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New York state investigating Apple's low-cost Grand Central lease - Page 2

post #41 of 85
Quote:
Originally Posted by SDW2001 View Post

That's such liberal, deluded thinking on the state's part. They apparently didn't see the part where the MTA said it was making 4x as much as it was. It's never enough for these people. We need more revenue! Let's raise taxes to get it! The short-sightedness is unreal.

I disagree. If Apple is paying $60 a square foot (which is unheard of for prime Manhattan retail space) and the previous restaurant was only paying $15 a square foot, then that was a crime as well and should have been investigated. $15 (if real) is so incredibly low, it has to make me wonder if there wasn't some payoff involved. But $60 a square foot is incredibly low and is definitely worth an investigation. I find it easy to believe that other retailers wouldn't have wanted to pay $5 million to the restaurant to buy them out of their lease, but there would be plenty who would be willing to pay far more than $60/sq ft.

Income from rental property is not the same as raising taxes. That is prime real-estate and Apple should be paying market rate (or close to it). Every penny the MTA takes in rental income offsets future costs and fare increases. That income should be maximized, otherwise taxpayers and commuters are in essence, subsidizing the Apple store. I like Apple, but the only way I want to subsidize them is by buying their products.

Furthermore, I wonder what kind of signage there's going to be up there because after the Terminal was renovated, the policy was there was to be no advertising in the main hall. Kodak used to have a giant mural on that side of the terminal and it was taken down during the restoration for that reason. I wonder if Apple gets to violate that.
post #42 of 85
Quote:
Originally Posted by jragosta View Post

- Apple is paying for significant improvements to the facility

So does most everyone else who rents retail space. And when they leave, the space will need renovated again. Unless they're refurbishing the entire station (or at least the floor they occupy) this really isn't much justification.
post #43 of 85
Quote:
Originally Posted by Conrail View Post

So does most everyone else who rents retail space. And when they leave, the space will need renovated again. Unless they're refurbishing the entire station (or at least the floor they occupy) this really isn't much justification.

From the summary: "Apple is also bankrolling infrastructure upgrades, including new elevators."

If you bothered to read even the summary, you would have seen this goes beyond renovating the rented space.
post #44 of 85
This investigation makes it look as if Apple didn't do enough to grease the wheels.
post #45 of 85
Quote:
Originally Posted by Jetz View Post

How is ensuring that a state owned property gets the maximum rent that it can equal raising taxes?

I don't think Apple's done anything wrong with this deal, other than negotiate really hard. And I don't think anything will come of this investigation.

But if the MTA has signed a bad deal for itself, would you not, as a taxpayer, be concerned that they squandering a publicly owned resource (space at the sation) by effectively subsidizing a private corporation with a sweetheart deal? Isn't accountability of government a good thing?

Considering no one else submitted a bid for this space, the MTA should be planting kisses on Apple's shiny metallic ***.

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post #46 of 85
Quote:
Originally Posted by techguy911 View Post

From the summary: "Apple is also bankrolling infrastructure upgrades, including new elevators."

If you bothered to read even the summary, you would have seen this goes beyond renovating the rented space.


this is fairly normal in NYC. a lot of the escalators in the subway are owned by private corporations
post #47 of 85
Quote:
Originally Posted by zoetmb View Post

I disagree. If Apple is paying $60 a square foot (which is unheard of for prime Manhattan retail space) and the previous restaurant was only paying $15 a square foot, then that was a crime as well and should have been investigated. $15 (if real) is so incredibly low, it has to make me wonder if there wasn't some payoff involved. But $60 a square foot is incredibly low and is definitely worth an investigation. I find it easy to believe that other retailers wouldn't have wanted to pay $5 million to the restaurant to buy them out of their lease, but there would be plenty who would be willing to pay far more than $60/sq ft.

Income from rental property is not the same as raising taxes. That is prime real-estate and Apple should be paying market rate (or close to it). Every penny the MTA takes in rental income offsets future costs and fare increases. That income should be maximized, otherwise taxpayers and commuters are in essence, subsidizing the Apple store. I like Apple, but the only way I want to subsidize them is by buying their products.

