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Politics
New York

Council to limit MSG’s special permit to 5 years

James Dolan’s arena sought permanent residency atop Penn Station

City Council Renews Madison Square Garden Permit

From left: New York City Council Member Rafael Salamanca, Madison Square Garden owner James Dolan, and New York City Council Member Kevin Riley (Photo Illustration by Steven Dilakian for The Real Deal with Getty)

Madison Square Garden can stay put, but not necessarily for long. 

City Council committees on Monday voted to limit the arena’s special permit to five years. The local member, Erik Bottcher, said the body could not do more because it “cannot determine the long-term viability” of the arena at its location over Penn Station.

The votes and Bottcher’s comment all but guarantees that the full Council will follow suit. The arena’s owner, James Dolan’s MSG Entertainment, wanted a permanent extension of the operating permit, which expires this year.

The new permit is not only limited in length but contingent on the creation of a transportation management plan to address “use conflicts” related to the arena’s loading operations on West 31st Street and pedestrian access. These have been key sources of tension between the arena and the rail agencies that use Penn Station.

Dolan requested a permanent permit to keep operating as a 22,000-seat venue.

“A short-term special permit is not in anyone’s best interest and undermines the ability to immediately revamp Penn Station and the surrounding area,” MSG Entertainment said in a statement.

The company called the action a “grave disservice to New Yorkers … that will further contribute to the erosion of the city.”

The Adams administration had suggested 10 years, the same extension granted in 2013. Some elected officials had pushed for a maximum of three years, hoping to force the arena to relocate or make considerable concessions to the rail agencies.

Monday’s vote sends the matter back to the City Planning Commission, which had proposed a 10-year permit, before heading to a full Council vote. Those are formalities now.

Elected officials hope a shorter timeline will pressure the arena to reach a deal with the rail agencies or find a new home. MSG has indicated that it has no plans to relocate.

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“I still believe that ultimately, we would be able to build the most extraordinary train station if Madison Square Garden was not there,” Bottcher said in an interview.  “I’m still hopeful that would happen some day, but in the immediate term there are plans under consideration that would permit us to have a very extraordinary Penn Station with Madison Square Garden in place.‘’

“I believe this term strikes the right balance between long and short,” he added. “It’s short enough to keep the pressure on, but enough time to do something meaningful.”

City zoning requires a special permit for any arena with more than 2,500 seats, meaning the arena will once again need to go through the land use review process after its five years are up.

The arena’s future is tied to the planned overhaul of Penn Station. Both affect the property values and development opportunities in the surrounding area and have played key roles in visions for Vornado Realty Trust’s Penn District.

For now, state officials are focused on a $7 billion renovation of the station and have shelved a broader redevelopment plan for the area. Competing proposals have emerged, including one that would keep the Garden in place but would require the demolition of its Hulu Theater.

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City Planning stipulated that once plans for the Penn Station redesign are 30 percent complete, MSG must return to the city and prove that the arena is compatible with those plans. That appears to have been left out of the City Council’s approval.

ASTM North America thinks that will play in its favor because it has pitched an alternative and has been working to reach an agreement with MSG to acquire property needed for it.

The issue has loomed large in these negotiations. MTA, Amtrak and NJ Transit argue that the arena’s loading operations are “incompatible” with plans to renovate Penn Station. To be compatible, the arena “must agree to collaborate on property swaps,” including its interest in a defunct taxiway on Eighth Avenue, according to a letter submitted to City Planning by the rail agencies in June.

The arena’s owner has countered that the rail agencies’ plans for Penn do not work. It favors the ASTM proposal.

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BreakingJames DolanMadison Square GardenPenn StationVornado Realty Trust