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NYC to Madison Square Garden: You have a decade to find a new home

The problem with not owning the land under your home: New York City has given the owners of Madison Square Garden a decade to find a new home if a new Penn Station is built.

Here’s the deal: Madison Square Garden operates under a special use permit, as it’s built atop Penn Station. At the time of the arena’s opening in 1968, it was a revolutionary land use to combine the train station with the arena. And while the Madison Square Garden has aged pretty well considering its age (a $968 million overhaul didn’t hurt, either), the current arrangement isn’t sustainable: New York City officials want to see a new Penn Station, and they probably wouldn’t mind seeing the arena moving somewhere out of the core of Manhattan.

Hence the decision by the New York City Council to extend the special use permit for a decade. MSG had asked for an extension in perpetuity, and the Bloomberg administration had requested a 15-year extension.

From The New York Times:

James L. Dolan, who controls the Garden, the Knicks and the Rangers, offered a low-key response to the news that barely acknowledged the 10-year deadline. Mr. Dolan expects to complete this fall a $968 million overhaul of the Garden, which has been closing in its off-seasons to accommodate the work.

“Madison Square Garden has operated at its current site for generations, and has been proud to bring New Yorkers some of the greatest and most iconic moments in sports and entertainment,” Mr. Dolan’s company said in a statement issued Wednesday afternoon. “We now look forward to the reopening of the arena in the fall of 2013.”

Mr. Dolan announced the latest renovation of the Garden in 2008, just after the last $14 billion effort to move the Garden and transform the train station collapsed amid a severe recession, insufficient financing, an absence of political leadership and overreaching by the developers selected for the job.

Whether the deadline will hold remains to be seen. It’s probably easier to build a new arena than to move a train station, but after MSG spent almost a billion dollars on an arena renovation, and market-driven solutions to Penn Station remain elusive, to say the least. Madison Square Garden is an iconic name in New York City, and it seems likely the city will find a way to keep the arena in a prominent location and come up with a new train station as well.