Furthermore, I wonder what kind of signage there's going to be up there because after the Terminal was renovated, the policy was there was to be no advertising in the main hall. Kodak used to have a giant mural on that side of the terminal and it was taken down during the restoration for that reason. I wonder if Apple gets to violate that.


apple took over an empty space, where are these mythical tenants willing to pay more than $60?
post #48 of 85
Quote:
Originally Posted by ezduzit View Post

how about a little quid pro quo?

mta management is a nightmare. to wit; the world trade center and the hudson yards.

mr dinallo is usually even handed, but if the city of new york thinks that they could get a better tenant then they are delusional.

the last time they had complete control over a great train station, they tore down penn station. an ever lasting tragedy.

lucky jackie kennedy saved grand central.

Next thing you know, Apple will be forced to hire union labor for their Genius bar.

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post #49 of 85
Quote:
Originally Posted by SolipsismX View Post

What does the comptroller think is suspicious about the deal?

The politicos want to make sure they're bleeding every penny from everyone so they can line their own pockets either directly, or indirectly.

I firmly believe that the Apple store will drive huge traffic, which will ultimately lead to more foot traffic at GC, patronizing more of the other businesses there, generating extra revenue for all, which then feeds into MTA's coffer. It's a win-win...

But not if it means the mayor has to wait an extra month to buy his Rolls Royce.
post #50 of 85
Quote:
Originally Posted by al_bundy View Post

apple took over an empty space, where are these mythical tenants willing to pay more than $60?

They don't exist. MTA specifically stated that Apple was the only bidder.
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post #51 of 85
Unreal... Only in New York!
post #52 of 85
Apple should just buy Grand Central and be done with it. Rename to "Apple Central" They are "Grand" are they not????
post #53 of 85
Quote:
Originally Posted by sflocal View Post

The politicos want to make sure they're bleeding every penny from everyone so they can line their own pockets either directly, or indirectly.

I firmly believe that the Apple store will drive huge traffic, which will ultimately lead to more foot traffic at GC, patronizing more of the other businesses there, generating extra revenue for all, which then feeds into MTA's coffer. It's a win-win...

But not if it means the mayor has to wait an extra month to buy his Rolls Royce.

This is the city that had a problem with a mosque being built.

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post #54 of 85
For every Mac sold in the Grand Central store, Apple should donate one to the New York City School system. Both Apple and the City would benefit from the arrangement.
post #55 of 85
Quote:
Originally Posted by cat4change View Post

For every Mac sold in the Grand Central store, Apple should donate one to the New York City School system. Both Apple and the City would benefit from the arrangement.

Nonsense. Not on my dime.
post #56 of 85
Quote:
Originally Posted by cat4change View Post

For every Mac sold in the Grand Central store, Apple should donate one to the New York City School system. Both Apple and the City would benefit from the arrangement.

Are you really crazy enough to believe what you posted? How would Apple benefit from your proposed plan? Every time a restaurant in GC sells a meal should they donate a meal to the New York City School system as well? Good thing you are not involved with GC lease negotiations for the MTA because GC would be empty.
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post #57 of 85
Quote:
Originally Posted by zoetmb View Post

I disagree. If Apple is paying $60 a square foot (which is unheard of for prime Manhattan retail space) and the previous restaurant was only paying $15 a square foot, then that was a crime as well and should have been investigated. $15 (if real) is so incredibly low, it has to make me wonder if there wasn't some payoff involved.

Metrazur was there for 11 years, so the relevant comparison would be what the rent was when they signed the lease, not today.
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post #58 of 85
Quote:
Originally Posted by Realistic View Post

Are you really crazy enough to believe what you posted? How would Apple benefit from your proposed plan? Every time a restaurant in GC sells a meal should they donate a meal to the New York City School system as well? Good thing you are not involved with GC lease negotiations for the MTA because GC would be empty.

