MTA tells New York to 'bring it on' & investigate Apple's Grand Central lease

2

Comments

  • Reply 21 of 50
    Quote:
    Originally Posted by sranger View Post


    They are going to have a hard time explaining this if their were other bidders offering significantly more for the same space.... Otherwise, it should be a non-issue...



    You should read the article before posting. Very clearly stated - Apple was the only [responsive] bidder. Responsive is in brackets because that fact comes from the MTA.



    btw - for those of you who have never negotiated a retail lease, the buy out of an existing lease, the site improvements, public area access improvements, build out of the demised space etc are all components of the cost of the lease. If the landlord turnkeys the lease these are all rolled up into one number $/sq ft. If the landlord and tenant decide to share responsibility for these elements the rate per sq ft is apportioned accordingly.http://forums.appleinsider.com/image...ies/1smile.gif
  • Reply 22 of 50
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by sranger View Post


    They are going to have a hard time explaining this if their were other bidders offering significantly more for the same space.... Otherwise, it should be a non-issue...



    It has already been stated - both in the original Post story and in MTA's response - that there were no other bidders.



    Quote:
    Originally Posted by zoetmb View Post


    The fact remains regardless of the actual motives of the politicians involved is that $60/sq ft for Manhattan retail in a prime location is absurdly low regardless of the benefit of having Apple in that space. Having said that, the $15/sq ft that the restaurant was paying borders on criminal and the politicians are hypocritical for not having investigated that.



    When all factors are considered, Apple is paying $180 per ft2 - according to MTA who presumably has more accurate figures than you do.



    But the actual number is irrelevant. MTA got the best deal that they could - since there were no other bidders. Apple got a good deal, too. How is that criminal?



    Quote:
    Originally Posted by atsysusa View Post


    You should read the article before posting. Very clearly stated - Apple was the only [responsive] bidder. Responsive is in brackets because that fact comes from the MTA.



    btw - for those of you who have never negotiated a retail lease, the buy out of an existing lease, the site improvements, public area access improvements, build out of the demised space etc are all components of the cost of the lease. If the landlord turnkeys the lease these are all rolled up into one number $/sq ft. If the landlord and tenant decide to share responsibility for these elements the rate per sq ft is apportioned accordingly.http://forums.appleinsider.com/image...ies/1smile.gif



    Exactly. For example, Apple had to buy out the restaurant's lease. That presumably was paid to MTA, adding $5 M to the total cost. That alone adds about $30 per ft2.
  • Reply 23 of 50
    wizard69wizard69 Posts: 12,831member
    Do you really think it matters what the truth is? All of this info was available days ago, in fact this latest release from the MTA just rehashes what we already knew. Or should have known if people would have read for content.



    The problem with this entire issue is that there are far too many people in this world that think like Occupy Wall Streeters, or the global warming crowd. No body gets their facts in order before acting on bits of info. Rather they jump to conclusions or hand pick data for their agenda.



    Quote:
    Originally Posted by gprovida View Post


    Lets see how long it takes for NY Post, bloggers and NY State to bother to report the full facts, rather than make guesses on MTA and Apple's motives, competency, and fairness. My bet, a long time. The controversy is much more profitable up front than facts afterwards. Perhaps a footnote on page xx and a very conspiracy blogs snide remarks elsewhere. Someone will finally figure out that Grand Central Station is not a Mall.



  • Reply 24 of 50
    wizard69wizard69 Posts: 12,831member
    Quote:
    Originally Posted by zoetmb View Post


    The fact remains regardless of the actual motives of the politicians involved is that $60/sq ft for Manhattan retail in a prime location is absurdly low regardless of the benefit of having Apple in that space. Having said that, the $15/sq ft that the restaurant was paying borders on criminal and the politicians are hypocritical for not having investigated that.



    Grand central is a transportation terminal not a high end mall. These days $60 a square foot is very good rent for commercial space. Besides there seems to be this mis conception in this forum that property operators always get the going rate.



    The reality is lease contracts for these sort of places are almost always negotiated for each tenant. This is especially the case for businesses operating on a shoe string, which often dish out a portion of revenue in favor of deeply discounted rental.

