A new report from the Independent Budget Office finds that the city lost nearly $1 billion in property tax revenue since 1982 because of state subsidies to Madison Square Garden.
The arena paid property taxes until the state Legislature exempted MSG indefinitely in 1982, the IBO report said. The 38-page report called the estimate “conservative” because the city has little motivation to calculate revenue it can’t collect.
“There’s also a real disconnect in that the property taxes that Madison Square Garden is exempt from are a revenue loss to the city of New York, but this tax exemption remains in perpetuity unless it’s repealed by the state,” said Sarah Stefanski, who helped author the report for the IBO.
Stefanski said it was nearly impossible to calculate the economic benefit gained from the tax deal because MSG is not required to report the number of jobs created or wages paid.
The report also analyzed the threat of the Knicks basketball team and Rangers hockey team leaving New York and found it unlikely, given the costs associated with rebranding the teams.
“The Madison Square Garden property tax break benefits an arena located in Midtown Manhattan,” Stefanski said. “That’s in contrast to city policy, which largely uses economic development tax incentives to promote businesses in upper Manhattan or boroughs outside of Manhattan.”
An MSG spokesperson declined to comment on the record. However, in an interview with Fox 5 in January, MSG’s CEO James Dolan said he would never move the Garden.
“It’s in a good place right now. It’s easy for everybody to get to,” he said. “And honestly, we’ve invested billions of dollars into the building.”
State lawmakers in Albany have tried for years to pass a bill that would end MSG’s tax exemption. This year, Democrats in the state Senate included provisions in their version of this year’s budget to eliminate the exemption. But Gov. Kathy Hochul has so far not taken a clear position.
“What’s been…
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