Apple needs to push Microsoft out of the school system. I am tired of my kids learning on pc's. And apple will sell a lot more iPhones and iPads, where I have not suggested the idea. It would also stop the talk of higher rent if it was seen to be in that public building for the social good.
post #59 of 85
Quote:
Originally Posted by Jetz View Post

+1

I am struggling to see how increased foot traffic would do that much for all the other businesses to make up for reduced rent.

When I go to the Apple Store, it's to get help, browse or buy something. It's not a given that I'll go to any other store in the mall and spend money there. I might or not get something from the food court. So it's a stretch to say that the increase foot traffic lifts all boats.

But there is supply and demand. Obviously if nobody wanted the space, whatever the rationale, Apple was entitled to drive a hard bargain as the only potential lessee.

How is it a reduced rent? So sez the Post. A simple burger joint pays more per square foot because there's fewer square feet. There were no other tenants offering. And $60 per square foot in a large Apple Store is a lot of moolah.

Granted, anything's possible in commercial leasing, but also maybe it's just the usual crap from the Post. Let's have the investigation.
post #60 of 85
Quote:
Originally Posted by AppleInsider View Post

The store, set to open next Friday, Dec. 9, will cost Apple about $800,000 for the first year, a rate that is said to be well below what other tenants of the station are paying..


Is that really true.

Lets look at the math.

According to the original article, Apple is paying $60 a square foot in rent. Presumably that's per month but for giggles lets say that that is per year. Supposedly this is a 23k square foot store.

That's $1,380,000 which is about 150% what the article claims.

and when you look at the square footage of other stores and how often they actually have to pay part of their sales to MTA, they probably aren't paying more than that amount
post #61 of 85
Quote:
Originally Posted by DESuserIGN View Post

Do you really think the presence of that store will increase the overall amount of Apple swag that will be sold and taxed in the state of New York? Or will it just increase the proportion sold at retail as opposed to wholesale by Apple?

It's not just about Apple swag. It's about increased sales at all the stores in the GCT
post #62 of 85
Quote:
Originally Posted by cat4change View Post

For every Mac sold in the Grand Central store, Apple should donate one to the New York City School system. Both Apple and the City would benefit from the arrangement.

If they did that then every other city with an Apple store would demand it, against all sales at all stores in the city if there is more than one. Or the equal in cash if they don't want to use Macs. and so on.

Then government offices would start demanding Apple has to supply them, plus free wifi everywhere etc.

None of which is Apple's responsibility
post #63 of 85
Quote:
Originally Posted by SDW2001 View Post

That's such liberal, deluded thinking on the state's part. They apparently didn't see the part where the MTA said it was making 4x as much as it was. It's never enough for these people. We need more revenue! Let's raise taxes to get it! The short-sightedness is unreal.

Ok, if you're going to believe that number you also have to believe that
apple is paying less than 1/3 of what other tenants are. Tell me why Apple shouldn't be paying the same rate as everyone else? Liberal, deluded thinking? This Apple-protectionist crap is amazing.
post #64 of 85
Quote:
Originally Posted by StLBluesFan View Post

Ok, if you're going to believe that number you also have to believe that apple is paying less than 1/3 of what other tenants are.

So the size of the location and the distinction of being and anchor tenant has no barring in your mind? Do you really think Macy's pays as much per square foot as Chick-fil-A in malls? The fact is people come to malls for department stores and decide to buy food because they are there. Those kiosks pay more per square foot than anyone but I don't see anyone yet I don't see anyone upset about that.

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post #65 of 85
The MTA does not own grand central .They are only leasing it. What if apple made the deal with the actual owners of grand central and not the mta.
post #66 of 85
Quote:
Originally Posted by StLBluesFan View Post

Ok, if you're going to believe that number you also have to believe that
apple is paying less than 1/3 of what other tenants are. Tell me why Apple shouldn't be paying the same rate as everyone else? Liberal, deluded thinking? This Apple-protectionist crap is amazing.

{If the rumors are true}, Because Apple negotiated a deal based on the additional traffic they'll bring in and the terrible economic conditions which meant that the MTA didn't have any other options. There's no need to assume bribes or any other nefarious crap. MTA took the best deal they could get. Apple negotiated the best deal they could get. Wherever the two interests crossed is where the deal ended up.

