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MTA on State Investigation of Apple Grand Central Terminal Deal: 'Bring It On'

goodcow said:
Do you realize what the MTA's budget is? Any money from this deal is more or less a rounding error for the MTA.

Also keep in mind that the ridership on the Lexington Avenue line alone (4, 5, 6) is higher than the ENTIRE ridership of the CTA (Chicago Transit Authority). The amount of people the MTA moves everyday is far greater than any other transit authority in America.



This is in large part due to the $30B or so of outstanding debt the MTA has, in large part due to Governor Pataki and Mayor Bloomberg cutting transit subsidies. Pataki essentially told the MTA to put the capital program on a credit card (bonds) and now about 20% of the MTA budget alone goes to paying down old debt. How can anyone manage an organization when 20% of their budget is tied down like that?



Top level executive pay doesn't keep going up. MTA Headquarters (non-union) employees have had their pay frozen and many jobs have been slashed. If you think $300K a year is excessive for somebody running the largest public transportation system in America, then you're ignorant.

As to the pensions, the amount of money going into the pension funds has been increasing because Wall Street decided to gamble everyone's money and there was that large crash you may have remembered a few years ago. If Wall Street were better regulated, the pension fund wouldn't have lost massive amounts of money and thus needed to be shored up financially.

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http://secondavenuesagas.com/2011/09/22/on-debt-a-comptrollers-report-reveals-the-obvious/

Oh hey, 18% of the budget is going to bankers to pay down debt. God damn unions.

The increased pension costs can also be attributed to Wall Street's decline, thanks to wreckless bankers and lack of regulation.

Healthcare costs are going up for everyone because the healthcare system is entirely broken in this country.

But it's okay, let's blame the unions.
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$300,000 per year is excessive for anyone, except maybe the President of the United States and governors of the largest states and even then, it might be too much. I would say $100,000 per year should be good enough for any public sector job aside form those listed above and that is assuming there are absolutely no other benefits. How much do you need to live anyway?

18% of the budget is going to pay down debt? That's it? Really, should be at least 25% of the budget.

The unions are a major part of the problem, they prevent you from firing people who are doing a bad job, insist on pay raises for everyone, even when those in the private sector are having to take pay cuts, insist on hiring more people, even when there are lay offs elsewhere, etc. All of this does cost money.

Bottom line is greed is what is the source of the problem.
 
This is good news...

:)I commute into Grand Central for work, and am thrilled about this news. Here's why:
1) Riding the train, you see iPads and iPhones everywhere. Apple knows their demographic. Why not be present in a space where most commuters will see them every weekday? Brilliant move, Apple.
2) This will definitely increase foot traffic to GST and help out other retailers in the area.
3) The MTA increasing revenue is a good thing. Much of the equipment,e.g. trains, are old and needs constant maintenance and eventually replacement. These capital expenditures add up significantly, and I would be surprised if we didn't have hikes every year. Yes, of course there is waste. Every large company has some. However, you cannot expect a reliable service without the affiliated costs, and it is reliable. Good for MTA for taking initiative instead of waiting for handouts from the Federal and State governmentsw.
4) Apple is an international brand, and the plethora of tourists that flock to Grand Central will be delighted to kill two birds in one stone - visit and shop at a flagship American brand's store and sightsee as well. It will enhance their experience.
 
when people say the apple store will increase foot traffic thus benefiting other stores:
its GRAND CENTRAL STATION!

the place is packed at all times as it is. I would say from going there that its is too congested to shop comfortably right now.
 
levitynyc said:
With all that extra revenue, tolls for bridges and tunnels will be less and their will be better train service right?

For those not from the NYC area, the MTA is the most corrupt and mismanaged entity in the city. Fares and tolls keep going up and service continues to go down. Top level executive pay keeps going up as does the amount of money put into pensions of the lazy employees.

In the end, the public loses.
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Sounds like pretty much like every financial institution in the US as well as most of the enterprises traded on the NY Stock exchange. While this does not excuse the MTA, it does point out the fallacy that only government organizations are FUBAR.
 
BC2009 said:
If MTA had not made this deal what other "competitive bid" would have been better? Who else was going to buy out the existing tenant's eight year lease and replace it with a ten year lease at four times the rent and do their own improvements.
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That's why you put a contract out for bid, so you can find out who's interested. If Apple was the only company who bothered to submit a bid, then whatever dollar amount they bid is legal as long as they meet the bid requirements. They could've probably low-balled the rent even more.

