Following yesterday’s report from the New York Post detailing Apple’s lease with the MTA for their new Grand Central retail store, State Comptroller Thomas DiNapoli plans on looking into the deal and ensuring “MTA hasn’t given away the store”. Other state officials are raising concerns as well. Yesterday DiNapoli issued a statement (via New York Post):
The article in the New York Post about the MTA’s contract with Apple in Grand Central Terminal is a cause for concern. This is a prime property, and I intend to make sure that the MTA hasn’t given away the store.
Yesterday we found out that the MTA has given Apple a bargain on its lease for the new retail store at just $60 per square foot– approximately $800,000 during the first year– in comparison to the $200+ per square foot most other tenants pay. However, the MTA doesn’t necessarily agree with DiNapoli’s concerns, who has also performed an audit of the MTA in the past finding mediocre real-estate practices, and issued a statement regarding the issue. While pointing out Apple paid $5 million up front to restaurant Metrazur to move into the northeast balcony space, MTA spokesman Aaron Donovan had this to say in a statement:
Consistent with the Comptroller’s recommendations, the MTA moved proactively to maximize revenue and quadrupled the rent we receive for this unique space… They are effectively paying $180 per square foot over the 10 years of the lease, almost 10 times the previous tenant.
State Senator Tony Avella told CBS 2′s Tony Aiello (via CBS) he thinks taxpayers are being ripped off in the deal:
There needs to be an investigation of who negotiated this deal. The taxpayers of this state are being ripped off that Apple is getting this sweetheart deal.
DiNapoli’s concerns are understandable given last year’s audit of the MTA found the previous tenant, restaurant Metrazur, was given $2.4 million in lease concessions stemming from the MTA failing to meet a lease provision where the space would be kept at a particular temperature. The MTA apparently didn’t do the proper research before signing the lease with Metrazur and that lead the state to warn the MTA about their real-estate practices:
There was no evidence the MTA had conducted such a study before accepting the tenant’s request for the lease provisions,” the audit found. We recommend the MTA ensure such special lease provisions are, in fact, practicable before it commits to them.
Apple has now confirmed on the store’s temporary signage it will officially be opening on December 9. MacRumors also posted this overhead shot (below) showing off the product demo tables and a portion of the Genius Bar.