Madison Square Garden has been exempt from the taxes for 27 years, since 1982, when it was necessary to keep the building profitable and prevent sports teams, such as the Rangers and Knicks, from moving out of New York City. Now that nearly every game is sold out, and Madison Square Garden is profiting millions per year not only due to ticket sales, but concession and ad revenue, Councilman Gioia says this is no longer necessary.
“It’s not right that multi-million dollar sports franchises are being propped up by the government while everyday New Yorkers are struggling,” he said. “In tough economic times, it is not right for MSG to not pay its fair share. For 27 years, MSG has been able to avoid paying property taxes –the free ride should end.”
The property tax exemption for Madison Square Garden is the only exemption in state law that benefits a private, for-profit company in the state. Similar arenas in other states like the Fleet Center in Boston or United Center in Chicago do not receive property tax exemptions.
According to the Independent Budget Office (IBO), by 2010, NYC will have lost $320 million from the property tax exemption; $14 million dollars in 2010 alone. One IBO economist testified before the City Council Finance Committee, saying there is a broad consensus within the economics field that government subsidies for sports facilities are not an effective use of scarce public resources.
Councilman Gioia says with thousands of citizens struggling to make ends meet and paying more for everything, the money should be put to other use, such as hiring new police officers, teachers, retaining fire companies set to close and the firefighters from those companies, and operating more senior centers.
He says the city can no longer afford to pay their property taxes, and that the sweetheart deal needs to end.
Last year, Councilman Gioias voted ‘yes’ on the resolution calling for lifting the property tax exemption, there was not a majority vote for this resolution.
