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Mar 07, 2024

MSG spent 500K lobbying as it pursued operating permit, records say

Madison Square Garden has spent about $500,000 lobbying in New York City over the past two years as it pursues a new operating permit for its location atop Penn Station, according to city records,

Madison Square Garden has spent about $500,000 lobbying in New York City over the past two years as it pursues a new operating permit for its location atop Penn Station, according to city records, even as results have come up short of the arena’s expectations.

MSG, sometimes called the Mecca of Basketball, may not quite be the Mecca of Lobbying. It did not rank as one of the top 10 lobbying spenders in New York City last year, according to the city clerk’s office.

But MSG Entertainment’s lobbying over the last 20 months was still significant and targeted officials spanning the City Council, the mayor’s office and the Manhattan borough president’s office, according to the city clerk’s office.

“For lobbying a city agency for a permit, $500,000 is a large amount,” Craig Holman, an expert on lobbying with the Washington watchdog Public Citizen, said in a text. “But there is a great deal at stake for Madison Square Garden.”

The Garden has been shooting for at least a 10-year operating permit. But it scored only a five-year agreement from City Council members in preliminary votes Monday on the future of the Knicks’ and Rangers’ home.

The votes set the stage for the half-century-old arena, owned by James Dolan, to receive its shortest operating permit ever.

MSG Entertainment — which also owns Radio City Music Hall, the Beacon Theatre and the Chicago Theatre — generated roughly $850 million in revenue in the 2023 fiscal year. It projects its revenue to reach $900 million in the next fiscal year. This is on top of a yearly $43 million tax break it’s received since 1982.

Critics say the Garden’s time perched above the dingy, low-ceilinged Penn Station should be limited. They view the Midtown arena as an albatross around the neck of North America’s busiest train station.

Others see MSG, branded as the World’s Most Famous Arena, as an indispensable piece of New York’s sporting and cultural history.

A full overhaul of Penn Station does not appear possible without moving the 820,000-square-foot coliseum above it. The Metropolitan Transportation Authority has said the overcrowded, much-maligned station and the arena are no longer compatible.

But the Garden underwent a $1 billion renovation a decade ago that underscored Dolan’s efforts to keep his sports teams at the intersection of 31st St. and Seventh Ave., and the challenge before opponents who seek to push the teams out.

Still, Monday’s permitting votes seemed to signal the 20,000-seat arena’s days could be numbered.

Councilman Erik Bottcher, the Democrat who represents the area around the Garden, told reporters on Monday that a five-year permit for the arena would provide time to “come up with a lasting solution for Penn Station” and “set a clock to help get everyone to the table.”

Bottcher, a target of the Garden’s lobbying, added that “the ideal scenario would be for Madison Square Garden to relocate.”

MSG responded with dismay.

“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 feisty statement.

The statement asserted that the committees had done “a grave disservice to New Yorkers today, in a shortsighted move that will further contribute to the erosion of the city.”

The Garden did not provide additional comment on its lobbying efforts for this story.

In addition to Council members and the mayor’s office, targets of the city’s lobbying included the city Planning Department, the Transportation Department and the local community board (which has urged an even shorter permit than the Council committees).

One quite powerful New Yorker seemed to take the arena’s side: Mayor Adams. The mayor, who was not named in records as a direct target of the lobbying, had said in the past that the city would drive a hard bargain on granting a new permit, and had also expressed openness to moving the arena.

But Adams, a Democrat, said Tuesday that he felt MSG should have received a decadelong permit.

“I thought MSG should have received 10 years,” Adams said at a City Hall news conference. But he added: “I respect the decision by the Council.”

The full Council is expected to issue a final vote on the permit request on Sept. 14.

Some organizations spent far more than the Garden lobbying in the city last year, according to city clerk’s office records.

The landlord-backed Homeowners for an Affordable New York spent some $1.4 million as it opposed so-called good cause eviction legislation in 2022, the clerk’s office reported.

State Sen. Brian Kavanagh, a lower Manhattan Democrat who has been separately lobbied over his efforts to end the MSG tax break, said the Garden’s lobbyists are “very organized” but not unusually aggressive.

Manhattan Borough President Mark Levine’s office, which was targeted by MSG in its permit lobbying efforts, said in a statement that Levine “appreciated the outreach.”

“While Madison Square Garden has expressed disappointment with the result of their lobbying efforts, the truth is we now all have to come to the table,” said the statement, “and once and for all work out a way to create a great Penn Station.”

With Téa Kvetenadze