If both Apple and some other company submit a bid, whoever submits the higher bid is supposed to win. IE if some other company said, I'm willing to pay for everything that Apple said they'll pay for in their bid, have the brand recognition to generate the same amount of foot traffic, plus I'm willing to pay 8x the rent instead of 4x, the MTA is legally required to go with the other company.

If no other company was allowed to bid except Apple, or another company submitted a higher bid but was ignored, that's a sweetheart deal and it's illegal. That's what the comptroller is trying to find out.
 
paulrbeers said:
I know Apple makes a crap load of money each year, but does any one wonder if Apple will make back all the money they spent on this location based on sales at this location? They must be expecting a staggering amount of sales from this location or they look at their retail sales as a whole, meaning even if a location loses money, getting products into more people's hands/word of mouth is worth taking a hit here...
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Average sales numbers are about $35 million per store and per year, which translates into about $10 million gross profit. 20,000 square feet is larger than average, and it seems to be a very good location, so I'd expect more than that. Which means they get their investment back in a few months.


paulrbeers said:
Revenue generated vs profit though. Salaries alone in the New York area could eat most of that! That's all I am saying.
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Apple's gross margin numbers are well published and generally around 35%. "Gross margin" is defined as the difference between what you sell your products for, and the cost of producing the product, the cost of selling it, and all the cost that results from the sale (like warranty repairs). If "salaries alone would eat most of that" then your profit margin would be zero.
 
cmwade77 said:
$300,000 per year is excessive for anyone, except maybe the President of the United States and governors of the largest states and even then, it might be too much. I would say $100,000 per year should be good enough for any public sector job aside form those listed above and that is assuming there are absolutely no other benefits. How much do you need to live anyway?
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Holy crap! This is a joke, right?

$300,000 is excessive for anyone? Are you serious? Are you occupying somewhere right now?
 
Newspaper Journalism

I've been interviewed by a few newspaper journalists and dealt with a few others. Newspapers put out news daily. They are not a weekly TIME magazine, and certainly not a peer reviewed journal.

With that said, the newspaper could have investigated more to find that Apple is paying effectively $180/square foot. Rather, they reported $60/square foot.

On the flip-side, by not doing the research -- being rushed to get the news out NOW! -- they were able to report the news, ... plus have been able to have 1-3 follow-up stories to clarify. So, its of course about selling more papers.

Then again, my "subscription" to MacRumors.com never seems to fail! Support this website by visiting its advertisers. With the ability to (hyper) link to other articles, MacRumors sets things straight. That's something newspapers can't do and seem to "overlook." Oh, we were wrong?
 
cmwade77 said:
$300,000 per year is excessive for anyone, except maybe the President of the United States and governors of the largest states and even then, it might be too much. I would say $100,000 per year should be good enough for any public sector job aside form those listed above and that is assuming there are absolutely no other benefits. How much do you need to live anyway?

Bottom line is greed is what is the source of the problem.
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I assume this is a joke. But do you really think you are going to get quality people to hang around and work at the MTA for years so they can make it to the top and make $100,000 a year? In NYC?!?! Honestly, you would have a hard time hiring college graduates if you told them end game, if they got the promotions and moved through the ranks, was $100,000 a year. Only teachers have college degrees and work for that type of money and you need to offer them summers off and tons of vacation time during the year to get people to do that job. Trust me, executives at the MTA are working much longer hours than teachers.

If you wanted to staff the MTA with guys directly out of college, $100,000 would do it. You want someone with 20 years + of experience running large enterprises, well you are going to have to pay more than $100k.
 
There is a bigger meaning to this.

Apple is an "Anchor" store.

This is an impressive development for Apple.
 
cmwade77 said:
18% of the budget is going to pay down debt? That's it? Really, should be at least 25% of the budget.
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Why should it be *at least* 25% of the budget?

As the debt is bonds, that would either mean

a) MTA has borrowed more (irresponsible)
b) The bonds were junk (irresponsible) or
c) you're reducing their operating budget (are you ready for the mass layoffs and service cuts?).

You don't pay more than you promised on a bond.

Running a railway costs a phenomenal amount of money on maintenance alone. Being a mass transport industry a failure at best costs people's time, and at worst people's lives.

