Instead, it will move forward with a renovation of its current facility, which was first announced four years ago.

WNYC's Matthew Schuerman has more.

The Garden had planned to take part in a complicated land swap that would have given it a brand new arena one block west.

But before that deal could be consummated, state officials had to come up with $2 billion in order to construct a brighter and more spacious Penn Station on the current site of the Garden.

Ironically, the Garden's announcement came just as the governors of New York and New Jersey said they would consider dipping into the Port Authority's largesse to make up the difference.

Others involved say the deal is far from dead. For one, it will take months for the renovations to get underway. For another, thousands of Penn Station commuters wake up every day hoping to find a way out of what they call The Pit.

For WNYC, I'm Matthew Schuerman.