    Quote:

    Frankly, except perhaps for the bakeries and snack places, I really don't think that the presence of the Apple store is going to increase business for the other stores in the terminal.



    Actually I tend to agree. Further I'm not convince this is a good deal for Apple. In the end this is like having a store in an airport terminal, lots of foot traffic usually from people in a hurry to get somewhere. The big question is this will people be willing to go to Grand Central just to shop at the Apple store. I'm not convinced they will because of the environment.

    Quote:

    I can see the MTA's position: they're getting 4x the rent they had gotten, Apple bared the cost of buying the restaurant out of the lease and is apparently paying the cost of infrastructure improvements (like the elevator) and they think Apple will increase prestige of the retail space thereby supposedly attracting higher rent-paying tenants for other locations in the Terminal in the future.



    More so this would or should be considered an experiment by both parties. There are no givens in retail and frankly I see Apple having a hard time succeeding at Grand Central. There is a reason that retails space is so cheap in these places, they aren't the retail money pits many think they are.

    Quote:

    But I can also see the Controller's position: Why is a company as large and profitable as Apple getting public space for a very cheap rate at a time when the MTA is running incredible deficits and there will probably be fare increases again in the near future?



    This is the part that is garbage and frankly people taking this point of view need to be taken to the wood shed. There is no amount of rent that Apple or any company would be willing to pay that would have any impact at all on the MTA fare prices. This is simple mathematics. Beyond that the people in NYC need to learn to pay for their services instead of letting the rest of the state bail them out.

    Quote:

    There's another issue and that's that after the Terminal was restored some years ago, there wasn't supposed to be any retail (aside from the two restaurants with very subtle signage) permitted in the main hall. If Apple is permitted signage up on the balcony, that's definitely going to violate those policies. Kodak used to have a giant mural up on that balcony that was removed during the renovation and never restored due to that reason.



    Policies are subject to change. Especially stupid policies that keep renters out of a facility.

    Quote:

    If Microsoft was building the store instead of Apple, would you still be criticizing the investigation?



    Most certainly. Probably not in these forums though. This whole investigation highlights significant issues with NY State and the chronic problem of political grand standing and a general waste of public funds. Almost everything about this story has been twisted in a very suspect way.

    Quote:

    Although Apple won't do this, one thing I think they should do is to provide free WiFi throughout the Terminal (maybe not down to the track level, but everywhere else.) At least the MTA can then also say that there's a public benefit.



    If that is so useful maybe the MTA should provide the service! Apple has already made a significant investment in the terminal so why should they have to now provide services to the entire terminal. The public benefit Apple is providing is the store. This is a capitalist society you know, a business takes care of its customers first.
  • Reply 25 of 50
    tylerk36tylerk36 Posts: 1,037member
    Why do I get the feeling that there is some sort of inside issues. Some official is against Apple and is making this a personal issue. This whole ordeal is so stupid. I think the whole matter will be dropped eventually. Just another jack ass matter of government getting involved in matter they have no business in.
  • Reply 26 of 50
    wizard69wizard69 Posts: 12,831member
    A common theme expressed in the forums here is this idea that the rent is oh so low. The opposite is rather true, these are not the types of places that attract shoppers. There are two intersting facts here. One is the low rent paid be other tenants and the short term of the contract. The value of this space will actually be judged in ten years when it comes time for Apple to renew the lease.



    Quote:
    Originally Posted by Retrogusto View Post


    It will clearly boost the other businesses--as anyone who has visited Grand Central Station can attest, that place is seriously lacking in foot traffic.



    But seriously, the real story here is that the Comptroller reads the Post! I hope he reads the National Enquirer too, because I think Elvis has been evading his taxes all of these years that he's been pretending to be dead.



    The real story here is the public grand standing by politicians before they even look at the facts. It has gotten to the point of being pretty damn pathetic.
  • Reply 27 of 50
    gqbgqb Posts: 1,934member
    Quote:
    Originally Posted by sranger View Post


    They are going to have a hard time explaining this if their were other bidders offering significantly more for the same space.... Otherwise, it should be a non-issue...



    But the bid itself is only a part of the equation... that's the whole point.

