>What happens if they just don't renew the lease?

It's not a lease that the city can decide whether to renew or not. It's an operating permit so even if not renewed the city needs to eminent domain the arena to tear it down.

>But MSG is hardly down for the count. That’s because uprooting the Garden isn’t as simple as yanking the permit. For starters, say real estate lawyers, the arena’s owners — a company controlled by the Dolan family, which also owns the Knicks and Rangers teams — would be due a financial payout.

...

>If the permit expires, the games and shows could go on — but without much of an audience. The special permit, which expires July 24, allows the Garden to hold more than 2,500 spectators. However, the city would likely allow the Garden to continue operations without interruption while the venue goes through the review process.

...

>Michael Rikon, an attorney whose law firm focuses on eminent domain — cases in which government takes or restricts private property — says said he agreed with MSG’s claim that it’s being singled out, given that MSG owns the property and has successfully operated it.

>If the city denied the MSG permit, Rikon said, “Just compensation would be required. Because if they do not grant the special permit, the property becomes worthless. It can’t be used for its highest and best use.”

>In 2021, the Empire State Development authority estimated that moving the Garden would cost the public $8.6 billion, including $5 billion to build a new arena.

$5 billion to build a new arena seems high since Barclays was built for $1 billion, but whatever the exact amount it would be expensive.