BILL NUMBER: S957
SPONSOR: KAVANAGH
 
TITLE OF BILL:
An act to amend the real property tax law, in relation to discontinuing
the real property tax exemption for certain real property used for
professional major league sports
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill amends Section 429 of the real property tax law, "real proper-
ty used for professional major league sports," to require that the
owners of Madison Square Garden pay real property taxes.
 
SUMMARY OF PROVISIONS:
Section 1 of the bill states the Legislative intent behind the repeal.
Section 2 of the bill amends Section 429 of the real property tax law to
end the tax exemption after the 2023 assessment roll.
Section 3 of the bill adds a new section 429-a to the real property tax
law which directs all revenue collected from the ending of this tax
exemption towards the MTA finance fund.
Section 4 of the bill sets forth the effective date.
 
JUSTIFICATION:
Madison Square Garden has been a New York institution for nearly 150
years. Across three centuries, the four venues that have held this name
have showcased the very best of sports and entertainment to the people
of this state, and to millions of visitors and viewers from around the
world.
However, for the last forty years, New Yorkers have not only been
supporting the privately-owned MSG at the Box Office, they've been
subsidizing The Garden's near $50 million annual property tax bill, as
well.
This tax exemption was given to the arena in 1982 after former owners
Gulf & Western Industries had threatened to move the Knicks and Rangers
to New Jersey-as the New Jersey Nets, Devils, and New York Giants had
recently done. Gulf & Western lobbied NYC Mayor Ed Koch for a full prop-
erty tax exemption which he recommended to the state legislature. At
that time, the exemption cost the state around $5 million annually;
money that was used by Gulf & Western to build the stadium's first luxu-
ry skyboxes. Mayor Koch told the NY Times in 2002 that he believed the
exemption would sunset after ten years, but no such provision existed in
the law.
In the thirty-eight years since the legislature granted this exemption,
the state of New York has lost over $550 million in revenue, according
to the NYC Independent Budget Office (180). Further, if current proper-
ty value trends continue, MSG's total tax break could clear $1 billion
by,2031). Meanwhile, the Knicks' market value in 2020 is now $4.6
billion, nearly seven times its 2011 value; while the Rangers' value has
more tripled over the same period to $1.65 billion, according to Forbes.
In his 2014 testimony regarding this proposed repeal, MO Deputy Director
George Sweeting noted that "the Garden is now, by all accounts, a highly
profitable enterprise," due to its "cable television network, more
intensive use of the facility to generate advertising revenue, and
construction of new luxury boxes and club seating areas with higher
ticket prices." Deputy Director Sweeting stated that " the Garden's
exemption is the only significant property tax exemption in state law
that benefits a single private for-profit firm in the city."
The conditions and fears that may have made this exemption necessary in
1982 have long subsided, and no exemption is granted in perpetuity. It
is long past time to end one of our state's most blatant examples of
corporate welfare.
 
PRIOR LEGISLATIVE HISTORY:
2024: S1632A (Kavanagh) - REFERRED TO LOCAL GOVERNMENT:
2023: S1632A (Kavanagh) - REFERRED TO LOCAL GOVERNMENT:
2022: S3122 (Kavanagh) - REFERRED TO LOCAL GOVERNMENT: /A9209 (Weprin)
referred to real property taxation
2021: S3122 (Kavanagh) - REFERRED TO LOCAL GOVERNMENT:
2020: S2897 (Kavanagh) - REFERRED TO LOCAL GOVERNMENT: /A4206 (Weprin) -
referred to real property taxation
2019: S2897 (Kavanagh) - REFERRED TO LOCAL GOVERNMENT: /A4206 (Weprin)
referred to real property taxation
2018: S8128 (Kavanagh) - REFERRED TO LOCAL GOVERNMENT: /A5500 (Weprin)
referred to real property taxation
2017: A5500 (Weprin) - referred to real property taxation
2016: A3421 - referred to real property taxation
2015: A3421 - referred to real property taxation
 
EFFECTIVE DATE:
This act shall take effect immediately; provided however, that the
provisions of this act shall apply to assessment rolls beginning with
the 2024 assessment roll.

Statutes affected:
S957: 429 real property tax law