IBO Report Concludes that Tax Revenue Loss from MSG’s Tax Exemption Not Beneficial

Since 1982 Madison Square Garden (MSG) has enjoyed the benefit of a property tax exemption that was granted by the New York State Legislature, and unless repealed from state law, the exemption applies in perpetuity. At the time the exemption was granted, the goal was to incentivize the Knicks and Rangers sports teams to remain in New York City according to the recently released report by the Independent Budget Office (IBO). Based upon Department of Finance (DOF) estimates provided by the IBO, which is tasked with providing periodic evaluations of the New York City’s economic development tax expenditure programs, the estimated value of the MSG tax exemption in 2023 is $42.4 million, equating to a property tax exemption over the years of more than $946.7 million as measured in 2023 dollars. Since “MSG ownership is not required to report any data — such as number of jobs created and wages paid — to any government agency,” nor undergo a legally mandated review period, there is no oversight to track the necessity and effectiveness of the exemption over time. It has been concluded by the IBO that not only does the MSG tax expenditure not align with stated city economic development policy, determining factors for retaining the Knicks and Rangers in the city are more likely reliant upon potential relocation options being “limited by current market saturation within the leagues” as well as the economic benefits of MSG’s existing location directly above Penn Station — the busiest transit hub in North America, rather than the property tax exemption.

Source:    https://www.ibo.nyc.ny.us/iboreports/an-examination-of-the-madison-square-garden-property-tax-exemption-july-2023.pdf