Back in the early 1980s, Madison Square Garden was thinking of moving its hockey and basketball teams — the Rangers and the Knicks — out of New York.
A still-financially struggling city was anxious to keep the teams here. So in April 1982, New York City officials negotiated a deal with the Garden’s owners that included a property-tax exemption now worth about $17 million a year. Now the city is in better shape, and the Garden is highly profitable. This being New York, our politicos see a cash cow all ready for the milking.
That explains last week’s 43-to-5 vote in the City Council to revoke the Garden’s tax exemption. While they think they are making a stand for fairness, in fact they are reminding people why New York has such a bad reputation as a place to do business.
The Garden has been a good corporate citizen. It provides jobs for thousands of workers. It is a cultural as well as business icon that pays millions in other taxes and brings millions of people to the city. And the reason the tax break is getting bigger is because the Garden has invested $1 billion to upgrade and improve its property, so it is worth more.
Common sense suggests this is exactly what this city needs: owners who invest in their property. Instead, the Garden finds itself the object of high-handed dealings by politicians with other agendas.
Last year, they denied the Garden the lifetime permit almost every other arena enjoys, in an effort to buy activists time to evict the Garden off its own property. The goal there was to make way for a new Penn Station, for which there isn’t even a viable plan. Now the City Council is trying claw back a tax deal it freely reached with the Garden when it wanted it to stay.
Don’t get us wrong: We oppose special tax breaks in principle, and believe New York would do better to attract people with a better business environment. But we also recognize that the first principle for a business-friendly city ought to be to make clear you don’t renege on the deals you make.