Terms of Apple's Sweetheart Deal for Grand Central Terminal Retail Store Revealed

[MacRumors]

The New York Post reports on some of the details of Apple's contract with the Metropolitan Transportation Authority (MTA) for its Grand Central Terminal retail store, noting that Apple received an extremely favorable deal for the space compared to other tenants at the terminal. Among the most significant concessions made by the MTA was a lack of any revenue sharing from what has been estimated to be a potential $100 million per year sales location.

But while real estate insiders estimate the shop will rake in $100 million a year in sales, Apple won't be sharing a nickel with Grand Central's operator, the Metropolitan Transportation Authority.

The tech giant is the only retailer in the fast-growing retail transit hub to have such a sweet lease.

Critics likewise note that Apple's $60-a-square-foot lease is well below what many other tenants are paying -- including a future Shake Shack burger joint that will be shelling out more than $200 a square foot, according to the leases, copies of which have been obtained by The Post.

All other tenants at the terminal with the exception of a Chase ATM branch pay a percentage of their sales to the MTA once an agreed-upon threshold has been reached. The MTA has apparently been willing to sacrifice such an arrangement in order to land Apple as a tenant, projecting that the company's presence will drive increased sales at many of the over 100 other retail stores at the terminal.

Apple's Grand Central Terminal retail store (Thanks, Tom!)

Apple has posted digital signage advertising the forthcoming store, with The New York Post having indicated that it will be opening on December 9th.

Article Link: Terms of Apple's Sweetheart Deal for Grand Central Terminal Retail Store Revealed

[ghostface147]

Now that is power. Getting special deals in primetime space.

[maflynn]

I question the legality of a public institution giving sweet heart deals like this. Doesn't seem in the best interest of the tax payers

[kiantech]

Rich get richer!

[Spectrum Abuser]

Knowing Apple the display panels for the words are really iPads running the special version of iOS for the show models. Wouldn't shock me.

[lightmyway]

Originally Posted by maflynn

I question the legality of a public institution giving sweet heart deals like this. Doesn't seem in the best interest of the tax payers

The MTA thought it was in the best interest of the taxpayers– that it would drive increased traffic/revenues to the other stores in the terminal. Not only legal, but great.

[julesj66]

A Shake Shack is coming to Grand Central?! Awesome! (though prob impossible to deal with!)

[TWSS37]

Because NY and it's municipalities are so flush with cash...

[duffer6]

Originally Posted by Spectrum Abuser

Knowing Apple the display panels for the words are really iPads running the special version of iOS for the show models. Wouldn't shock me.

I doubt it. Those panels are bigger than an iPad. Much bigger.

[gillybean]

I can see how it would help the other retailers nearby.

There's an apple store here that's next to a restaurant and I think I do eat more at that restaurant now because I can stop by the apple store before or after.

[maflynn]

Originally Posted by lightmyway

The MTA thought it was in the best interest of the taxpayers– that it would drive increased traffic/revenues to the other stores in the terminal. Not only legal, but great.

From the article

Still, the MTA didn’t estimate what kind of increase it expects, and some real estate experts are skeptical.

It seems not everyone agrees with that, especially since the MTA has no estimates or done any studies on what potentially that increase could be

[radge]

The store on 5th Ave is about a mile away. All this is going to do is give the people who already use grand central a place to buy Apple products. I doubt the other businesses in the station will be benefited much, people aren't going to go out of their way just to see the Grand Central store.

[jtsnyc47]

The biggest determiner in the price/sq ft difference between the Apple Store and the Shake Shack is the amount of space occupied. Apple's is 23,000; SS is 2,270.

You wouldn't know that by reading the article, but we are talking about the Post here. I guess it's remarkable that the words "mangled" "toilet" or "hooker" weren't somehow worked in.

[*LTD*]

Originally Posted by ghostface147

Now that is power. Getting special deals in primetime space.

It creates traffic for everyone else. Apple can draw crowds like no other.

Apple Store halo-effect.

