Loose Ends: When the Full Council Finally OKs 5-yr Permit for MSG, What’s Next?

The recent unanimous vote by the franchise and land use subcommittees of the City Council to only renew Madison Square Garden’s operating permit for five more years means that the full City Council is almost certain to approve that term when it votes Sept. 14. But comes next as stakeholders jockey in the compressed time frame?

| 10 Sep 2023 | 05:31

The City Council is resetting the clock on the interlinked futures of Madison Square Garden and Penn Station. But virtually every other question about that future–from whether the Garden stays or moves to whether train operations can be modernized to avoid expanding the station–remains unsettled. The Council, in a vote set for this Thursday (September 14), is expected to confirm the unanimous decision of its land use committee to grant Madison Square Garden a new, five year permit to operate its 20,000 seat arena, said to be the world’s most famous, above what clearly is the nation’s busiest train station. A last minute fight over that extension did smoke out some new and counter-intuitive positions from key players. Notably, The MTA, which has had a contentious relationship with The Garden, supported a longer operating permit for The Garden then the five years MSG is ultimately getting. MTA officials argued for this longer permit by saying The Garden would then be willing to cede property to rebuild Penn Station that publicly the Garden has demanded “fairmarket” value for. These positions emerged from last minute, and up to now unreported, negotiations between The Garden and The MTA, which is leading plans for the reconstruction of Penn station on behalf of the railroads that use it, Amtrak, which is the actual owner, New Jersey Transit and the MTA’s Long Island Railroad. As part of these last minute negotiations the MTA lobbied hard and won the support of City Council Speaker Adrienne Adams, for the longer duration of ten years for the Garden’s operating permit. But Erik Bottcher, the council member representing the neighborhood around the Garden and Penn Station, opposed the ten-year duration and prevailed with his council colleagues to limit the new permit to five years. That, Bottcher said, is an appropriate time frame for resolving the real issue, which is rebuilding a better, safer Penn Station and deciding whether that can be done with The Garden in place. The MTA and the other railroads had set the tone for this conversation by saying the Garden in its present configuration was “incompatible” with Penn Station, sixty years after it was first built on top of the station. A number of advocates say the only real solution to this is to move The Garden. They argue, in particular, that, moving the Garden is the only way to create not just a better train hall for passengers but a better platform level design of the station, without the columns holding up the Garden. Less cluttered platforms would be an essential element of a new way of operating the commuter railroads, known as “through running,” in which the currently separate operations of the Long Island Rail Road and New Jersey Transit would be unified some way. This, in turn, might eliminate the need to expand the station when a second tunnel under the Hudson River is built in the years ahead, advocates argue. The former head of the Transit Authority, Andy Byford, who now works for Amtrak, has urged this approach, but Amtrak itself and the other railroads say only that they are examining this alternative and don’t yet have a conclusion. In the meantime, both the MTA and a private developer, ASTM, have offered plans for a better train hall without moving the Garden.

The MTA has said the Garden can fix the situation by turning over some of its current property, including a derelict taxiway between 31st and 33rd Streets, for a renovation that would open up the eastern edge of MSG to a large, glass covered train hall.

Publicly the Garden has fiercely opposed that demand from the MTA, saying it deserves to be paid at fair market value. The question raised by the MTA lobbying at the council is whether the Garden has signaled privately it was willing to make such a deal. Neither the MTA nor the Garden would answer that question. But the answer may have a lot to do with how things proceed from here. ASTM, an Italian infrastructure developer, argued that the failure of the MTA to convince the Council to enforce its property demand is evidence that the ASTM’s own plan, which includes paying the Garden $450 million for Garden owned property, is “the last plan left standing,” as an ASTM architectput it.ASTM officials initially said they had “an agreement” with MSG on this purchase, but later rescinded that word and said it was better described as a clear understanding after extensive conversation. But what if the MTA, despite the public dissonance, actually also had an understanding with the Garden based on extensive conversations? Those conversations apparently took place in the hours before The City Council committee action, although they failed to produce an agreement solid enough to convince Bottcher and his Council colleagues to agree to the ten-year permit. So in the end all that has been decided is the time frame for deciding what to do: five years. Which does not mean nothing has happened. Kenneth Fisher, a veteran land use attorney, says everyone is regrouping now but the landscape has clearly shifted. Notably, Governor Kathy Hochul has said she is no longer depending on her predecessor’s vast redevelopment plan to throw off revenue to help pay for the Penn Station renovation. That plan called for up to ten new office towers, something the areas main property owner, Vorando Realty Trust, says it is not prepared to proceed with at a time of high interest rates and surplus office space.

“It took the perfect storm to wash away the Cuomo plan but its finally gone,” said Fisher, who represents a principal advocate for moving The Garden, the Grand Penn Community Alliance. “He resigned. Vornado confesses there’s no demand for new office towers. Hochul gets freed to walk away. The MTA says publicly that having the Garden on top of Penn is not only an operational nightmare, but an actual public safety problem.

“Then Andy Byford, the most respected transit expert in the country, says that if you move the Garden it would allow transformation of the regional transportation. The upshot is the City Council calling a time out to come up with something new.” What that something new will be seems heavily dependent on who steps up to lead the search now. Governor Hochul? MSG’s head, James Dolan? The MTA or Amtrak? Or even Vornado, seeking a new use, like a new Madison Square Garden, for property once slated for office towers?

New York, as a wise New Yorker once said, will be a great place if they ever get it finished.