“State watchdogs are probing Apple’s sweet deal for a new store in Grand Central Terminal,” James Covert and Garett Sloane report for The New York Post.
“State Comptroller Thomas DiNapoli has launched an investigation into whether the Metropolitan Transportation Authority gave Apple overly generous terms on its lease for the shop, which is slated for a splashy opening next week,” Covert and Sloane report. “The probe comes in response to yesterday’s exclusive report by The Post, which noted that the cash-rich tech giant will be the only retailer among the 100 or so in MTA’s Grand Central Terminal not required to make revenue-sharing payments to the agency landlord.”
MacDailyNews Take: It’s called an “anchor store,” morons. The good ones generate foot traffic to surrounding retailers. The value of an Apple Retail Store is worth far more than just their lease payments. The MTA ought to be paying Apple to operate a store in Grand Central and the Comptroller ought to spend his taxpayer-funded time on something productive.
Covert and Sloane report, “What’s more, Apple’s 10-year lease for a space on the northeast balcony of the historic commuter hub overlooking the Main Concourse — which will amount to about $800,000 for the first year — is well below the rate being charged to many neighboring tenants, including the Michael Jordan’s Steakhouse that shares the balcony.
MacDailyNews Take: The Post’s dynamic tabloid duo should ask the steakhouse manager if he’d rather have an Apple Store next to his restaurant or not. Why don’t the intrepid muckrakers go ask FAO Schwarz how they like having Apple Store Fifth Avenue next door? Oh, right, those answers would defeat the premise of these two idiots’ ginned up “story.”
Covert and Sloane report, “‘Consistent with the Comptroller’s recommendations, the MTA moved proactively to maximize revenue and quadrupled the rent we receive for this unique space,’ MTA spokesman Aaron Donovan said of the Apple deal in an e-mailed response yesterday. The MTA noted that Apple is shelling out for infrastructure upgrades to the space, which will include a bank of elevators to hoist i-Pad-hungry [sic] shoppers to the balcony level.”
Complete piece – Think Before You Click™ – here.
MacDailyNews Take: Fishwrap.
Related articles:
MTA hands Apple sweet lease deal in Grand Central Terminal – November 30, 2011
Apple Store Grand Central Terminal to open on December 9, says source – November 23, 2011
Video of behemoth Apple Store Grand Central Terminal – November 23, 2011
Apple Store Grand Central Terminal, world’s biggest Apple store, prepares for grand opening – November 21, 2011
Bah Humbug!
More anti-business, liberal, idiocy. Liberals SUCK!!!!
You know what really blows? People like you, Kent. I’m a liberal myself, as are nearly all of my friends, and none of us are anti-business. We are anti-cronyism, which is what your favorite corporation, Halliburton operates under. I’m sure you roll over for all the giant banks that screw everyone over as well.
That said, yes, this sounds like a waste of time by the comptroller, or more likely, someone trying to justify their job, like those republicans in congress who spend all their time trying to regulate people’s private behavior and lives, or finding yet more ways to shield the super-rich from their follies.
You know what REALLY blows? Asshole liberals like you Ron. Making assumptions that conservatives are pro-Halliburton and making bold declarative disingenuous statements desperate to make a point you have zero solid ground to make. “I’m sure you… (fill in the moronic demotard cheap generalization)” statements just make you look like a stupid ill-informed jerk. Aren’t you going to somehow pull racism into your argument? All vacuous liberals do, but oh waitaminute, am I being too general? Golly!
Both parties are less then perfect buddy boy. It’s all too easy to rip Democrats and Republicans a new one. As a registered Democrat but more Centrist myself all I have to say is “don’t be too proud of this political party you’ve constructed’. They are both deeply flawed.
Ron, you suck. Like all liberals. Not much more to say. Either you get it or you’re a drone.
You really have no clue as to the editorial leanings of the New York Post. It’s a lying, right wing rag.
It’s not liberals causing the problems. Liberals are the ones shopping in the store for Apple products. It’s the republican bureaucrats doing the grinch on this one.
