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SBJ/20100301/This Week's News
MSG prices bunker suites above $1M
Published March 1, 2010
In a market already flooded with high-priced premium seating options, Madison Square Garden has set a new bar for major sports arenas with a luxury seating price tag that has reached $1 million.
As part of its $800 million renovation, the Garden is selling 20 planned “bunker” suites for seven figures, a price far surpassing the $600,000 charged for the four bunker suites at the American Airlines Center in Dallas, and roughly matching the $1.2 million price of the best suites at the new Giants/Jets stadium set to open next year in the Meadowlands.
Madison Square Garden Sports President Scott O’Neil refused to discuss the prices of the new bunker suites, or, as MSG prefers to call them, event level suites. Multiple industry sources have confirmed the seven-figure price of the suites, which are scheduled to open in October 2011 as part of the Garden’s renovation. The Garden now has 89 suites priced at between $225,000 and $400,000, all located in the arena’s upper concourse.
Madison Square Garden would not disclose how many of the 20 suites have been sold, but O’Neil said sales are strong.
“We are confident where we sit,” he said. “It’s a little different when you have 265 events in the middle of Manhattan over the busiest transportation hub in the nation’s largest city.”
The event level suites will be built under the stands, steps from the arena floor, with no direct view of the competition. The suites include prime lower bowl seating for up to 12 people for all events at the Garden. For hockey, the suites include seats located in the first five rows of the arena. For basketball, they include seats in rows 7-12. O’Neil would not discus terms of the deal, but the suites typically are multiyear agreements with price escalators built into the deals. Unlike the bunker suites in Dallas, food and beverage are not included in the price.
Buyers will have the choice of a working fireplace or a waterfall to complement other amenities, such as granite countertops, in a design that has a kitchen built in the front of suites, closest to the arena floor, and the living room in the back.
“The bunkers are better than any premium area I’ve ever seen,” said Robert Tuchman, who recently toured MSG’s marketing center as executive vice president of Premiere Global Sports, a corporate hospitality group that works with sponsors in New York. “They’re packaging them with a lot of events, which is unlike any other arena, due to the amount of content they get at MSG. If any place can sell a suite for that amount of money and get the value, it will be MSG. For what you’re getting, I can see that as a reasonable price tag.”
In addition to the 20 event level suites, the renovation also includes plans for 58 new lower level suites, 18 upper level suites for a total of 96 suites. There will also be two new club spaces, one at the event level and one on the lower level of the arena. The renovated Garden will also have new concourses, sky bridges and party decks built above the playing surface. Construction, which will not affect the Knicks or Rangers seasons, is scheduled to be completed by the 2012-13 season.
The price of MSG’s event level suites is roughly double the “backstage” bunker suites to be built by the New Jersey Nets at the $800 million Barclays Center, which is planned to open in 2012 in Brooklyn. The Nets have just begun a private sale of the 11 suites, which are priced at $540,000. Each suite which will offer exclusive access to a champagne bar and eight seats located in the first 10 rows of the arena for all events. Terms include deals for five-, seven- and 10-year contracts, with price escalators ranging between 3 percent and 5 percent per year. A public sale of the suites is set for March.
“We are going after a different market,” said Nets Sports & Entertainment President and CEO Brett Yormark. “The Garden is going after an ultra-premium market and we are going after the premium market. The distinct difference is there are more people to talk to in the premium market.”
The Nets would not disclose any design elements of their “backstage” bunker suites, which are part of the team’s plan to build 104 total suites, including 68 loft suites with 10 seats priced at $270,000 to be marketed to small to midsized businesses. The new arena also will include 15 brownstone suites that seat 16 people for $395,000. Food and drink is not included in any of the suites.
Yormark said he is not concerned about a saturation of the suite market in the New York region, despite the opening of the new Yankee Stadium and the Mets’ Citi Field last year, combined with the new Meadowlands stadium, Prudential Center, Red Bull Arena and the renovated Madison Square Garden. There will be more than 500 new suites in the New York region.
“There is a midtier market that exists,” Yormark said. “We are not a seasonal play like the new Giants stadium. We are year-round and have better prices.”