Apple's Grand Central Terminal Store Opens December 9th, State Probing Lease Deal

[MacRumors]

In line with previous rumors, Apple has officially revealed that its massive new retail store inside Manhattan's Grand Central Terminal will be opening on Friday, December 9th. The opening date was made official today with an updated message on the digital signage installed on the construction barrier surrounding the store.

Apple Store, Grand Central.
Arriving Friday, December 9.

One MacRumors reader has also provided us with an overhead shot of a portion of the store, revealing that Apple has installed the wood tables where it will display its products for customers to test out. A small portion of the store's Genius Bar can also be seen in the photo.




Meanwhile, in the wake of yesterday's disclosure of Apple's lease terms for the store, which total $60 per square foot and no revenue sharing with the Metropolitan Transportation Authority, The New York Post now reports that the State of New York is investigating the deal.

State Comptroller Thomas DiNapoli has launched an investigation into whether the Metropolitan Transportation Authority (MTA) gave Apple overly generous terms on its lease for the shop, which is slated for a splashy opening next week.

...

"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 in a statement yesterday. "This is a prime property, and I intend to make sure that the MTA hasn't given away the store."

The MTA has pointed out that Apple is paying four times the rent paid by the previous tenant, the restaurant Metrazur, and that Apple is investing in new infrastructure, including an elevator, to support the store.

In addition, Apple paid $5 million to Metrazur in order to buy out the restaurant's lease, with the MTA arguing that the payment makes Apple's 10-year lease on the store equivalent to $180 per square foot in annual rent. But even considering that payment, which does not go to the MTA, Apple's lease rates remain below that of many other tenants in the terminal and well below market rates charged in other prime shopping areas of Manhattan.

Article Link: Apple's Grand Central Terminal Store Opens December 9th, State Probing Lease Deal

[Keebler]

good for them!

I just finished the section in the SJ bio book where he started the retail stores and not caring about the costs involved, as long as the most foot traffic available was there.

And with traffic there, they'll hit the mark.

[gnasher729]

Let's say someone in the state of NY figures out that the contract is too generous to Apple. And they want more money. Doesn't matter. The contract is signed. If they want out, Apple will probably allow them to cancel the contract as long as they pay Apple back all the money that Apple invested. And then someone will figure out that this is a very, very expensive plan.

[matthewvb]

Wonder if Tim Cook will be in attendance...this is one of the biggest domestic store openings for the new CEO.

[ivladster]

That store is looking so weird in that place. It looks out of place without apple's glass, metal walls and concrete floors. I hope they make it more appealing.

[mattpol]

FYI on that digital sign display, it's an awesome array of many 27" Studio Displays!

[BladesOfSteel]

Okay, who actually owns the building? Does the City/State or is it privately owned?

I thought it was privately owned, but the article mentions that transit authority handled the deal.

If it is privately owned, then who cares what deal was made to get Apple in the door? I'm sure malls across the country give deals to certain retailers to come to their malls.

[johnnyrb]

Apple should pack up and leave and take their tax revenue with them.

[CalWizrd]

One can always count on NY State Democratic lawmakers to be investigating something that can generate high profile news stories. It's their eventual road to the governors office (Spitzer, Cuomo, etc.)

[Mess]

$60 per square foot! Wow! and thats 4 times as much as previous tenant!

[Rocketman]

As I posted in the other thread,

"So I took the time to actually read the underlying and related articles. Apple is paying 4x the rent the prior tenant was. In addition to that they built out an area that was not being rented at all to add square footage to the overall effort. It turns out this space is considered "oddball" because it is not formatted in a way very many tenants could find a way to make it work. While it is true they are not paying a percentage of gross in addition to rent, they are paying four times the prior rental rate to offset it."

http://forums.macrumors.com/showpost...&postcount=133

[Ca$hflow]

Why the hell is the state getting involved. Are they looking at creating some sort of price fixing? If apple payed for something over priced they wouldn't have cared. The state wants profit sharing? Why? What did the state do to justify profit sharing? They are overspending the way it is. Perhaps that's why their sniffing around for money. We so need less government.