It sounds like people are moaning that the service is degrading, so they are paying too much down on the debt to keep their service level consistent but it is likely their minimum obligation. Something has to give to do that. To maintain a safe operation, they would have to literally close lines or severely reduce service. Neither would be a good option.
 
cmwade77 said:
$300,000 per year is excessive for anyone, except maybe the President of the United States and governors of the largest states and even then, it might be too much. I would say $100,000 per year should be good enough for any public sector job aside form those listed above and that is assuming there are absolutely no other benefits. How much do you need to live anyway?
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Wow. Do you live in New York City? Do you realize the cost of living here?

You think the person in charge of a $10+ billion budget should make a maximum salary of $100,000 a year? Are you delusional? You expect to attract competent talent at that salary? Even $300,000 is low considering the scope of the job.
 
Liquorpuki said:
The state controller's job is to audit the money trail of state agencies. Any project that gets politicized by the media automatically goes to the top of the list for practical reasons. The guy's just doing his job. And he doesn't care about Apple - he's not a lawyer, there's nothing he can do to Apple. All he cares about is whether the MTA is doing something stupid.



If the deal was normal, the MTA will have records on file to prove it. Then once the audit is completed, the Comptroller will issue a report concluding it was normal.
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Here is how the comptroller could have handled it:

ring calls the MTA top honcho:

Hey, (Bill/Bob/Jim whatever his name is)
I don't know anything that went on during your negotiations with Apple, but it's being made out as if it is a sweetheart deal.

BBJ: Obviously people without the details. Explains details.
So, in summary 1.1 million a year for 10 years plus fringe benefits for all the others sales tax etc.

Comptroller: And we have the papers to prove this?

BBJ: Yep watertight.

Comptroller: Okay , good enough for me!
Go back to raising rates at bridges and tunnels, (laughs)

BBJ: Okay, btw I can hook you up with a few iphones and ipads etc. if you like. They "donated" a few for review.
Have them right on my desk....................

Comptroller: Let's not waste any money, but FEDEX overnight 8 a.m. delivery please
 
cmwade77 said:
$300,000 per year is excessive for anyone, except maybe the President of the United States and governors of the largest states and even then, it might be too much. I would say $100,000 per year should be good enough for any public sector job aside form those listed above and that is assuming there are absolutely no other benefits. How much do you need to live anyway?

18% of the budget is going to pay down debt? That's it? Really, should be at least 25% of the budget.

The unions are a major part of the problem, they prevent you from firing people who are doing a bad job, insist on pay raises for everyone, even when those in the private sector are having to take pay cuts, insist on hiring more people, even when there are lay offs elsewhere, etc. All of this does cost money.

Bottom line is greed is what is the source of the problem.
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No, you are flat out wrong and i disagree with you. Perhaps you are just jealous. Most people want to receive as much money as they can for their services. Take the NBA players and players in other sports for instance. Take a look at the salaries and benefits of the people at the top of corporations. They make millions if not hundreds of millions in stock options etc. Look at what the Disney guy will make as a new Apple Board member. Take a look at actors, etc. I am a government worker and make about $150K per year because I am at the top of my profession. I live comfortably in a high cost area but not lavishly. But, if I could find a job I enjoy as much and make $300K I would take it. If there is a demand for your services at a high price, then take it. Nothing wrong with that. To say that $100K is enough for any public servant is to not understand simple economics. If the demand is high for a commodity, then the cost goes up. If there is a high enough demand for theses MTA administrators, then they get paid correspondingly. If their job can be done with cheaper people, then they will be replaced eventually. If we underpay public servants, we then get crappy people who mismanage things that ends up costing us more in the short and long run. Maybe that is the problem with MTA, they are not paying enough for the top administrators and all they have are crappy administrators in underpaid positions.
 
cmwade77 said:
$300,000 per year is excessive for anyone, except maybe the President of the United States and governors of the largest states and even then, it might be too much. I would say $100,000 per year should be good enough for any public sector job aside form those listed above and that is assuming there are absolutely no other benefits. How much do you need to live anyway?

18% of the budget is going to pay down debt? That's it? Really, should be at least 25% of the budget.

The unions are a major part of the problem, they prevent you from firing people who are doing a bad job, insist on pay raises for everyone, even when those in the private sector are having to take pay cuts, insist on hiring more people, even when there are lay offs elsewhere, etc. All of this does cost money.