Typical ………everyone wants their hand in apples deep pockets .
Living in Upstate New York, I can tell you that is certainly how our illustrious state government works.
It’s about time for another attempt by Upstate to secede from NYC & Long Island. Hell, I’ll even let them have Rockland and Westchester Counties, to sweeten the deal.
I currently work at an insurance company, and doing business in NY is ridiculous. We often have two versions of each product: one for NY, one for the other 49 states.
What, no special version for Louisiana, to comply comply with their only-state-in-the-nation Napoleonic law? (As opposed to English law in every other state.)
That’s because NY State has specific protectionist laws to regulate insurance companies in NY.
Realistically, I doubt that Apple store will function like a traditional anchor store in a mall. The primary draw for the building is catching a train. It’s the largest train station in the world, and has enormous commuter traffic. “Trains” are Grand Central’s anchor store.
Outside of commuters shopping at the store, who are there anyway, customers would likely enter the building, shop at Apple, and leave. It’s unlikely that they’re going to travel to other floors and shop for whatever is there.
That said, I don’t think Apple should hand over a percentage of profits, because that sounds like a shakedown.
Au contraire. Shoppers will enter Grand Central just for the Apple Store and surrounding businesses will benefit immensely from having the Apple Store nearby. I guarantee it.
I understand the enormous effect of Apple stores in other locations, but I think this will be different based on several factors.
First, it’s NYC with tons of stores outside Grand Central that will actually be *closer* to the Apple store than many of the stores within GC.
Second, the Apple store in GC is somewhat isolated from other internal retail. You’d have to go down a floor or two to reach most other stores.
Third, the kind of stores within GC are not like the kind of stores within malls that benefit from proximity to an Apple store. Stores within GC are largely commuter-oriented: newspaper stands and fast food.
Finally, the foot traffic in GC is so enormous compared to a typical mall, that even Apple store traffic is drowned out by comparison. There are very few retail hubs in the world where that would be true, but GC is one of them (if not the only one).
True! Apple Store #3, Willow Bend, Plano, has carried the mall since it opened.
Apple store on 14th St. in New York, single handedly transformed the entire retail and restaurant scene in that hood.
Apple stores are better than Anchors, they’re magnetic anchors.
Apple Stores are more like black holes. They create enormous gravitational fields. You get caught a couple blocks away, and you think to yourself, hey, why don’t I stop into the Apple Store to see what’s new? In you go, and you only come out for fresh air an hour later with a bag on your arm.
A shakedown? Sounds like you don’t work in retail. A percentage of sales is not uncommon in malls and similar arrangements. It helps pay for operation, maintenance and improvements for the property and keeps rents a bit lower than they’d otherwise be. At least, that’s the theory.
Apple gets a percentage of the sale of everything at the App Store. Is that a shakedown, or just business?
@WriterGuy
I don’t work in retail and hadn’t thought about it like that. Frankly, I was thinking more along the lines of Tony Soprano’s business model when I wrote that. 🙂
“Trains are Grand Central’s anchor store”
Yup, they should have left it a piece of shit like it was so the street bums still to had a place to live, that’s not the liberal way. The liberal way is to let it run to the ground, get a movement to use taxpayers money to renovate it and still have a POS no one would dare rent. In the end, you have better bathrooms for the bums and cops.
What were they thinking.
Then you don’t understand destination retail. People make special trips to certain stores, like the Apple Store, sometimes just to browse. Neighboring stores benefit tremendously from the traffic.
if the NY bureaucrats in Albany make a big deal outta this, if I were Tim Cook, I’d just pull the store and put it in Penn Station. Fsck ’em.
Right on.
I only read the NY Post after the Jets lose or the Yankmes are eliminated from a series and then only the sports pages. It is fun to watch New Yorkers stab each other in the back.
Everyone needs to relax…..
Yes, Apple is an Anchor tenant. In some malls, good anchor tenants get free rent. And the traffic Apple will bring is worth free rent. So the fact they are paying is great.
Yes, all the stores would love having Apple there to bring other shoppers in.
