New York businesses would be wise to stay tuned to Madison Square Garden’s attempt to renew its “special permit” to operate an arena. Should a group of activists and politicians succeed in exploiting this process to push their own, unrelated agenda, companies throughout the city should prepare for a new reality — one where any expectation of fair and consistent treatment is a thing of the past.
MSG began the renewal process this past fall; in keeping with current practice, where the City Planning Commission grants virtually all permits without term limits, we requested that our special permit be granted without an expiration date.
Given that the Garden meets all requirements for the permit and that no other sports team or stadium in the city has a time limit for its use — not to mention that there is no legal basis for imposing a term — we had every expectation that we’d be treated like any other applicant and that the permit would be approved.
Instead, outside groups — still angry about the 50-year old decision to tear down the original Penn Station — have hijacked the process, insisting on an arbitrary term limit (current talk is of 15 years) on the permit. Their stated goal is to force the Garden to “find a new home” so that Penn Station can be restored.
Facts are stubborn things, however. MSG owns the land and the building, where it has been operating for 45 years as a sports and entertainment complex. Not only can we not be forced to move, but we’d still have the right, even if there was no arena, to build an office tower, with no obligation to free up space for Penn Station.
Equally false is the idea that the Garden’s departure would result in a new Penn Station. The creation of Moynihan Station has been a 20-year discussion, with very little progress or funding to show for it. MSG spent millions of dollars and almost three years exploring a move to the Farley Building as part of the new vision for Moynihan Station — only to watch the plan collapse for a number of reasons unrelated to us.
Even if there were a feasible plan to improve Penn Station, it would need massive funding — in excess of $1 billion, not including the billions more that would be needed to compensate MSG for its property and the building of a new arena.
The claim that MSG would never leave the site if granted the permit in perpetuity is also untrue. Just as we considered moving to Farley, MSG would explore a move to another location at any point if it makes business sense, regardless of the permit.
The Garden is a vital economic driver for the city, spending almost $900 million a year on operations and administration. The arena also employs nearly 6,000 full-time, part-time, seasonal and per-diem employees and works with 27 unions. It is perennially one of the country’s busiest arenas, with 400 events attracting 4 million people each year.
And today, we’re in the midst of a $1 billion, self-funded, top-to-bottom transformation that will ensure the Garden remains a world-class destination. Once finished, the project will have created as many as 3,700 union construction jobs.
To invest and make long-term business commitments that generate economic activity, businesses need fairness and predictability in their regulatory environment in order. Gratuitous uncertainty discourages the very investments and planning that today’s competitive environment demands.
The public review of Madison Square Garden’s permit application is ongoing; it’s critical that the facts, basic fairness and the law begin to guide this process. If special interests are successful in manipulating the public-review process to push an unrelated agenda, it will set a dangerous precedent that could undermine the confidence that the public, property owners and city businesses have a right to expect.
Joel Fisher is executive vice president of Sports and Arena Transformation at the Madison Square Garden Co.