[Some_Big_Spoon]

Money the store will bring in for the Terminal, and surrounding businesses, is why the MTA did this, which is smart. Kill the deal at this point, and Apple walks, you'll get a Forever 21 in there with a Starbucks attached.

Fast pennies or slow millions...

[sideburn]

Originally Posted by Mess

$60 per square foot! Wow! and thats 4 times as much as previous tenant!

It does sound like they are getting a good deal but it wasn't at zero cost to them.

[jmgregory1]

In the retail market, there is no such thing as being fair and equitable. Mall operators charge what they can, what the market and customer (store operator/owner) will bare. I've worked for a growing chain that got screwed in some cases - wanting to get into a location where the operator had no clue who we were and others where prime location and a sweetheart deal were offered because they wanted us in their space.

Unless the MTA has a mandate that says they must offer the exact same deal to each and every tenant/potential tenant - which I am guessing they do not, then the deal they struck with Apple is what it is.

The fact that the state is getting involved because of an article in a daily paper that clearly isn't telling the whole story shows just how broken our system is. Perhaps the state should keep its mouth shut until they know all the facts of the deal. The state just helped sell more newspapers and piss off yet more Apple haters. Yay.

[Mr. Gates]

The new iPhone is down that hole !

[eenuuk]

Originally Posted by Ca$hflow

We so need less government.

Or you could just do with a government that isn't in bed with the corporations and is corrupt as hell! Not all governments are like the US one, not saying you were implying that at all but seems to be a common fallacy in the US.

As for the deal, contracts signed, unless there is something far wrong in the US thats it done and dusted. As stated the in the article, they are paying more than the previous tenants/owners.... whats the state of NY going to do..... go to the previous bunch and ask them for back dated money!? Fair play to Apple in this case and I hope I can visit this store when next in NYC!

[Ca$hflow]

Originally Posted by Mr. Gates

The new iPhone is down that hole !


Image

I Laughed SOOOOO Hard!!

[johnnymg]

DiNapoli is just another grandstanding politician. His "inquiry" will go nowhere.

cheers
JohnG

[jmgregory1]

Originally Posted by Mr. Gates

The new iPhone is down that hole !


Image

Funny - isn't that the same hole where every copy of Windows has been tossed? Don't be afraid to jump right in - we swear it will still run your DOS based programs...

[ctdonath]

Originally Posted by Ca$hflow

Why the hell is the state getting involved.

The state's self-appointed nickname is "The Empire State" - and for good reason. (It's also the reason so many of us NY natives left, but I digress...)

[Yvan256]

Originally Posted by Mr. Gates

The new iPhone is down that hole !

1. funny
2. what is that from? A commercial? A TV show? A movie?

[Shrink]

Originally Posted by CalWizrd

One can always count on NY State Democratic lawmakers to be investigating something that can generate high profile news stories. It's their eventual road to the governors office (Spitzer, Cuomo, etc.)

Lucky thing no Republicans ever hype some relatively trivial story to garner cheap, high profile news stories. I know they're too morally upstanding to stoop to such low tactics.

It's only those dopey Democratic politicians who work the media for their advantage. Darn them for such crummy tactics.

[jclardy]

Originally Posted by ivladster

That store is looking so weird in that place. It looks out of place without apple's glass, metal walls and concrete floors. I hope they make it more appealing.

I think the point is to look "in place" inside of the historic building.

I don't think you can judge the look of the store from a crappy photo taken of store while in construction.

[Mak47]

So because the MTA "Ripped off" the taxpayers by signing a legally binding contract that is most likely irrevocable--the state government will spend more taxpayer money investigating it.

Nevermind the fact that at Apple's average of $5600 per square foot of revenue, this 23,000 sq foot space will generate over $11 million dollars in sales tax revenue alone for New York each year. That's around $478 per square foot if you're doing the math.

The simple fact is that Apple's stores generate exponentially more revenue than any other retail operation that would open there. The MTA could have paid Apple $50 per square foot to take the space and still come out ahead for New York. That doesn't even account for the boost that other retailers will see on top of what comes directly from Apple.

There is a reason why politicians run for office instead of running businesses or doing real work. They are incapable of it, and this is a shining example.