Jones Lang LaSalle


Cablevision agrees to build new Garden
by Anne Michaud

Cablevision Systems Corp. signed a memorandum of understanding to build a new Madison Square Garden one block west, on Ninth Avenue, as part of the James A. Farley Post Office renovation, according to sources with knowledge of the negotiations.

The current Garden atop Penn Station would be demolished to make way for a mixed-use tower and to restore the station to its former glory. Details of the agreement are sketchy, but a source said The Related Cos. brokered the deal by smoothing over hard feelings remaining from the West Side stadium fight between the Bloomberg administration and Cablevision executive James Dolan, the Garden’s chairman.

Related and Vornado Realty Trust are under a state contract to renovate the Farley Post Office. The Garden deal stalled in early January when Cablevision held out for better financial terms, sources said.

It isn't clear whether the Garden will keep a city property tax break that MSG receives at its current site amounting to more than $10 million annually. Former Mayor Ed Koch agreed to the break in order to prevent the Knicks and Rangers from leaving town.

The Garden will take up the western half of the $556 million Farley renovation. The space was originally slated for office and retail development. The eastern half of the project will be redeveloped as the Moynihan Station transit hub. The State Development Corp. says it is moving forward with Moynihan Station and expects a final project design by June.
©2006 Crain Communications Inc.