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

[JHankwitz]

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.

Looks like glass walls to me.

 

[ecphot]

as a NYer I see firsthand the MTA's chronic mismanagement and poor decisions.
these actions cost taxpayers millions of dollars. basically a fact of life here.
since the state owns the MTA (but doesn't run its day to day business) it in the state's best interest (taxpayers) to do the due diligence on this deal (for once). NYS has terrible budget problems and I fully support holding the MTA responsible for any poorly thought out deals it makes.

 

[thejadedmonkey]

I don't understand what the problem is with investigating it. This means the state will ask some questions, and decide if the transit authority is being screwed by Apple, or not. You people all think any questioning of Apple is like questioning Jesus, it's not. Grow up.

(I didn't point anyone out specifically, but I could have pretty much quoted the first page)

 

[daxomni]

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.

Being true to the needs of the taxpayers is mighty expensive when you don't bother to do anything to protect them in the first place and have to correct everything after the fact. But that's just how we doing things here. Well, when we do anything at all I suppose.

 

[divinox]

As i am not an american i really don't care. I have to say though, the reasoning shown in the article on how Apple pays Y therefore they're actually paying a lot is plain bogus. How is that relevant at all? The only thing that matters is: Is it a good deal for the MTA? If its the best they can do. Fine. If not, boo. But Apple paying this or that to someone else - irrelevant.

 

[Liquorpuki]

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.

The state is getting involved because the MTA is a public entity funded by state taxes. Next time subway fares are increased and the MTA says it's because they have no choice, it would be nice for New Yorkers to know the MTA really has its back against the wall. As opposed to trying to make up for doing things like giving away public property that could've been used as a revenue source.

 

[ThisIsNotMe]

I don't get it.
Its supply and demand.
The MTA had a supply of excess retail space and ZERO demand.
If the article is correct and there were no other proposals for the space then the MTA had ZERO leverage.
Apple had the upper hand.
Then again, I guess the MTA could have turned down Apple, stuck with the restaurant, and made less money. Wonder if the state would have investigated that decision.

But what should we really expect from the anti business Democrats in New York? If you can't charge/tax them to death what are business good for?

 

[wizard]

Big government is inherently bad, no matter where you are!

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.

This isn't the Federal government it is the state of New York. In that regards it is one of the worst examples in our country of what big government can do to its citizens.

This is the state of NY but frankly the position that big government sucks is reinforced constantly all around the globe. NY isn't much better than the government of Eygpt, Ireland or Sweden they all create grief for their citizens.

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!

This is certainly the case, the contract is signed and unless something illegal is found NY is once again wasting our tax dollars. It is really sad that politicians feel that they need to turn such things into a public spectacle to promote themselves. It really is disgusting at times when you see people using their office for self promotion.


As to visiting the store in NYC why even bother going there? There are 100's of cities worth visiting in the USA. Visit NY and you just fuel this stupidity we have with our government. it is sad to say but the only way to stop the election of such people is to cause real economic hard to the NYC area.

 

[SiPat]

EXIF data for the two images:

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GPS Latitude: 40.752 deg N / 73.977 deg W


Camera: Apple iPhone 4S
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GPS Latitude: 40.752 deg N / 73.976 deg W

 

[wizard]

The contract isn't one sided at all.

True...but just because a contract is signed does NOT mean it cannot be deemed null and void. There are thousands of "contracts" people sign every year, go to court, and the court finds the contract was never valid to begin with. Heck, I've signed a few in my life that I knew wouldn't hold water in any court...but they were more for the warm and fuzzy "ah, we have a committment here".

I'm not saying that will 100% be the case...but contracts can be overturned...especially government contracts that have been found to be illegal. Heck, all the folks who negotiated it could simply be fired.

It's hard to believe that this "contract" did not seem so 1-sided to the MTA. Taxpayers will be extremely upset.

The MTA should make out really well with this contract. Consider this they are getting 4x the original rate per square foot, in addition they are renting a considerable amount of idle space. On top of that Apple would have to be renting a considerable amount of storage space local to the store. In the end I wouldn't be surprised to find the MTA bringing in 6-8 times the previous rent. That from Apple. Apple should draw enough visitors to significantly increase sales at other businesses at the location.

 

[Rodimus Prime]

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.

