(CelebrityAccess MediaWire) — Madison Square Garden is playing hardball with the city of New York, insisting on keeping the famed arena’s $11-million-per-year property tax exemption if it moves a block west into the renovated Farley Post Office.
City officials told the New York Daily News that there are no plans to continue the tax breaks if the Garden switches locations.
“Our assumption is that taxes will be paid,” Deputy Mayor Dan Doctoroff told the paper.
It is not surprising that the city is taking a hard line with MSG owner James Dolan, after Dolan led the successful effort to squash the West Side Stadium plans last year – one of Mayor Bloomberg’s top priorities in his first term.
Dolan has written a non-binding agreement with developers Related Cos. and Vornado Realty Trust to move the arena into the western end of the Farley building, which is being renovated into a $930 million transit hub. If the Garden follows through with the move, the current building atop Penn Station would be demolished to make room for glass and steel skyscrapers.
Related Chairman Stephen Ross defended the tax break to the paper, arguing that the new high-rises built in the former MSG location would create new taxes and make up for lost revenues.
“The Madison Square Garden tax issue is a small component of an overall tax package,” Ross said through a spokesperson. “With the entire project, $75 million in new property taxes would be put on the city tax rolls.”
Opponents of the tax exemption are preparing for a fight in City Hall. City Councilwoman Helen Sears reintroduced a resolution calling for the state Legislature to end the tax break, and a hearing will be held soon.
The Garden was granted the exemption in 1982, when then-owner Gulf & Western were threatening to move the NBA’s Knicks and the NHL’s Rangers out of the city. So far, MSG has pocketed $256.2 million, adjusted for inflation, according to the Independent Budget Office.
“The taxpayers shouldn’t be subsidizing Stephon Marbury’s salary,” Jonathan Bowles, director of the Centre for an Urban Future, said to the Daily News.
Some observers still believe the city will ultimately support continuing the tax break in hopes that moving the arena west, would trigger a transformation of the West Side. –by CelebrityAccess Staff Writers