What part of that is too complicated for you to understand?
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post #67 of 85
Quote:
Originally Posted by majortom1981 View Post

The MTA does not own grand central .They are only leasing it. What if apple made the deal with the actual owners of grand central and not the mta.

Not likely. I haven't seen the contracts of course, but it's unlikely that MTA would have the rights to lease Grand Central but allow the owners to lease directly to tenants.
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post #68 of 85
Quote:
Originally Posted by StLBluesFan View Post

Ok, if you're going to believe that number you also have to believe that
apple is paying less than 1/3 of what other tenants are. Tell me why Apple shouldn't be paying the same rate as everyone else? Liberal, deluded thinking? This Apple-protectionist crap is amazing.

You are clueless about retail leases. Any retailer who has something substantial to offer the mall can leverage that in lease negotiations to get better terms. I negotiated retails leases for a F500 retail company for 20 years and that is how it works.
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post #69 of 85
Quote:
Originally Posted by zoetmb View Post

I disagree. If Apple is paying $60 a square foot (which is unheard of for prime Manhattan retail space) and the previous restaurant was only paying $15 a square foot, then that was a crime as well and should have been investigated. $15 (if real) is so incredibly low, it has to make me wonder if there wasn't some payoff involved. But $60 a square foot is incredibly low and is definitely worth an investigation. I find it easy to believe that other retailers wouldn't have wanted to pay $5 million to the restaurant to buy them out of their lease, but there would be plenty who would be willing to pay far more than $60/sq ft.

Income from rental property is not the same as raising taxes. That is prime real-estate and Apple should be paying market rate (or close to it). Every penny the MTA takes in rental income offsets future costs and fare increases. That income should be maximized, otherwise taxpayers and commuters are in essence, subsidizing the Apple store. I like Apple, but the only way I want to subsidize them is by buying their products.

Furthermore, I wonder what kind of signage there's going to be up there because after the Terminal was renovated, the policy was there was to be no advertising in the main hall. Kodak used to have a giant mural on that side of the terminal and it was taken down during the restoration for that reason. I wonder if Apple gets to violate that.

Do you have a fucking clue what "market rate" is. I'll help you "market rate" is the rate you get on the free market for whatever you are offering. Unless bribery was involved Apple did pay the "market rate". As to "policy", no Apple doesn't get to "violate" it, the MTA gets to change it as they see fit, as they did forcing Kodak to take down the "giant mural" which had been fine before.
post #70 of 85
Quote:
Originally Posted by cat4change View Post

For every Mac sold in the Grand Central store, Apple should donate one to the New York City School system. Both Apple and the City would benefit from the arrangement.

Yes you are an idiot, why not say "for every item sold one should be given away", guess what happens? the cost doubles you moron!
post #71 of 85
Quote:
Originally Posted by charlituna View Post

It's suspicious because the state might not be making as much money as they can out of the deal.

Yup, because an empty space generating no revenue, or traffic, is far preferable to Apple not only renting the space but drawing intense foot traffic.

After all, that cube store on 5th avenue had nothing to do with the re-development of stores and increase of traffic (and thus revenue into NYC coffers).

Prediction - some spineless politician or bunch of politicians will screw the deal up, Apple will exit, and NYC will be out an assload more of money than any difference between rent or revenue sharing "that might have been".

As well as shafting other tenets in GCS from the loss of collateral traffic a high profile store like Apple will bring.

The commentary around this is even more ignorant than those criticizing Apple for their 30% take for publishers who generate subscriptions within iOS.
post #72 of 85
Quote:
Originally Posted by Jetz View Post

How is ensuring that a state owned property gets the maximum rent that it can equal raising taxes?

Apparently, since there were no other interested parties they did get the best deal they could.

I fail to see what is so hard for people to understand about this. Politicians are one thing - but "news" outlets? Seriously?

