The renovation of MSG was spurred by the addition of Barclay's to the NYC arena scene and to a lesser degree, the Prudential Center in Newark as both were newer and offered better amenities that MSG pre-rennovation.
Dolan also blew that cool Billion$ into NYC's face because the city owns the land that MSG is and and wanted Dolan to build a new arena at a different location and Dolan does not want to do so. Why? MSG is built on top of Penn Station and the Hudson train lines; both of which need to be urgently renovated and expanded. While the city does have a significant chunk of land to expand into (the Farley Post Office complex across the street, it is not enough and Penn Station can't be expanded with MSG sitting on top of it. While MSG is important to NYC, 500,000 rail passengers use Penn Station per day which is more important to NYC's economy that MSG. Thus, MSG has to go and NYC in 2013 only renewed MSG's lease for 10 years by a vote of 47 to 1. Dolan wanted an evergreen lease (never ends) while Mayor Bloomberg wanted a 15 year lease. Due to the landmines that Dolan threw at the city during this process, he got 10 instead. This will be an interesting story going forward.
http://www.nytimes.com/2013/07/25/nyregion/madison-square-garden-is-told-to-move.html?_r=0
