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12-01-2011, 02:26 PM #1
State of New York Investigating Apple's Sweetheart Deal at Grand Central Station
As we've reported several times in recent weeks, Apple's forthcoming retail presence in New York City's Grand Central Station is the buzz of both the retail and tech worlds. Part of the impetus for the incessant coverage on this retail outlet is the fact that Apple received such a good deal on the real estate.
State Comptroller Thomas DiNapoli is behind the investigation that seeks to expose whether the Metropolitan Transportation Authority gave Apple overly generous terms on its lease for the shop, which will open next weekend. The Post reported that Apple’s $60-a-square-foot lease is "well below what many other tenants are paying" — including a future Shake Shack burger establishment, which will pay more than $200 a square foot.
“The article in the New York Post about the MTA’s contract with Apple in Grand Central Terminal is a cause for concern,” DiNapoli said this week. “This is a prime property, and I intend to make sure that the MTA hasn’t given away the store.” It should be pointed out that DiNapoli has a lengthy history of auditing the MTA real-estate portfolio. He has previously uncovered what the Post called "lax recordkeeping, hundreds of vacancies and mediocre marketing of properties."
It remains to be seen what - if anything - will come from the investigation. The only thing we know for certain is that the State of New York has some big, unanswered questions. And the answers should be interesting.
Source: New York Post
12-01-2011, 02:52 PM #2
Opening next weekend? I could have sworn that I read here a couple of weeks ago that it was opening the next day after the article was posted.
12-01-2011, 02:55 PM #3
I swear that I read the same article.
12-01-2011, 02:56 PM #4
This guy DiNapoli is such an idiot. Clearly he doesn't understand how business works, and it's for that reason why the economy blows. Grand Central Station wants Apple there because they attract a large number of consumers, therefore drawing more traffic to the rest of the stores. The more people showing up, the more they can charge for rent. So maybe they are taking a discount with Apple, but they are going to make a killing on all the business Apple brings in. He just wants to get his 15 seconds of fame by tying his name into a story about the most famous company in the world.
12-01-2011, 03:44 PM #5
12-01-2011, 04:00 PM #6
12-01-2011, 04:08 PM #7
12-01-2011, 04:28 PM #8
haters are gonna hate! #appleftw
12-01-2011, 04:54 PM #9
While they are getting a good deal, its most likely for the reasons stated in that they will bring in business. On another note, the information in the article above is wrong. They say Apple is paying $60 a square foot. The MTA said they pay $180
12-01-2011, 05:18 PM #10
The key word is "effectively". They are not paying $180/ft^2 to MTA, that figure is adding all of Apple's other expenses to the actual lease price. The figure reflects *all* the money Apple decided to spend on the space, including a hefty buyout of the previous tenant. Frankly, I don't see why he even brings this up. Who cares how much Apple opts to pay in addition to the lease? The real question is whether or not they are paying a fair rent price to MTA and if the taxpayers and commuters of New York are getting screwed.
Last edited by NapoleonRobotique; 12-01-2011 at 05:38 PM.
12-01-2011, 07:06 PM #11
So charge the burger shack max price, but give a discount price to one of the most lucrative companies in the world..... Hmm
12-01-2011, 08:13 PM #12
For those of you saying great for apple I say boo on you. IF it's not good for the people of NYC then who cares. THey need to pay the going rate for that space and not some mystical number adding in all the BS that has nothing to do with paying rent. Also, for those of you saying people will go shop at other stores BECAUSE the apple store is there give me a break! IF they where going there to see the apple store that's where they'll go, not to other stores. IF they where there for x reason and they planned on shopping anyway that has NOTHING to do with the apple store. Apple looks to reap the biggest benefits out of this deal as is. IF they paid the going rate for rent they would STILL reap the biggest benefits, so IMHO they need to pay the going rate.
12-01-2011, 10:31 PM #13
12-02-2011, 02:49 AM #14
so Apple it's renting way cheaper than others establishment, who knows who's behind this deal
12-03-2011, 12:05 AM #15
A big difference here, though, is that Apple will most likely bring in a lot of traffic, Apple most likely pays better wages than WalMart, Apple most likely provides better benefits than WalMart and Apple doesn't engage in the cutthroat business practices that drive their suppliers margins in to the toilet (and the supplier's employees wages alongside) and help to drive out small businesses and kill off jobs.