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MSG puts up on yards bid.

One hour before MTA's imposed Friday deadline, Madison Square Garden provided the MTA with a 12-page letter detailing its $600 million offer for the rights to develop a mixed-use community centered around residential housing over the Hudson Yards.

So far, MSG's Cablevision is the only other bidder to compete with the Jets for the air rights to develop the land over the rail yards. The Jets have offered $100 million for the land, as well as to share the cost to build the platform necessary for the development of a sports and convention center on the site.

In the response letter to MTA Chairman Peter Kalikow, Madison Square Garden's Vice Chairman Hank Ratner wrote, "MSG and its affiliates propose to pay the MTA $600 million out of cash on hand and available borrowing capacity under current, committed credit facilities to move forward with the transaction without delay."

The letter strongly underscored that MSG continues to believe its proposal compares favorably to the Jets proposal by: generating greater tax revenues; providing better, more diverse and plentiful employment opportunities; and, reducing the burden on the regional transportation system to a more manageable level.

MSG has based its findings in part on its evaluation of the research of independent organizations like the Regional Plan Association, which has found that mixed-use development of the kind that MSG is proposing will Madison Square Garden puts up on yards bid Continued from Page 1

be far more beneficial to West Side residents and New York taxpayers.

Prior to Kalikow's request to MSG to specify details of its bid, Senate Deputy Majority leader Dean Skelos and othe, r Senate Republicans sent a letter asking the MTA chairman to open the bidding to other developers.

"We believe that a competitive RFP process would maximize the value received for the West Side Yard's development rights and establish an important precedent for future projects, such as Forest City Ratner's proposal for the Atlantic Yards in Brooklyn," said the Skelos letter.

Meanwhile, the Real Estate Board of New York is questioning the real value of the late bid by Cablevision--the parent company of MSG. REBNY asserts that when the bids are compared accurately, the amount offered is much less than $600 million.

"The unanswered questions that arise from the offer cause us to doubt that this is a credible proposal for the site," said REBNY President Steven Spinola. "The real estate community knows that this is not a $600 million offer versus a $100 million offer. When you look at the numbers this way, without considering the conditions and assumptions, you may as well be comparing offers for two different sites in two different countries."

"The timing of the offer is the main question," added Mr. Spinola. "Where was Cablevision during the review process? Instead of coming up with their own offer, they were busy funding the opposition. This sudden change of direction, and our preliminary evaluation of the offer, raises questions about its purpose. As far as we can tell, all this proposal does is delay the West Side development process for what could be as long as two to four years."

"The first priority here is for the MTA to get the full fair market value for the property," said Mr. Spinola.

MSG addressed all 46 detailed questions given to it by the MTA Chairman relating to price, payment, development plans, fiscal impacts and other particulars.
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Title Annotation:with Metropolitan Transit Authority; Madison Square Garden L.L.P.
Author:Nelson, Barbara
Publication:Real Estate Weekly
Geographic Code:1USA
Date:Feb 16, 2005
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