Fireworks Erupt at Planning Commission Hearing on MSG as Dolan’s Team Blasts MTA Report

The clock is ticking.

The apparently tense negotiations between Madison Square Garden and the three railroad giants that use Penn Station spilled into public view at a June 7th hearing of the City Planning Commission, which must decide whether to allow the Garden to continue to operate in its present location on top of the station.

The Garden’s Executive Vice President, Richard Constable, accused the rail agencies, led by the Metropolitan Transportation Authority, of strong arming the Garden to force concessions in exchange for an extension of its permit to operate.

“The challenges the MTA faces do not arise out of arena use,” said Constable, reacting to a report in which the MTA, New Jersey Transit and Amtrak said the Garden as currently configured was “not compatible” with safe and acceptable operation of Penn Station.

“They exist because the MTA would like to use land it does not own to construct its proposed improvement. The MTA is blatantly attempting to use their compatibility report, much of which is outside the scope of the special permit process, to further their negotiating position.”

But the head of construction and development for the MTA, Jamie Torres Springer, told the hearing that it was “very standard and undertaken very often by this commission that in exchange for certain benefits...there are commitments that are made.”

He noted that both the new super-tall One Vanderbilt, next to Grand Central Terminal, and the former Grand Hyatt Hotel had made “major transportation improvements” as part of winning the right to build.

The Garden’s situation is slightly different, as members of the planning commission noted. The Garden has been on top of Penn Station for more than fifty years. It now seeks the right to stay their “in perpetuity” and continue to operate its 20,000 seat arena, which requires a special permit that expires on July 24.

The Garden derives great benefit from its close proximity to the train station, both sides noted. Torres-Springer emphasized that the station improvements contemplated by the MTA and the other rail agencies will also benefit The Garden, which he said should therefore support them by contributing both necessary property and construction costs.

“To implement these compatibility changes, we are looking for an agreement from MSG to enable us to do this work and for certain contributions proportionate only to benefits that MSG receives from the improvements,” Torres-Springer said. “We’re not saying MSG must move. What we are saying is MSG must work with us to take steps to address these constraints and meet the needs of transit users.”

Constable and other representatives of The Garden complained that the MTA plan was vague and unworkable. But Torres-Springer insisted the plans were clear enough, even at a conceptual level, to make a deal “today” subject to refinement.

The chair of the planning commission, Dan Gardonick, made it clear that the commission was looking for a “trigger” to show that The Garden and the Railroads, which also include Amtrak and Jersey Transit, had an agreement for improving the train station that would justify extending the Garden’s operating permit.

“What would you have us have MSG do today to make it in your view consistent and compatible,” Garodnick, asked Torres-Springer?

Torres-Springer replied that before the special permit was extended or renewed The Garden and the three rail agencies should come to an agreement on “four fairly straightforward categories.”

He said they are:

*The transfer of property from MSG to the rail agencies. In particular, the railroads want the taxiway, unused for taxis since 9/11, to build a grand atrium above Penn Station, as well as land around the corners of Eighth avenue at 31st street and 33d street to build bigger entrances to both the train station and The Garden. In exchange the rail agencies would give MSG space to create modernized loading docks so trucks don’t have to load and unload up on the street or at the edge of The taxiway.

* “There are several things that, frankly, MSG needs to get out of our way,” Torres-Springer said. These include a “Con Ed vault, certain HVAC systems, certain cables and so on.” The Garden complained that the rail agencies are underestimating the challenge of this work and that it could, for example, force the Rangers to temporarily relocate if the freezing systems for their ice were moved.

*The MTA needs MSG agreement for the reconstruction, including, Torres-Springer said, to move the systems for chilling the ice onto the roof of the new entranceways planned for the corners at Eighth Avenue

*MTA wants MSG to pay some of the costs for the new entranceways and loading bay. “We’re not proposing that they bear 100% of the cost because we need to reconstruct the loading in order to create the midblock train hall. But we would seek a contribution.” Similarly, the new entranceways would improve access to both the trains station and the Garden, Torres-Springer said.

Torres-Springer noted that The Garden has been working in close concert with a private developer, the Italian firm ASTM, which has proposed putting up as much of a billion dollars of its own equity to help pay for the renovation of Penn Station. A substantial part of that money would go to The Garden.

Unlike the rail agencies, which are not offering to pay for any land, ASTM is offering to buy from the Garden the Theatre that currently sits on the west end of the Garden along Eight Avenue. Demolishing that theatre would allow for an even grander Eight Avenue entrance to Penn Station then the improvements the rail agencies are proposing.

An ASTM executive, Peter E. Cipriano, said the company would like earn back its investment through what is known as an “availability payment,” a phrase describing payments from government agencies to a private contractor that builds a highway, airport or other public facility.

This form of public-private partnership is common in highway construction in other countries and was recently used for the rebuilding of LaGuardia airport.

Cipriano told the planning commission that availability payments generally produce a return on the private contactors investment of between 8% and 12%. He noted this was less than the return a develop would expect in a private project.

The MTA chair, Janno Lieber, has said he does not believe the purchase and demolition of the Madison Square Garden Theatre is a good use of public capital, but Torres-Springer said at the hearing that there were many interesting elements to the ASTM plan.

The testimony from MSG, the rail agencies and ASTM was just the start of a six hour hearing on the future of the Garden. Dozens of people appeared to argue that the Garden must stay or demand that it move.

“You don’t move the Eiffel Tower,” said one of the celebrities who has played The Garden, the rapper Darryl McDaniels, better known as DMC, a founder of the group Run-DMC.

McDaniels compared the Garden and Penn Station to a long married couple, which prompted Alexandros Washburn, a leading advocate of moving the Garden, to describe the current situation as a married couple sleeping in bunk beds.

That was only one of several vivid images offered in testimony. “Move Madison Square Garden,” said Lynn Ellsworth, co-cooridantor of the Empire Station Coalition, “Get Dolan off the site where he squats like a dog in a manger, preventing an investment in the broader public good.”