If it is found out to be an bad contract it would be voided by saying it was illegal and as such a new one must be formed. As such the orginal contract was never binding.

I think it's yet to be seen whether MTA made a bad deal. It's quite common for malls to give the anchor stores (typically big department stores) more favorable leases than the smaller stores because it's the anchors that attract the bulk of customers to the mall who then shop at the other stores. Ever seen a mall where an anchor moves out? Usually that wing of the mall goes dead until a new anchor moves in. And the quality of the shoppers depends on the quality of the anchor.

I'd bet Apple will generate more revenue for the state in Grand Central, but we'll have to see. But right now MTA did not, defacto, make a bad deal here.

Yet I do not think even anchor stores would get this big of a sweat heart deal compared to everyone else. They may get a good deal but not that much better.
Also to be blunt an Apple store is not an anchor store. Sorry they serve way to limited of a market to be an anchor.

 

[wizard]

People are so dense.

How is it corrupt to get 4x the rent of the previous tenent? How is it corrupt to put idle floor space to use and get additional rent for it? How is it corrupt to get Apple to pay for significant building improvements? How is it corrupt to spot a store that will bring in significant tax revenue, far beyond any other?

I really don't understand this mentality. We are not dealing with advanced economic theory here, simple math is all that is required to understand that this is a huge win for everybody.

In any event where in the hell did extra costs come in here.

Issue is no matter what it sets a bad precedence. Doesn't matter who the client is it comes across as "corrupt" to make these types of deals. Who foots the extra costs? Usually us the tax payers.

 

[CalWizrd]

If it is found out to be an bad contract it would be voided by saying it was illegal and as such a new one must be formed. As such the orginal contract was never binding.

I guess you're not in the legal profession. There is no precedent to void a "bad" contract (I don't agree that it was bad, BTW) by magically declaring it illegal and then voiding its enforcement.

Deals are made every day that might favor one side or the other, and subsequently codified into a binding contract. Just because one side happens to be a state agency doesn't change this principle a damn.

 

[wizard]

What would be illegal about the contract?

If it is found out to be an bad contract it would be voided by saying it was illegal and as such a new one must be formed. As such the orginal contract was never binding.

There seems to be a theme here that something illegal transpired, but what is it?

Really I'd like to know because I'm seeing a lot of BS in this forum right now. The fact is this if this contract is in some way illegal then most of the contracts for that location must be illegal. After all the original restaurant was paying 4X less in rent.

Yet I do not think even anchor stores would get this big of a sweat heart deal compared to everyone else.

If you actually knew you wouldn't have bothered to post this garbage.

They may get a good deal but not that much better.

60$ per square foot would be considered excellent these days in many locations. It isn't exactly a booming economy out there, retail locations can be had for a song. Beyond that any business looking to rent retail space needs to negotiate terms, very few locations actually get the going rate these days.

Also to be blunt an Apple store is not an anchor store. Sorry they serve way to limited of a market to be an anchor.

Again you don't know what you are talking about nor understand terms. Anchor stores pull in people plain and simple.

 

[Rodimus Prime]

60$ per square foot would be considered excellent these days in many locations. It isn't exactly a booming economy out there, retail locations can be had for a song. Beyond that any business looking to rent retail space needs to negotiate terms, very few locations actually get the going rate these days.

In some locations. It is relative.

That location is is $200 per square foot plus revenue sharing.

Apple has $60 per square foot and no revenue sharing. Noticed an imbalance there.
But then again the simple fact that Apple is being question or facts pointed out about it not lining up gets the Apple defenders out in force.

 

[JAT]

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,

Um, a lease payout would indeed go to the lessor. Apple might pay Metrazur, but they would still have to pay MTA. Perhaps the $5m is on top of the lease payout?

 

[joneill55]

"Come on man", of all the things in New York that are broken, need repair and an investigation, this is not even on that list

 

[Liquorpuki]

How is it corrupt to get 4x the rent of the previous tenent? How is it corrupt to put idle floor space to use and get additional rent for it? How is it corrupt to get Apple to pay for significant building improvements? How is it corrupt to spot a store that will bring in significant tax revenue, far beyond any other?

