When private parties make one sided deals, it's their business. When a state agency makes a one sided deal (with the state's money) it's everyone's business. Just because the MTA *says* they'll make 4x as much doesn't mean that assumption is correct.
Dreams of national socialism dressed up as benign capitalism, such as you seem to enjoy, always sounds good on paper, but when the rubber hits the road, Americans always prefer transparent, regulated free-enterprise.
Quote:
Originally Posted by SDW2001
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 think it's fair to investigate. Personally, I don't believe Apple would stoop to shenanigans. But anytime a government at any level gives a perceived sweetheart deal to any corporation, it should be investigated. The rationalization that this would drive increased traffic to other stores is somewhat questionable.
+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.
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.
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?
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.
It would be interesting to ask the other stores / restaurants in the space whether they want Apple there at a reduced rate or no Apple. They are not in direct competition with Apple so its probably to their advantage to make Apple happy.
Who knows - the deal might give them a better bargaining position in the future when they re-negotiate their lease. If their sales improve due to increased traffic they are in a win situation, regardless.
Simply put, the MTA gave Apple a good deal to bring in a big name business that'll generate traffic to the area. It was a good trade. When I visited NYC a few years ago, one of the reasons was visit the Fifth Avenue Apple Store plus the two world's largest toy stores. I seriously doubt very few people want to visit NYC just to go to Shake Shack.
Simply put, the Apple Store will generate tourism to the city.
How is ensuring that a state owned property gets the maximum rent that it can equal raising taxes?
Because it's the same thinking. They are so concerned with "maximum revenue" that they haven't stopped to consider they are making 4x more than before. I'm sure they didn't exactly have companies lined up around the block waiting to pay $800,000 a year for that space. This equates to taxes well, because politicians are always talking about raising revenue...but what they fail to consider is they end up depressing the very economic activity that is generating revenue in the first place.
But Apple will press for the best deal possible. I expect them to do nothing less.
I am sure they sold various other updates (like the 'vators) as well as substantially higher foot traffic to the area as major selling points.
If the Shake Shack could bring in as many people from a good distance just to eat there, I am sure they could have gotten a better deal as well.
At first I had the same thought as you, then I realized this is GCC we're talking about... it brings in the foot traffic all on it's own. This would be akin to Minneapolis giving Apple a rent break on a new store in the middle of MSP. GCC brings in the foot traffic for Apple, not the other way around. If anything, Apple should be paying more for the visibility and accessibility of such a prime, busy location.
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.
Didn't the article mention that Apple paid $5 million to the restaurant so Apple could occupy the store? I don't think the MTA was looking- Apple bought the "rights" so to speak is how I interpreted it. But I could be wrong- which happens quite often.
I imagine that Apple isn't the only vendor in New York that has gotten a good deal on retail space. But hey since Apple has become a huge vendor maybe they need to be singled out for now . I bet Steve would have thrown a fit. Just another reason why I don't like New York. Not the people but the attitude that is being portrayed of NY in this story.
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.
Let me just add that the MTA has revenue share deals with ALL the other retailers in GC. Apple is going to drive a huge increase in traffic and business to these retailers. Grand Central is going to be absolutely mobbed and the MTA will financially benefit enormously
Typical NY dumb ass politicians. Another example of why there such a mass exodus from this state
Curious minds want to know - what newsprint is of sufficient quality for butt-wiping?
Depends on how desperate you are.
Quote:
Originally Posted by SDW2001
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.
There are also a lot of other factors:
- Apple is paying for significant improvements to the facility
- Apple is expected to bring in a lot of additional traffic - which would lead to greater MTA payments from the other stores
- Apple's bid was the only one they received. So they are receiving 100% more from Apple than from the next highest bidder
I guess the comptroller doesn't realize that the economy is still a little shaky. They don't have the option of choosing from thousands of companies banging on their door trying to rent expensive space.
If anything, Apple should be paying more for the visibility and accessibility of such a prime, busy location.
My guess is that they are paying a lot more for Grand Central Station than they would, for example, in a mall in Paramus NJ.
They reportedly made a payment of $5M to buy out the former tenant, fer chrissakes. They reportedly are paying for infrastructure improvements to an antique, historic property.
- Apple is paying for significant improvements to the facility
- Apple is expected to bring in a lot of additional traffic - which would lead to greater MTA payments from the other stores
- Apple's bid was the only one they received. So they are receiving 100% more from Apple than from the next highest bidder
I guess the comptroller doesn't realize that the economy is still a little shaky. They don't have the option of choosing from thousands of companies banging on their door trying to rent expensive space.
This is exactly what I'm saying. The reason I drew the parallel to taxes is that it's the same kind of thinking. Politicians look at this and scream "HEY! We could be making so much more money here. What are those blithering idiots doing down at the MTA!?" They never stop to consider the points you raise. Apple's presence is enormously beneficial in that area for multiple reasons.
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?
