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Officials hope to get MSG back on Penn Station project

BY KARLA SCHUSTER | karla.schuster@newsday.com

March 29, 2008

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A day after Madison Square Garden announced it would not build a new arena as part of a major redevelopment of Pennsylvania Station, city officials said they believe there is still a chance to rescue the troubled project and get the Garden back on board.

If the state, which controls the project, can quickly get its ballooning costs under control and make measurable progress in securing financing, MSG officials may be prevailed upon to reconsider their decision to renovate the existing arena.

"We need to be able to convince them that we can build the project on time," said Robert Lieber, deputy mayor for economic development. "We need to convince them we can get this thing done."

On Thursday, MSG announced that it would spend $350 million to refurbish the aging Garden, rather than building a new arena at the landmark James A. Farley Post Office. The decision threw more doubt on the already hobbled proposal to build a new Penn Station -- called Moynihan Station, because the Garden sits above the station and must be demolished to make way for the new railroad hub.

MSG officials declined to comment Friday.

"Our statements speak for themselves," said Garden spokesman Barry Watkins. MSG is owned by Cablevision Systems Inc., of Bethpage.

The Garden, which originally announced its plans to renovate in 2004, agreed to hold off and consider a move instead to facilitate the Moynihan Station project. But MSG officials grew increasingly frustrated as project costs skyrocketed from $900 million -- which the developers, city and state had pledged to contribute -- to almost $3 billion, and the state's Empire State Development Corp. had little success in closing the gap with federal funding.

Garden officials say a 30-day deadline they had given officials from the administration of former Gov. Eliot Spitzer to finalize the deal was approaching when Spitzer resigned amid a sex scandal and his hand-picked director of the Empire State Development Corp., Patrick Foye, also stepped down.

State leaders, who are scrambling to approve a budget, had little to say about the Garden's decision and its impact on the Moynihan Station project.

Senate Majority Leader Joseph Bruno (R-Brunswick) declined to comment, as did Gov. David A. Paterson.

Assembly Speaker Sheldon Silver (D-Manhattan) spokesman Dan Weiller said: "Moynihan Station is a good project, and the speaker hopes it can be revisited when the economic climate improves."

Even city officials who had initially blasted the Garden sounded a more conciliatory tone Friday, and urged MSG to reconsider. "I understand why they're frustrated," said City Council Speaker Christine Quinn, who Thursday called the Garden's decision "callous" and suggested MSG might need the council's support for any renovations it has planned. "And I understand why they are dissatisfied ... but what they did was move us a step closer toward it not being build ... so I urge them to come back to the table and get the project going."

Staff writer Michael Amon contributed to this story.