Yes, Apple is paying for infrastructure upgrades whereas in most malls, the landlord pays for a lot of the upgrades and work (at least in this economy they are…I am a real estate agent and my office has recently done several big level deals).
But, at the end of the day, getting mad at the comptroller is silly. The tax payers pay a comptroller to do one thing and that is to “look into and supervise the quality of accounting and financial reporting”. The comptroller is just doing their job by double checking it. They will come to the conclusion it’s a good deal and move on.
Why is this news? Because it’s a way to make Apple look bad on paper for something when there is really nothing there. Media sucks sometimes. (well, none Apple fan-boy related media that is)
Those idiots would rather see a Microsoft store paying 3X the rent than an Apple store paying less. At least the guys at MTA know what they are doing.
No need to get mad at the Comptroller other than being manipulated by the shady Daily Post.
Apple gets a good footage rate because it’s, 1) an anchor, 2) it is making infrastructure improvements, and 3) it is taking a large space.
GCT might get a higher rate by finding 10 smaller tenants to fill Apple’s space, but that’s a lot harder than finding the most appealing retailer in all of NYC.
Wow, what a scoop! A retailer, which any commercial landlord would sell their mother to land, negotiated a better deal with the MTA than other tenants. Most of whom are likely thrilled Apple will be there anyway. Oh yes and they bought out the previous tenant who thanks to MTA screwups was paying a lot less for the same space. I think the MTA is a bunch of political hacks but here I can’t see how they did anything different than any other landlord worth their salt would have done. This is nothing more than the Post looking to make headlines using Apple’s name and polititians looking to get their name in the paper under the auspice of protecting the people. BS
correcto mundo.
Michael Jordan’s Steakhouse??? My, how the mighty are fallen!
I thought the Post was a grotty Murdoch, and by default pro-Republican rag?
Anyway, I’m guessing that like many government departments and agencies, once they receive a complaint, they are obliged under the law to investigate, whether there is validity in the complaint or not. Don’t blame the government. If it was anyone else you’d be whinging that the weren’t investigating fast enough. You can’t have it both ways.
Once all the facts come out, I’m sure the final report will show there is nothing to answer for.
You Merkins are an odd lot.
DiNapoli just ticked he didn’t get a piece of the action.
Apple is far too high a profile business to dick with much.
Isn’t the “Cube” the most photographed object/building in NYC?
He’ll squawk and squeeze, get a few free lunches maybe even shake a few more bucks from the Apple Money Tree.
Make a big deal of his “decisive victory” for the state of New York.
Then all will be well and the news cycle moves on.
If anyone knows the cost of installing an elevator, then you wouldn’t complain about Apple paying less in rent. I doubt Michael Jordon’s Steakhouse did any improvements beyond its own space. Apple has significantly mproved the area for all of the tenants, and not just by being there, for years to come.
I think it’s great that Apple was able to negotiate a great rate and not have to share a percentage of their sales. I also agree with the general sentiment here that Apple will draw additional foot traffic into the terminal by having such a large presence. In addition to that, the infrastructure improvements they are making will save the MTA money.
With that being said, the root cause of the investigation is simply the MTA itself. This quasi-government agency has been horribly wasteful for years. In 2009, the MTA asked for and received a “bailout” from the state to close it’s massive budget gap. That bailout included a motor vehicle registration surcharge, a driver’s license surcharge, a payroll tax of .34% on every employer in the MTA district (NYC, Nassau, Suffolk, Westchester, Rockland, Orange, Putnam and Dutchess Counties) among other things. Needless to say, this raised the ire of a lot of people. The comptroller’s office has since been auditing various aspects of the MTA because of the outrage. In fact, the NY Post reported on November 10, 2011 about how the Metro-North Signals unit had unnecessary overtime costs to the tune of $1M.
While I think that this may be the one time the MTA board may have thought with foresight, the comptroller noticed the Post’s splashy writing and is looking into it. Of course, since any news about Apple generates plenty of readers, the Post will always use that to their advantage. By the way, I don’t even find the Post fit for a bench blanket.