City Council’s Five-Year MSG Permit Keeps Riders Stuck in Penn Basement (Op-Ed)

Op-Ed originally posted in Streetblog
by Rachael Fauss, Senior Policy Advisor

The City Council is right that Madison Square location on top of Penn Station is a “use” conflict – acknowledging something that is obvious to passengers crowding into the underground labyrinth of a station. But while the Council’s five-year permit extension knocked back MSG’s ridiculous request for a permit “in perpetuity,” it’s still too generous a deal for MSG and its owner, James Dolan.

The railroads — MTA, Amtrak and NJ Transit — have similarly determined that MSG’s location was “incompatible” with Penn Station upgrades. But the Council’s weak agreement squandered a chance to require Dolan to cooperate with the MTA’s requests for space, leaving transit riders in the lurch.

Dolan’s MSG empire will continue to cash on its lucrative location on top of the busiest train station in the country, the $7 billion in planned public renovations of Penn Station, and the perpetual state tax abatement that has cost New York City taxpayers $1 billion since 1982.

Much of the reporting on the deal said MSG would be put on a “shorter leash.” Let’s take a look at that and what the Council’s proposal actually does, and what it does not do — with a particular focus on Penn Station.

What the Council’s MSG Proposal Does

• 5-year permit renewal: A shorter permit extension means we’ll be back here again having these same conversations in five years, rather than 10, kicking the can down the road. The Council called it a “clean” permit, so there is no requirement for MSG to come back to prove they are playing ball on Penn Station renovations. While a shorter permit is clearly better than an indefinite one, advocates like Reinvent Albany and local and state officials were pushing for 3 years, which is more closely aligned to the MTA’s schedule for Penn Station upgrades.
• Transportation Management Plan: Freight delivery for MSG is a mess, and currently involves parking trucks on the street illegally and in a taxiway that has been unused since 2001. The council’s requirement that MSG submit a transportation management plan within six months of the permit approval will certainly help, but the plan focuses on trucks and deliveries to MSG, not a larger transportation plan related to Penn Station upgrades and how MSG will relate to station improvements.

What It Does NOT Do

• Require MSG’s cooperation on Penn Station upgrades: The City Planning Commission proposed a 10-year conditional approval that would require MSG prove how it would facilitate Penn Station renovations when the MTA reached 30 percent of completion of its designs for the project. We were skeptical that this plan had enough teeth to force meaningful cooperation, but at least it forced MSG to negotiate on Penn Station renovations, not just its loading operations.
• Require MSG to give up key properties at no cost for Penn Station upgrades: We previously made the case to Streetsblog readers that MSG should pay its fair share and give the Railroads some of its property at no cost: the taxiway, and the entrances on Eighth Avenue and 31st and 32nd Streets. The Penn Station Master Plan as well as ASTM’s plan both require these properties to complete upgrades, for a new mid-block train hall and improved 8th Avenue entrances. Given what they have gained from the city in tax breaks and will gain from a permit extension, this is the least they can do to repay the public. Without the leverage of the permit process, the MTA, Amtrak and NJ Transit will be left on their own to negotiate with MSG on these items.
• Repealing MSG’s $43-million/year tax break: While the Council has previously adopted resolutions supporting state bills to repeal MSG’s tax break in 2014 and 2008, no Council member has even introduced such a resolution this session supporting A846 (Weprin)/S1632-A (Kavanagh). Without support from the city, the measure is a much tougher lift in Albany. It should be noted, however, that the state Senate’s budget proposal would have sent MSG’s tax payments to the MTA as part of its MTA funding proposal. Getting rid of this tax break should be a no brainer – there is no justification for the state law that abates MSG’s city property taxes (see the NYC Independent Budget Office’s report on the tax break and the lack of any evaluation on whether it is effective).

Given MSG’s substantial lobbying expenses and campaign contributions from MSG affiliates to city candidates, it is clear that the company thinks extending its permit is good for business, and a good return on investment. Surely MSG can afford to give back some of these profits to the people of New York City by helping to fix the transit hub that makes their location so attractive.

We understand that the City Council and city Law Department have been squeamish about pushing the boundaries of permit approvals by adding conditions forcing private actors to act in the interest of the public. But if not now, then when will the city force MSG’s hand? 

Transit riders shouldn’t have to wait five more years for MSG to finally pay its fair share for Penn Station improvements.