[centauratlas]

There was a report on what they were and they were not iPads. It was linked to from MacRumors.

Originally Posted by Spectrum Abuser

Knowing Apple the display panels for the words are really iPads running the special version of iOS for the show models. Wouldn't shock me.

[jtsnyc47]

Originally Posted by radge

The store on 5th Ave is about a mile away. All this is going to do is give the people who already use grand central a place to buy Apple products. I doubt the other businesses in the station will be benefited much, people aren't going to go out of their way just to see the Grand Central store.

Like people going "out of their way" to see the 5th Avenue store? Manhattan is a densely-packed tourist magnet. There's going to be plenty of people there with no other agenda other than to see to the largest Apple Store in the world.

[puma1552]

Originally Posted by jtsnyc47

The biggest determiner in the price/sq ft difference between the Apple Store and the Shake Shack is the amount of space occupied. Apple's is 23,000; SS is 2,270.

You wouldn't know that by reading the article, but we are talking about the Post here. I guess it's remarkable that the words "mangled" "toilet" or "hooker" weren't somehow worked in.

The size has no relevance, it's not like a company with $80B in the bank can't afford $200/sq. ft. anyway. The commercial value of the real estate doesn't change due to the size of the place, not where I'm from anyway.

It's a classic case of the rich getting richer, and much like Apple's $7B quarters where half the people on this site practically cream themselves and then decry Apple when they cut enormous bonuses to their executives, people will do the same here--say how great and awesome and powerful Apple is, and then complain when they give the money to the top executives at the company.

[Gasu E.]

It's good to be the king.

[guzhogi]

Originally Posted by radge

The store on 5th Ave is about a mile away. All this is going to do is give the people who already use grand central a place to buy Apple products. I doubt the other businesses in the station will be benefited much, people aren't going to go out of their way just to see the Grand Central store.

Can anyone in the area tell me how crowded the 5th Avenue shop is? Just wondering how many people will think "The Apple Store on 5th Avenue is always packed so I guess I'll go to the Grand Central Station one instead."

As for Apple not paying the revenue sharing, how much do they pay for lease and does it go to the MTA? Just curious.

[rwilliams]

Originally Posted by *LTD*

It creates traffic for everyone else. Apple can draw crowds like no other.

Apple Store halo-effect.

We'll see how that goes. If this new store doesn't drive business to the other establishments in the terminal, the MTA is going to hear about it, and loudly.

[mutantteenager]

Isn't it great when public utilities bend over for big business. I feel like emptying my wallet into the hands of the next rich person I see....

[burjeffton]

Yikes... this feels slimy. If it was a company like Walmart people would be rioting.

[mutantteenager]

Originally Posted by *LTD*

It creates traffic for everyone else. Apple can draw crowds like no other.

Apple Store halo-effect.

....and on the seventh day Apple rested on a huge pile of money.

It's just a shop, of which there are many.

[Rafterman]

Originally Posted by puma1552

The size has no relevance, it's not like a company with $80B in the bank can't afford $200/sq. ft. anyway. The commercial value of the real estate doesn't change due to the size of the place, not where I'm from anyway.

It's a classic case of the rich getting richer, and much like Apple's $7B quarters where half the people on this site practically cream themselves and then decry Apple when they cut enormous bonuses to their executives, people will do the same here--say how great and awesome and powerful Apple is, and then complain when they give the money to the top executives at the company.

A sweetheart deal for Apple where NY is practically giving away the space. Meanwhile, NY will continue to blame its budget shortfalls on pension outlays, unions and other hardworking New Yorkers for "not doing their fair share". Even though NY is already the highest taxed state in the union

[gillybean]

Originally Posted by Rafterman

A sweetheart deal for Apple where NY is practically giving away the space. Meanwhile, NY will continue to blame its budget shortfalls on pension outlays, unions and other hardworking New Yorkers for "not doing their fair share". Even though NY is already the highest taxed state in the union

How is this a "sweetheart deal" when they didn't get any other bids for the space, and they'll now making 4x more from that space than they used to?