If the alternative to MAXIMUM RENT is NO RENT then what does it matter? As previously noted Apple is paying 4x as much as the previous tenant and is paying for upgrades to the space it doesn't directly control. Sounds like the MTA made a good deal for itself just as Apple made a good deal for itself, in a down economy. 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.
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.
Comments
When private parties make one sided deals, it's their business. When a state agency makes a one sided deal (with the state's money) it's everyone's business. Just because the MTA *says* they'll make 4x as much doesn't mean that assumption is correct.
Dreams of national socialism dressed up as benign capitalism, such as you seem to enjoy, always sounds good on paper, but when the rubber hits the road, Americans always prefer transparent, regulated free-enterprise.
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 think it's fair to investigate. Personally, I don't believe Apple would stoop to shenanigans. But anytime a government at any level gives a perceived sweetheart deal to any corporation, it should be investigated. The rationalization that this would drive increased traffic to other stores is somewhat questionable.
+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.
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.
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?
+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.
It would be interesting to ask the other stores / restaurants in the space whether they want Apple there at a reduced rate or no Apple. They are not in direct competition with Apple so its probably to their advantage to make Apple happy.
Who knows - the deal might give them a better bargaining position in the future when they re-negotiate their lease. If their sales improve due to increased traffic they are in a win situation, regardless.
Simply put, the Apple Store will generate tourism to the city.
How is ensuring that a state owned property gets the maximum rent that it can equal raising taxes?
Because it's the same thinking. They are so concerned with "maximum revenue" that they haven't stopped to consider they are making 4x more than before. I'm sure they didn't exactly have companies lined up around the block waiting to pay $800,000 a year for that space. This equates to taxes well, because politicians are always talking about raising revenue...but what they fail to consider is they end up depressing the very economic activity that is generating revenue in the first place.
But Apple will press for the best deal possible. I expect them to do nothing less.
I am sure they sold various other updates (like the 'vators) as well as substantially higher foot traffic to the area as major selling points.
If the Shake Shack could bring in as many people from a good distance just to eat there, I am sure they could have gotten a better deal as well.
At first I had the same thought as you, then I realized this is GCC we're talking about... it brings in the foot traffic all on it's own. This would be akin to Minneapolis giving Apple a rent break on a new store in the middle of MSP. GCC brings in the foot traffic for Apple, not the other way around. If anything, Apple should be paying more for the visibility and accessibility of such a prime, busy location.
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.
Didn't the article mention that Apple paid $5 million to the restaurant so Apple could occupy the store? I don't think the MTA was looking- Apple bought the "rights" so to speak is how I interpreted it. But I could be wrong- which happens quite often.
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.
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.
Let me just add that the MTA has revenue share deals with ALL the other retailers in GC. Apple is going to drive a huge increase in traffic and business to these retailers. Grand Central is going to be absolutely mobbed and the MTA will financially benefit enormously
Typical NY dumb ass politicians. Another example of why there such a mass exodus from this state
Curious minds want to know - what newsprint is of sufficient quality for butt-wiping?
Depends on how desperate you are.
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.
There are also a lot of other factors:
- Apple is paying for significant improvements to the facility
- Apple is expected to bring in a lot of additional traffic - which would lead to greater MTA payments from the other stores
- Apple's bid was the only one they received. So they are receiving 100% more from Apple than from the next highest bidder
I guess the comptroller doesn't realize that the economy is still a little shaky. They don't have the option of choosing from thousands of companies banging on their door trying to rent expensive space.
If anything, Apple should be paying more for the visibility and accessibility of such a prime, busy location.
My guess is that they are paying a lot more for Grand Central Station than they would, for example, in a mall in Paramus NJ.
They reportedly made a payment of $5M to buy out the former tenant, fer chrissakes. They reportedly are paying for infrastructure improvements to an antique, historic property.
The $/sf are only one part of the equation.
Apple's apparent "hard bargain" driven with the MTA also means the company will not share any of its sales revenue with the MTA
Apple only likes revenue sharing when it is the one collecting.
Apple only likes revenue sharing when it is the one collecting.
And, I suppose others - you, for instance - are different?
Depends on how desperate you are.
There are also a lot of other factors:
- Apple is paying for significant improvements to the facility
- Apple is expected to bring in a lot of additional traffic - which would lead to greater MTA payments from the other stores
- Apple's bid was the only one they received. So they are receiving 100% more from Apple than from the next highest bidder
I guess the comptroller doesn't realize that the economy is still a little shaky. They don't have the option of choosing from thousands of companies banging on their door trying to rent expensive space.
This is exactly what I'm saying. The reason I drew the parallel to taxes is that it's the same kind of thinking. Politicians look at this and scream "HEY! We could be making so much more money here. What are those blithering idiots doing down at the MTA!?" They never stop to consider the points you raise. Apple's presence is enormously beneficial in that area for multiple reasons.
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?
If the alternative to MAXIMUM RENT is NO RENT then what does it matter? As previously noted Apple is paying 4x as much as the previous tenant and is paying for upgrades to the space it doesn't directly control. Sounds like the MTA made a good deal for itself just as Apple made a good deal for itself, in a down economy. 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.
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.