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The Rangers hockey team is ripping through the playoffs and is making a hard run for its first championship title in 20 years.
Win or lose, the owners of the team, the Madison Square Garden Company and the Dolan family, led by James L. Dolan, have already beaten every other sports franchise in town. Since 1982, the Garden — an enormously successful, for-profit business — has not paid a dime to New York City in property tax for the land and the building it occupies from 33rd to 31st Street between Seventh and Eighth Avenues. A state law enacted 32 years ago granted the Garden a tax exemption that has no expiration date, a favor given to no other property in the state.
Truly, this is one of the wonders of the world: a chunk of corporate welfare unlimited in size and infinite in time.
It also has remained impervious to reform or repeal, though another effort has been started this month by the City Council and is gaining support in the State Legislature.
Pleading hard times and high costs in the early 1980s, a ragged era in the city, the Garden said it needed concessions from its unions and tax breaks from the city. Edward I. Koch, who was mayor at that time, said in 2002 that he believed he had agreed in 1982 to a tax exemption that would last for 10 years. But the language of the deal was read to mean that as long as the Knicks and the Rangers played their home games at the Garden for 10 years, the break would continue.
And so it has.
For the tax year that begins in July, the Garden will save “roughly $54 million” in property taxes, according to George Sweeting, the deputy director of the city’s Independent Budget Office. Last year, the savings were $17 million. In 2002, it saved $6.9 million. The deal is now worth nearly eight times more because the value of land in Manhattan has soared and because the Garden has invested heavily in renovating the building.
Cumulatively, the Garden has saved $350 million since 1982.
For the Dolan family and other shareholders, having the Garden as a home arena has been a great financial success, regardless of how the teams have performed: Even with a 40-year streak of futility, the Knicks are regarded as the most valuable franchise in basketball, worth $1.4 billion; the Rangers are ranked the second most valuable hockey team, at $850 million.
Sports teams used to pay property taxes — the tax rolls from the 1920s show that Yankee Stadium, the Polo Grounds and Ebbets Field all paid taxes on their land and buildings. Even the Garden paid taxes from 1968, when this arena opened, until the 1982 deal.
Now it is considered almost an affront to all that is good and holy to regard these businesses as moneymaking operations, instead of sacred civic trusts that play the national anthem whenever there’s an audience in the house. The other sports teams in town — the Yankees, the Mets and the Nets — also received enormous subsidies to build new facilities. But the Garden’s continuing break is worth about 50 percent more than the sweetest of the other deals, with the Yankees, according to the analysis provided by Mr. Sweeting.
“They make use of every loophole in the campaign finance law in order to maximize their influence,” Ms. Lerner said. “They are not alone in doing this. They are particularly masterful at this. It garners them terrific tax breaks.”
The Garden — which has squads of lobbyists — did not bother to send someone to testify before the City Council last week, but it provided testimony that was read into the record.
“It remains patently unfair to single out one company when other entities receive significant public subsidies,” the company complained.
Who could argue with that?
(Dolan is the CEO of Cablevision)
Win or lose, the owners of the team, the Madison Square Garden Company and the Dolan family, led by James L. Dolan, have already beaten every other sports franchise in town. Since 1982, the Garden — an enormously successful, for-profit business — has not paid a dime to New York City in property tax for the land and the building it occupies from 33rd to 31st Street between Seventh and Eighth Avenues. A state law enacted 32 years ago granted the Garden a tax exemption that has no expiration date, a favor given to no other property in the state.
Truly, this is one of the wonders of the world: a chunk of corporate welfare unlimited in size and infinite in time.
It also has remained impervious to reform or repeal, though another effort has been started this month by the City Council and is gaining support in the State Legislature.
Pleading hard times and high costs in the early 1980s, a ragged era in the city, the Garden said it needed concessions from its unions and tax breaks from the city. Edward I. Koch, who was mayor at that time, said in 2002 that he believed he had agreed in 1982 to a tax exemption that would last for 10 years. But the language of the deal was read to mean that as long as the Knicks and the Rangers played their home games at the Garden for 10 years, the break would continue.
And so it has.
For the tax year that begins in July, the Garden will save “roughly $54 million” in property taxes, according to George Sweeting, the deputy director of the city’s Independent Budget Office. Last year, the savings were $17 million. In 2002, it saved $6.9 million. The deal is now worth nearly eight times more because the value of land in Manhattan has soared and because the Garden has invested heavily in renovating the building.
Cumulatively, the Garden has saved $350 million since 1982.
For the Dolan family and other shareholders, having the Garden as a home arena has been a great financial success, regardless of how the teams have performed: Even with a 40-year streak of futility, the Knicks are regarded as the most valuable franchise in basketball, worth $1.4 billion; the Rangers are ranked the second most valuable hockey team, at $850 million.
Sports teams used to pay property taxes — the tax rolls from the 1920s show that Yankee Stadium, the Polo Grounds and Ebbets Field all paid taxes on their land and buildings. Even the Garden paid taxes from 1968, when this arena opened, until the 1982 deal.
Now it is considered almost an affront to all that is good and holy to regard these businesses as moneymaking operations, instead of sacred civic trusts that play the national anthem whenever there’s an audience in the house. The other sports teams in town — the Yankees, the Mets and the Nets — also received enormous subsidies to build new facilities. But the Garden’s continuing break is worth about 50 percent more than the sweetest of the other deals, with the Yankees, according to the analysis provided by Mr. Sweeting.
“They make use of every loophole in the campaign finance law in order to maximize their influence,” Ms. Lerner said. “They are not alone in doing this. They are particularly masterful at this. It garners them terrific tax breaks.”
The Garden — which has squads of lobbyists — did not bother to send someone to testify before the City Council last week, but it provided testimony that was read into the record.
“It remains patently unfair to single out one company when other entities receive significant public subsidies,” the company complained.
Who could argue with that?
(Dolan is the CEO of Cablevision)
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