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At $5B, Replacing Madison Square Garden Doesn’t Seem Likely

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With the cost of a new Manhattan arena and a new Penn Station priced out at $5 billion, it doesn’t look like there will a fifth Madison Square Garden any time soon, according to real-estate experts.

The specter of a new arena has been raised in recent years by proponents of a new Penn Station. Their plan: a new above-ground Penn Station, with Madison Square Garden demolished and the old U.S. Postal Service’s Morgan Annex combined with the new train station. There is a tremendous symbolism here: the original Pennsylvania Station was torn down to make way for Madison Square Garden and some additional development, a demolition that helped create the preservation movement in New York City.

But that symbolism would come at a very high price: around $5 billion, according to a Rudin Center for Transportation Policy and Management report. Buying land for the new Penn Station would be $800 million, building a new Madison Square Garden would cost $1.6 billion, and building the train station would cost $2.5 billion. Add $65 million to demolish the existing Madison Square Garden, and you’re talking some real money. From the Commercial Observer:

“Well-intended civic groups are pursuing a dream that is unlikely to ever be fulfilled,” Mitchell Moss, the head of the Rudin Center, told CO. “The cost of moving MSG would require acquiring a new site…which would impose enormous costs on the public.”…

Construction costs generally are more standard for office and residential buildings than stadiums because the plans are generally uniform, according to one construction industry maven who added that the repetitive process makes it easier to build and set up cranes. Given that no two stadiums are alike, specialized contractors are required to build the unique designs.

Rising construction costs in general and special permits are contributing just as much to the price. MSG and most other Big Apple arenas also happen to be in dense parts of the city—making it difficult to install cranes, halt traffic and protect pedestrians, said Louis Coletti, the chief executive officer of the Building Trades Employers’ Association of New York City, an organization representing construction managers. In the case of the $1 billion renovation of MSG that finished in 2013, he added, project manager Turner Construction also had to work around hockey and basketball season, both of which run for six months or longer depending on whether the teams make the playoffs.

And, let’s not forget that there are three pro teams — New York Knicks (NBA), New York Rangers (NHL) and New York Liberty (WNBA) — playing out of Madison Square Garden these days. Add the many college games and tourneys, as well as big-name concerts, and you’d have a logistical nightmare in any replacement process.

Yes, there would be some level of poetic justice if a new Penn Station rose from the ashes of the original’s replacement. But Madison Square Garden has been the center of New York City sports since February 1968 — and with a $5-billion price tag, it doesn’t look like tearing it down will happen any time soon.

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