Madison Square Garden’s Permit Is Expiring — but Cancellation Is a Long Shot
Here’s what would actually happen if the City Council pulls the plug on the arena NYC loves to hate.
On Wednesday, Manhattan Community Board 5 will hold a committee hearing on the proposed renewal of Madison Square Garden’s operating permit — the first stop in a review procedure that will culminate in a City Council vote.
MSG Entertainment Corp. has requested a permanent renewal after its current 10-year permit expires this summer. An array of local residents and property owners are demanding the city pull the plug, arguing that the 20,000-seat arena, located atop subterranean Penn Station, needs to move.
City Councilmember Erik Bottcher, a Democrat representing the area, suggests the arena may be a better fit for the yet-to-be-developed west portion of Hudson Yards by the river.
But MSG is hardly down for the count. That’s because uprooting the Garden isn’t as simple as yanking the permit. For starters, say real estate lawyers, the arena’s owners — a company controlled by the Dolan family, which also owns the Knicks and Rangers teams — would be due a financial payout.
Yet the sense of urgency among those who want Madison Square Garden to move has only grown as Gov. Kathy Hochul has pushed a plan to improve Penn Station. It includes expanding development in the surrounding neighborhood — but leaves MSG conspicuously untouched.
Community Board 5 Land Use Committee Chair Layla Law-Gisiko conveyed in an interview with THE CITY that there are no easy answers — and stressed that the time has come to change the game.
“We’re going to have to find a solution, a permanent solution to all these problems. No one wants the Garden to go dark,” Law-Gisiko said. “And at the same time, no one wants Penn Station to remain a rathole. And, I have a little bit of a hard time that it’s either-or, and I will not entertain this idea.”
MSG is expected to present its case to the board’s land use committee in a Zoom hearing on Wednesday, she said.
What Would Happen?
If the permit expires, the games and shows could go on — but without much of an audience. The special permit, which expires July 24, allows the Garden to hold more than 2,500 spectators. However, the city would likely allow the Garden to continue operations without interruption while the venue goes through the review process.
Don’t count on MSG Entertainment CEO James Dolan to take that sitting down. “No other major stadium or arena in NYC has ever been required to obtain a special permit to operate, and the Company believes it is only appropriate for NYC’s special permit process to be fair and consistent,” MSG Entertainment said in a press release when it applied for a permit in perpetuity earlier this month.
Michael Rikon, an attorney whose law firm focuses on eminent domain — cases in which government takes or restricts private property — says said he agreed with MSG’s claim that it’s being singled out, given that MSG owns the property and has successfully operated it.
If the city denied the MSG permit, Rikon said, “Just compensation would be required. Because if they do not grant the special permit, the property becomes worthless. It can’t be used for its highest and best use.”
In 2021, the Empire State Development authority estimated that moving the Garden would cost the public $8.6 billion, including $5 billion to build a new arena.
Facial Recognition Furor
Madison Square Garden is facing attacks on two fronts.
For groups pushing ideas to rebuild Penn Station, the hulking structure needs to get out of the way. One plan from the Grand Penn Community Alliance, an advocacy group, would replace much of the block with green space.
MSG argued in its statement that the arena does not stand in the way of Penn Station improvements.
“As it relates to the Penn Station complex,” the statement reads, “Moynihan Station has been beautified on the west side of 8th Avenue and work has begun on substantially improving the east side of Penn Station. None of this work requires The Garden to move.”
Additionally, James Dolan has also been criticized after his company used facial-recognition technology to deny lawyers who are involved in pending lawsuits against MSG Entertainment from entering the Garden and Radio City Music Hall. Dolan defended the use of the technology and has butted heads with the State Liquor Authority, which is investigating MSG’s use of facial recognition.
Dolan, during an interview on Fox 5 last month, said he was not backing off using the technology, saying, “at Madison Square Garden, if you’re suing us, we just ask of you, please don’t come until you’re done with your argument with us.”
This isn’t the first time the Community Board and the City Council have sought to usher Madison Square Garden out of the neighborhood.
When it approved the 10-year special permit almost unanimously a decade ago — rebuffing MSG’s demand for a permanent permit — the City Council urged relocation and said 10 years would be plenty of time to relocate.
“This is the first step in finding a new home for Madison Square Garden and building a new Penn Station that is as great as New York and suitable for the 21st century,” said then-Council Speaker Christine Quinn, who represented the area.
Back in 2013, the Council ignored the City Planning Commission’s request for a 15-year permit. The Planning Commission argued that the time frame would allow it to reconsider the merits of the special permit. The commission’s report said the 15-year time frame would allow MSG to reach an agreement to relocate the arena or to provide for improvements to help people to enter the station, ease access for people with disabilities, and upgrade MSG’s truck loading.
With the Garden still in place, the Department of City Planning introduced a proposed zoning amendment earlier this month. The city’s version calls for improvements to public spaces around the arena, and improving the Garden’s loading operations to be compatible with Penn Station improvements.
“While the Commission understands it is fairly unusual to impose a term of years on special permits, the Commission believes … that this is a special circumstance where a term is warranted,” it declared back in 2013.
Seeking ‘The Best’
In its statement, MSG claimed “There have been no substantial conversations about moving The Garden since the City granted the last permit 10 years ago.”
Alexandros Washburn, executive director of the Grand Penn Community Alliance, which calls for MSG to relocate, said that 10 years was long enough for MSG to have found a new location and planned a new arena. The complaint of no progress is a “self-inflicted hardship,” he said.
Washburn, a city planner under former Mayor Mike Bloomberg, was among three architects who last month presented their visions for a better Penn Station, all three of which relied on MSG relocating. Around 100 people showed up for their presentation at the Great Hall in Cooper Union.
His organization has also been running social media ads against the state’s Penn Station project, with a focus on calling for MSG to move. Grand Penn Community Alliance spokesperson Wendell Jamieson said the group is supported by those who want a great train station, but did not identify any funders.
“It’s amazing just to see how the momentum has been building over the last few months. Who would have expected the Vornado thing to fall apart? Who would have expected facial recognition?” Washburn said. “But it kind of underlines and builds our case for us. We just want the best results, we want the best arena, the best train station.”