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

gillybean said:
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?
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It's a sweetheart deal if it shows favoritism. Lack of revenue sharing = favoritism. The revenue sharing could have been mandated in the contract that went out for bid, like it was for every other space in the terminal, but it wasn't.

Also wondering how you know there were no other bids for the space.
 
maflynn said:
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
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I question the legality of the MTA being able to charge a lease and a percentage of the revenue. When the mafia does that, it's called racketeering.
 
RobNYC said:
Not really since the MTA is hurting for cash. They'll just raise the rates on all the commuters again to compensate for their bad financial dealings. This isn't an isolated incident either, they're notorious for pissing away money and giving sweetheart deals.

http://www.sheepsheadbites.com/2011/05/how-political-deals-have-shortchanged-the-mta/
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Oops.

Somebody has to look out for the special interests of the 1% corporations.
I bet the iChristmas gadgets will be crowded under the trees of the MTA mafia.
 
macus3r said:
Wait... They seriously estimated only $100million in sales per year for this location? /facepalm

This store will do at least $750mm-1 billion/year, easily. Stupid move on the MTAs party.
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ahahahaha.

you realize that all their stores combined for 14 billion for all of their last fiscal year.

This location isn't going to be bring in anywhere close to 750 million.
 
This all only makes sense; this way more people will be in the area and therefore more likely to purchase goods/services from surrounding shoppes.
 
It's standard for retailers to pay a percentage of sales after hitting a certain threshold. Apple is one of the few who don't have to.
 
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aristotle said:
I question the legality of the MTA being able to charge a lease and a percentage of the revenue. When the mafia does that, it's called racketeering.
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Exactly. Honestly, there is so much corruption with the MTA, who gives a crap about this? It's better than giving more money to the MTA and government to misspend.

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rwilliams said:
And if they don't?
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Life will go on.
 
radge said:
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.
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What about the millions of tourists who goto Grand Central each year? This is a great opportunity to draw even more in. This will be good for everyone.
 
GQB said:
Proof please?
Seriously, the tin foil hat crowd is out in full force today.
This store will drive more affluent buyers into nearby stores and produce more revenue per sq foot than any rental scalping could accomplish.
Apple stores, particularly this one, are destinations.
Go find a bank to occupy.
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That might make sense if this was a mall but it's not, its a major train station. They already have the foot traffic built in. Adding an Apple store isn't really likely to change the amount of pitas Eata Pita sells.

In fact it's more advantageous for Apple to open a store there than for the MTA to have it there.
 
vitzr said:
Now that is Blantant Greed.

Apple: The Company That Takes & Takes & Takes.

As Nefarious as Big Oil.. ha.. ha.. :)

All Hail Apple.
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You really must hate Apple. But since Apple cannot force anyone, including the MTA, to enter a lease contract on the terms that Apple demands, it would seem that the terms were satisfactory to the MTA. And you can bet that the MTA now has a station that is a lot more attractive then it was before.


macus3r said:
Wait... They seriously estimated only $100million in sales per year for this location? /facepalm

This store will do at least $750mm-1 billion/year, easily. Stupid move on the MTAs party.
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Well, of course. They will be selling one iPad every 20 seconds, 24 hours a day, 365 days a year. About 1.5 million a year. As you say, /facepalm.
 
lightmyway said:
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.
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Since when does MTA actually think? It is the most corrupt useless corporation in existence. Of course these morons decided that this is a good idea.
 
Liquorpuki said:
It's a sweetheart deal if it shows favoritism. Lack of revenue sharing = favoritism. The revenue sharing could have been mandated in the contract that went out for bid, like it was for every other space in the terminal, but it wasn't.

Also wondering how you know there were no other bids for the space.
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Apple bought at the existing lease at a big premium. It still had many years remaining. This was not a property that was on the market. Apple approached the lessee and the MTA. Other bids are highly unlikely.
 
Thunderhawks said:
When somebody leases space/a store to sell something they do not owe anything to the landlord, but the rent (and whatever is included in that number).

By your logic a landlord would have to participate in a stores' losses.
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aristotle said:
I question the legality of the MTA being able to charge a lease and a percentage of the revenue. When the mafia does that, it's called racketeering.
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You guys must not be familiar with the retail marketplace. Percentage rent is the rule, Apple is apparently an exception.
 
RobNYC said:
That might make sense if this was a mall but it's not, its a major train station. They already have the foot traffic built in. Adding an Apple store isn't really likely to change the amount of pitas Eata Pita sells.
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Since when is it Apple's obligation to increase business for other organizations? No one cares about a pita pit or a shake shack. Giving Apple a discount is a marketing move to make the overall area there more appealing. People love Apple stores especially ones in unique locations like this- why not leverage that?
 
I'd wager that many of those who are posting responses have _never_ been to Grand Central Station. If you had, your response would possibly be quite different.

It's easy to sit back fantasizing an Apple Store being of great interest to the general population. Then again you might be shocked to know many passers by could care less. They don't eat, breathe, and sleep all things Apple.

To actually think it's a destination is a bit wacky. Apple stores are becoming as common as WalMart.
 
MacRumors seems to be catering to the anti-Apple crowd recently. All these incorrect inflamitory headlines are just too much.
 
*LTD* said:
It creates traffic for everyone else. Apple can draw crowds like no other.

Apple Store halo-effect.
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All this talk about bringing in traffic to Grand Central Station is funny.

Hasn't everyone said "Man, that place was like grand central station" before to refer to a place that is heavily trafficked?!!?!?

J
 
guzhogi said:
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.
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5th Avenue is usually teeming with tourists. Grand Central may get a mix of tourists, suburbanites coming in from Connecticut (en route to or from shopping trips elsewhere), commuters passing through, and people living in Midtown and Murray Hill who don't want to walk all the way to 59th Street.

The 59th Street store is just outside Central Park in a location of similar prominence. Based on the size of the store, Apple is paying about $1.4 million per month for Grand Central, or just shy of $17 million vs $20 million or so for 59th Street (if the $5 million plus $15 million revenue share is accurate).

Based on those figures, the Grand Central deal doesn't look quite as bad for the MTA as the headline makes it out to be, but perhaps they could have done a little better. I doubt the restaurant that occupied the space before was paying what Apple is.
 
gillybean said:
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?
Click to expand...

Oh please. Apple would have paid them almost anything for the space. It was corporate welfare, plain and simple.
 
macus3r said:
Wait... They seriously estimated only $100million in sales per year for this location? /facepalm

This store will do at least $750mm-1 billion/year, easily. Stupid move on the MTAs party.
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LOL!!!! If the average sale was $1,000 (it wont be even close to that) they'd need 2,739 sales per day being open 365 days/year to hit $1 billion or $3,000 per minute if they were open 14 hours a day.
 
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