The anti-busness rhetoric in this country has simply gotten completely out of hand with people who are obviously clueless spouting complete nonsense. No wonder our economy has stagnated the last four years
post #73 of 85
Quote:
Originally Posted by SolipsismX View Post

Unless the comptroller does this for every big contract or because there is suspicion of bribery or the like then I don't see why how much the MTA was able to get for the space an issue.

It's simple - because it involves Apple! And it makes for a snappy soundbite and furthers the populist rhetoric of our shameful politicians.
post #74 of 85
Quote:
Originally Posted by StLBluesFan View Post

Ok, if you're going to believe that number you also have to believe that
apple is paying less than 1/3 of what other tenants are. Tell me why Apple shouldn't be paying the same rate as everyone else? Liberal, deluded thinking? This Apple-protectionist crap is amazing.

You have not heard of supply and demand, have you. Commercial retail is in the tank, all the bets are that it (commercial retail) will be Sub-Prime 2. The total retail space has been falling for the last 3 years and no one with skin in the game belives it will turn around within the next 5 years. The simple fact is you get a better deal during the "bad times" than during the "good times". I suggest you also look up the term "anchor store".
post #75 of 85
Quote:
Originally Posted by StLBluesFan View Post

Ok, if you're going to believe that number you also have to believe that apple is paying less than 1/3 of what other tenants are.

Ugh - how much per year will Apple pay vs. other tenants?

Ever hear the one about statistics and lying?

Quote:
Tell me why Apple shouldn't be paying the same rate as everyone else?

No one else wanted the space?

Quote:
Liberal, deluded thinking?

Bingo! No basis in reality - par for the course.

Quote:
This Apple-protectionist crap is amazing.

This anti-business populist class warfare rhetoric is beyond pathetic
post #76 of 85
Quote:
Originally Posted by InsideOut View Post

the cost doubles you moron!

Nuh huh! You get one for free!

Gosh!

/s
post #77 of 85
Quote:
Originally Posted by mknopp View Post

So, let me see if I understand this.

Apple replaced a restaurant.

They will be footing the bill for some significant remodeling efforts to the store.

The MTA was looking for others to rent the space and nobody replied other than Apple.

And the MTA has said that they will be making more than 4 times what they were before with Apple coming in.

Yeah, this sounds like a terrible deal that definitely needs to be investigated.

"Nobody replied" perhaps because the asking price was too high. Then you find that Apple is paying way below the market price for the prime spot. Given Apple's political connection with the Clinton's and other DNC members, it wouldn't be too surprising if it turns out there are some skeleton's in the MTA closet (if there was a favoritism going on).

Having worked with former CIOs and other high ranking members of the MTA, I have little or zero confidence or their mismanagement of the system.
post #78 of 85
Quote:
Originally Posted by cat4change View Post

For every Mac sold in the Grand Central store, Apple should donate one to the New York City School system. Both Apple and the City would benefit from the arrangement.


What's the going to accomplish? NYC has one of the highest spending per student in the nation, why do you think pouring good money after bad education system is going to improve the situation?
post #79 of 85
Quote:
Originally Posted by farshad View Post

So you can try and change a lease agreement but you cant stop a bailed out company from paying bonuses ? Cause that would be wrong.


Also the MTA is charging me 12 bucks to take a tunnel so they can build the Freedom tower.I guess this means ill be paying 14 bucks next year so apple can have this store ?

is it really called the 'Freedom Tower'? Ellison was right: Cesspool of Imbeciles.
post #80 of 85
The Officials at the MTA land Apple as a Lessee and Controller Dinallo shows his gratitude by opening an investigation to win some political points. I hope that he has evidence of wrong doing because it should be either his job or the job of a MTA official. A good deal for Apple isn't evidence, A Lessor may take a deal below what they want for many reasons. A large restaurant may offer more, but is more slightly to fail. The Banana Republic / Old Navy retailers don't seem to be expanding. Now that Apple has configured a difficult space and its use is "Apple way" obvious now, maybe Best Buy would be interested. Short of the unlikely discovery of free iPads to Officials, this is an issue between the MTA and Controller. Small tenants try those tricks ($10k and a briefcase) all the time, but I would be surprised if Apple would pay for more then a coffee or bottle water.
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