William Henry Vanderbilt's decision to rename Gilmore's Garden to Madison Square Garden occurred during a period of significant urban development and change in New York City. The initial venue, Gilmore's Garden, had been operational since the 1870s and served as a major center for horse shows and various entertainment options. Vanderbilt's investment in the venue marked a pivotal shift; he was a leading figure in the New York Central Railroad and recognized the potential of expanding sports and entertainment facilities to bolster public engagement.

Upon its opening, Madison Square Garden quickly became synonymous with large public gatherings, hosting everything from boxing matches to musical performances. Its location at 26th Street and Madison Avenue allowed easy access, making it an ideal spot for diverse audiences. The transformation from a garden focused primarily on equestrian events to a garden of entertainment underscored the burgeoning popularity of sports, particularly with the rise of boxing and later, basketball.

The venue's design followed the architectural trends of the time, featuring a lavish interior and amenities that catered to an elite clientele, while also making popular entertainments accessible to the broader public. Vanderbilt's vision was not just to create a venue but to elevate the status of public entertainment in New York City, setting the stage for future developments in large-scale arenas and performance spaces.