None of those are innately corrupt. But the MTA is a public entity funded by NY taxpayers and transit riders. They're also a public entity that is 30 billion in debt and has regularly increased fares over the past 3 years. It's their duty to be fiscally responsible and maximize taxpayer return so they don't have to ask for another fare increase a year from now. It's also their responsibility to adhere to the legal standards that govern all public-private contracts.

It's the Comptroller's job to audit other government entities to make sure the money is flowing correctly. If the MTA did act in good faith for taxpayers and have the records to back it up, the Comptroller will find nothing wrong and the MTA will be off the hook.

 

[ufwa]

If New York government agencies are anything like California then its just smoke and mirrors.

Its nothing more than one body trying to justify its budget. "See. we are doing something."

 

[CalWizrd]

If New York government agencies are anything like California then its just smoke and mirrors.

Its nothing more than one body trying to justify its budget. "See. we are doing something."

I'm sure NY government agencies are just as bad as California government agencies, with the exception of having slightly less environmental looney tunes. Plus, the 9th Circuit Court of Appeals is proudly owned by the west (left) coast.

 

[JAT]

Yet I do not think even anchor stores would get this big of a sweat heart deal compared to everyone else. They may get a good deal but not that much better.

LOL!
Target and Walmart, for example, will attempt, at almost any cost, to PURCHASE the parcel on which their store will be. And then dictate easement terms to the seller, rather than the other way around.

If you don't know what I'm talking about...well, that should tell you something.

 

[rdowns]

None of those are innately corrupt. But the MTA is a public entity funded by NY taxpayers and transit riders. They're also a public entity that is 30 billion in debt and has regularly increased fares over the past 3 years. It's their duty to be fiscally responsible and maximize taxpayer return so they don't have to ask for another fare increase a year from now. It's also their responsibility to adhere to the legal standards that govern all public-private contracts.

It's the Comptroller's job to audit other government entities to make sure the money is flowing correctly. If the MTA did act in good faith for taxpayers and have the records to back it up, the Comptroller will find nothing wrong and the MTA will be off the hook.

You really think that the MTA getting $60 or $200/sf. would impact whether or not a fare hike is needed. Come on.

 

[wizard]

As an upstate New Yorker you are full of crap.

as a NYer I see firsthand the MTA's chronic mismanagement and poor decisions.
these actions cost taxpayers millions of dollars. basically a fact of life here.

I'm not sure how you can see this as anything other than positive for the MTA. As to mismanagement or simply mistakes, it happens all the time in business. If you are big enough and have the cash flow you recover from your mistakes. If you aren't you go under.

since the state owns the MTA (but doesn't run its day to day business) it in the state's best interest (taxpayers) to do the due diligence on this deal (for once).

You know at one time the phrase due diligence really meant something, now a days it appears to mean do it my way. The problem is often the do it my way crowd just doesn't know a thing about what is being discussed.

NYS has terrible budget problems and I fully support holding the MTA responsible for any poorly thought out deals it makes.

The vast majority of those budget problems are due to what? Let me tell you, NYC and the ignorance of the Democrat political party there. As someone that lives in upstate NY you need to realize that we see the entire NYC area as a cesspool of waste, apathy and laziness. Ny is no longer the empire state it is in fact a welfare state and a breeder of political corruption. This directly due to the unbalance in the political spectrum in the NYC area.

 

[rdowns]

The vast majority of those budget problems are due to what? Let me tell you, NYC and the ignorance of the Democrat political party there. As someone that lives in upstate NY you need to realize that we see the entire NYC area as a cesspool of waste, apathy and laziness. Ny is no longer the empire state it is in fact a welfare state and a breeder of political corruption. This directly due to the unbalance in the political spectrum in the NYC area.

Without NYC, NYS would be Tennessee.

NYC hasn't had a Democratic mayor since 1993.

 

[wizard]

Can you even read?

The article implied that Apple was paying 4x what the original tenent was paying so obviously the going rate isn't $200. More so they are renting space the authority couldn't rent before.

In some locations. It is relative.

That location is is $200 per square foot plus revenue sharing.

Apple has $60 per square foot and no revenue sharing. Noticed an imbalance there.
But then again the simple fact that Apple is being question or facts pointed out about it not lining up gets the Apple defenders out in force.

Don't be an idiot, we are talking about business here.