State Senate proposes ending MSG’s 41-year property tax break in order to fund the MTA

BY AARON ELSTEIN

Madison Square Garden’s property tax abatement, a bene t that has saved the arena’s owner more than $900 million over 40 years, may soon be no more.

e New York state Senate’s budget proposal contains a provision that would deliver a death-blow to the exemption. Now the question is whether the tax-break-killing bill, which did not make the cut in the Assembly’s budget proposal, will be resuscitated during nal budget negotiations in Albany.

“I hope the Assembly and governor will join the Senate in repealing MSG’s property tax break so we can use that money to fund the MTA,” said state Sen. Brad Hoylman-Sigal, whose district includes the Garden.

In a statement the company said:

“It’s interesting that Sen. Hoylman is rallying to end governmental subsidies for corporations when just last year he voted in favor of legislation that extends a $420 million governmental subsidy for the lm industry and currently sponsors legislation to create new subsidies for the musical and theatrical production industry.”

It continued: “Our tax abatement is no di erent than the government subsidies that every single stadium and arena in New York city and state receive and in fact, is hundreds of millions of dollars less than most other venues.”

MSG’s tax abatement is di erent from subsidies granted to the Yankees and Mets. Both baseball teams are exempt from property taxes too, but they make tens of millions in payments in lieu of taxes annually and will do so until their bene ts sunset in about 20 years. ( e payments go to bondholders, not the city.) e Garden’s tax exemption continues until the Legislature votes to end it.

Decades of savings e bene t saved MSG $42 million last year, according to city records. e Independent Budget Ofce estimates that, since inception, it has cost the city $916 million in foregone revenue. Lawmakers have tried for years to eliminate the bene t without success, but the Garden’s clout may have waned since scandal broke over the arena using facial-recognition technology to boot out unwanted ticket-holders.

Last week on Fox 5, Gov. Kathy Hochul was asked if she supports ending the Garden’s tax break.

“I know how important the Garden is to the city,” she said.

She wouldn’t commit when asked if she’d veto a budget that ends the exemption.

MSG’s tax abatement dates back to the spring of 1982, when the New York Knicks and Rangers considered moving to New Jersey. In exchange for a promise that the teams would stay put, city leaders agreed to grant a temporary reprieve on property taxes for the Garden, which somehow morphed into a permanent abatement when the state Legislature approved it.

According to a formal memorandum of understanding dated July 15, 1982, MSG’s tax exemption “shall continue, as long as both of said teams play their home games therein and no longer.”

Only a month after MSG and the city reached an agreement, the Garden’s leverage disappeared. In May 1982 a failing hockey team in Denver relocated and became the New Jersey Devils. ■