Bottom line is greed is what is the source of the problem.
Click to expand...

This man is right. Those of you who argue that the cost of living is too high to live on anything less is BS, utter and complete. My mom lives on around 68k a year and barely gets by, we live in brooklyn btw. 100K would give us plenty of room to breathe. These people don't need 300k; They just don't. Unions demand far more than is reasonable, that's the plain and simple fact. The people who work under unions love it, but at the end of the day, the public suffers, because firing anyone who's a member of a union is extremely hard. It's similar to the issue with tenured professors who are no longer productive: You can't fire them. I don't see how this is so hard to understand. You can live in NYC with 100K a year, just don't live in manhattan. You just can't be right while simultaneously disagreeing with these points. It's the way this part of the world works...
 
Liquorpuki said:
iconic Apple stores are like tourist attractions in themselves.
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No kidding. Couple weeks back, some crooks drove several hours from Tennessee to Atlanta just to whack an Apple store. (The store is built like a bank vault though it doesn't look it. They're now on extended holiday at Graybar Hotel.)
 
paulrbeers said:
I know Apple makes a crap load of money each year, but does any one wonder if Apple will make back all the money they spent on this location based on sales at this location? They must be expecting a staggering amount of sales from this location or they look at their retail sales as a whole, meaning even if a location loses money, getting products into more people's hands/word of mouth is worth taking a hit here...
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you have obviously never been to Grand Central Station. the metro-north railroad ends there and the LIRR is coming in a few years
 
DESNOS said:
This man is right. Those of you who argue that the cost of living is too high to live on anything less is BS, utter and complete. My mom lives on around 68k a year and barely gets by, we live in brooklyn btw. 100K would give us plenty of room to breathe. These people don't need 300k; They just don't. Unions demand far more than is reasonable, that's the plain and simple fact. The people who work under unions love it, but at the end of the day, the public suffers, because firing anyone who's a member of a union is extremely hard. It's similar to the issue with tenured professors who are no longer productive: You can't fire them. I don't see how this is so hard to understand. You can live in NYC with 100K a year, just don't live in manhattan. You just can't be right while simultaneously disagreeing with these points. It's the way this part of the world works...
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Cost of living is fine for 100k is fine but you still have to pay people what they're worth. Unlike private industry which is just bottomlines, the managers that make $300k+ are responsible for making sure your trash gets picked up, your public transit works like clockwork, and that murderer running around your hood gets arrested. You want to lowball them so they jump ship to private? Then don't complain when they bring in some cheap replacement who doesn't know what he's doing and your city's essential services and infrastructure goes to hell.
 
typical

There's always a politician ready to step in and "save us from all these greedy corporations".

In truth, there are cases of abuse, but the politicians are always chasing a herring and never able to find, understand and fix the real problems, they only seem to make life more difficult for legitimate business.
 
cmwade77 said:
$300,000 per year is excessive for anyone, except maybe the President of the United States and governors of the largest states and even then, it might be too much. I would say $100,000 per year should be good enough for any public sector job aside form those listed above and that is assuming there are absolutely no other benefits. How much do you need to live anyway?

18% of the budget is going to pay down debt? That's it? Really, should be at least 25% of the budget.

The unions are a major part of the problem, they prevent you from firing people who are doing a bad job, insist on pay raises for everyone, even when those in the private sector are having to take pay cuts, insist on hiring more people, even when there are lay offs elsewhere, etc. All of this does cost money.

Bottom line is greed is what is the source of the problem.
Click to expand...

$10million yes, but no way is $300,000 excessive. Also, this is NY, $300,000 isn't that much...
 
DESNOS said:
This man is right. Those of you who argue that the cost of living is too high to live on anything less is BS, utter and complete. My mom lives on around 68k a year and barely gets by, we live in brooklyn btw. 100K would give us plenty of room to breathe. These people don't need 300k; They just don't. ... You can live in NYC with 100K a year, just don't live in manhattan. You just can't be right while simultaneously disagreeing with these points. It's the way this part of the world works...
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You folks just don't understand, do you? Compensation packages are not structured based upon the "minimum required to live on" amount. They are based upon the duties and responsibilities attributable to the position, the size of the budget being managed vs. the risk of an under qualified individual trying to manage that amount, the tactical and strategic planning requirements and the experience level necessary to perform, etc.

This isn't flipping burgers at Mickey D's. Wow. Talk about naive!
 
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