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February 6, 2005
MSG to MTA: Why won't you let us give you money?
Madison Square Garden letter to MTA. AKA Ratner vs. Ratner.
This proposal is much more beneficial for the MTA and New York City and State than surrendering the sale of this valuable piece of property to a contentious and unpredictable arbitration process. For example:• New York City and New York State save $600 Million that they would have paid for the proposed Jets stadium.
• The MTA obtains a firm commitment from a credit-worthy buyer for a dramatically higher price than the Jets are willing to pay.
• New York City and New York State residents derive future tax revenues -- including property tax revenues -- certain to be many times greater than the revenues to be derived from the proposed Jets stadium.
• The project creates real, diverse jobs in a much more attractive environment.
February 4, 2005
Peter S. Kalikow Chairperson Metropolitan Transportation Authority 347 Madison Avenue New York, New York 10017
Dear Chairperson Kalikow:
We are pleased to present this proposal to the Metropolitan Transportation Authority (the "MTA") of the principal business terms on which Madison Square Garden, L.P. ("MSG") is prepared to acquire and develop the Site (as defined below).
- The Site.
The project consists of improvements to be built above the current Hudson Rail Yards bounded, generally, by West 30th and 33rd Streets, and Eleventh and Twelfth Avenues (the "Site"), currently proposed to be acquired by or leased to the New York Jets football team. The MTA will deliver the Site and the related development rights (collectively, the "Property") by fee simple conveyance or long-term lease of development rights, a long-term ground lease and/or another mutually agreed mechanism.
- The Project.
MSG will develop a project consisting of a dynamic mixed-use community centered on residential development (including affordable housing). The environmentally sensitive design with ample open space and community amenities will be created by internationally recognized architect(s) and may include office, general commercial, cultural, recreational, hotel, restaurant, retail, parking and entertainment uses. The design will contemplate public access to, and other enhancements of, the Hudson River waterfront, to serve as a beautiful, dramatic and vital neighbor to the newly-expanded Javits Convention Center, and visitors to the Javits Center will enjoy access to this new community and its amenities. The economic development impact from the diverse uses proposed will be much greater for New York City than the Jets' proposal. The aesthetically-pleasing and environmentally sound land-use plan to be developed by MSG will be a stronger and more coherent stimulus to broader development of the West Side of Manhattan.
Price and Payment.
MSG will pay an aggregate purchase price of $600 Million. The MTA will be responsible for delivering the Site with a platform (or other suitable support alternatives to a platform) in place, to be constructed by MSG or the MTA or by a mutually-agreeable third-party using a portion of the purchase price. The platform will be built in a manner mutually acceptable to the MTA and MSG as required by the design for the new development and to permit efficient operation of the railyards. We believe that our proposed uses for the platform will make it far less costly than those contemplated by the Jets and we will agree to negotiate with the MTA about any cost overages over $250 million.
This proposal is much more beneficial for the MTA and New York City and State than surrendering the sale of this valuable piece of property to a contentious and unpredictable arbitration process. For example:
• New York City and New York State save $600 Million that they would have paid for the proposed Jets stadium.
• The MTA obtains a firm commitment from a credit-worthy buyer for a dramatically higher price than the Jets are willing to pay.
• New York City and New York State residents derive future tax revenues -- including property tax revenues -- certain to be many times greater than the revenues to be derived from the proposed Jets stadium.
• The project creates real, diverse jobs in a much more attractive environment.
Zoning.
This proposal is based on the assumption that the zoning applicable to the Site will permit the highest and best development of the Site for the diverse uses described above, consistent with the Hudson Yards zoning recently approved by the City Council for the area around the Site.
Commencement of Construction.
MSG will commence construction as expeditiously as possible following the receipt of all necessary governmental approvals.
This proposal indicates our current intentions with respect to this matter. We are prepared to commence negotiation of binding agreements as expeditiously as possible upon your confirmation that the MTA desires to proceed on the basis of the terms outlined in this proposal. If the MTA intends to solicit or entertain other proposals or offers, or conduct an auction of any sort, for the Site and/or the related rights, please consider this proposal to be an expression of MSG's continuing interest in obtaining the Property.
Please let us know as soon as possible if the MTA is prepared to proceed with this exciting proposal. We are enthusiastic about this excellent opportunity and look forward to hearing from you regarding this proposal.
Sincerely,
Madison Square Garden, L.P.
By: ________ Hank Ratner Vice Chairman
Posted by amy at February 6, 2005 5:50 PM