a spokesman, “As invested members of our community, we are committed to improving Penn Station and the surrounding area, and we continue to cdollab orate closely with a wide range of stakeholders to advance this shared goal.”

“For the first time in decades, we have the opportunity to truly create a great Penn Station. That opportunity is here. We can not afford to wait any longer.” Erik Bottcher, NYC Council Member