    Apple will bring far more in taxes, and increased business to its neighbors itself will generate more revenue for MTA.



    That said, if the authorities didn't look at the deal, then they'd be (properly) criticized for abdicating their responsibilities. Fair enough... the truth will out.
  • Reply 28 of 50
    Quote:
    Originally Posted by wizard69 View Post


    ..... there are far too many people in this world that think like Occupy Wall Streeters, or the global warming crowd.......



    Hello?
  • Reply 29 of 50
    wovelwovel Posts: 956member
    Quote:
    Originally Posted by zoetmb View Post


    The fact remains regardless of the actual motives of the politicians involved is that $60/sq ft for Manhattan retail in a prime location is absurdly low regardless of the benefit of having Apple in that space. Having said that, the $15/sq ft that the restaurant was paying borders on criminal and the politicians are hypocritical for not having investigated that.



    Frankly, except perhaps for the bakeries and snack places, I really don't think that the presence of the Apple store is going to increase business for the other stores in the terminal.



    I can see the MTA's position: they're getting 4x the rent they had gotten, Apple bared the cost of buying the restaurant out of the lease and is apparently paying the cost of infrastructure improvements (like the elevator) and they think Apple will increase prestige of the retail space thereby supposedly attracting higher rent-paying tenants for other locations in the Terminal in the future.



    But I can also see the Controller's position: Why is a company as large and profitable as Apple getting public space for a very cheap rate at a time when the MTA is running incredible deficits and there will probably be fare increases again in the near future?



    There's another issue and that's that after the Terminal was restored some years ago, there wasn't supposed to be any retail (aside from the two restaurants with very subtle signage) permitted in the main hall. If Apple is permitted signage up on the balcony, that's definitely going to violate those policies. Kodak used to have a giant mural up on that balcony that was removed during the renovation and never restored due to that reason.



    If Microsoft was building the store instead of Apple, would you still be criticizing the investigation?



    Although Apple won't do this, one thing I think they should do is to provide free WiFi throughout the Terminal (maybe not down to the track level, but everywhere else.) At least the MTA can then also say that there's a public benefit.





    You are ignoring the $2.5 million in leasehold improvements Apple is making. These are a tangible benefit to the MTA and they are often paid by the landlord and not the tenant. Since this space is clearly described as difficult to work with, I think the landlord not paying to make it usable is pretty atypical. Essentially, Apple is using their cash to finance the improvements for the landlord.
  • Reply 30 of 50
    flaneurflaneur Posts: 4,510member
    Quote:
    Originally Posted by wizard69 View Post


    . . . The real story here is the public grand standing by politicians before they even look at the facts. It has gotten to the point of being pretty damn pathetic.



    But, I insist, the real story could be a nonstory cooked up by an irresponsible tabloid, upon which a politician is grandstanding.
  • Reply 31 of 50
    Quote:
    Originally Posted by wizard69 View Post


    Do you really think it matters what the truth is? All of this info was available days ago, in fact this latest release from the MTA just rehashes what we already knew. Or should have known if people would have read for content.



    The problem with this entire issue is that there are far too many people in this world that think like Occupy Wall Streeters, or the global warming crowd. No body gets their facts in order before acting on bits of info. Rather they jump to conclusions or hand pick data for their agenda.



    Let me fix this for you...



    The problem with this entire issue is that there are far too many people in this world that think like Republicans/Tea Partiers/Fox News watchers, or the anti-science crowd. Nobody gets their facts in order before acting on bits of info. Rather they jump to conclusions or hand pick data for their agenda.
  • Reply 32 of 50
    flaneurflaneur Posts: 4,510member
    Quote:
    Originally Posted by bullhead View Post


    Let me fix this for you...



    The problem with this entire issue is that there are far too many people in this world that think like Republicans/Tea Partiers/Fox News watchers, or the anti-science crowd. Nobody gets their facts in order before acting on bits of info. Rather they jump to conclusions or hand pick data for their agenda.



    Fixed.
  • Reply 33 of 50
    tbelltbell Posts: 3,146member
    Your comments seem to be missing a key understanding. First, these spaces go through an open bidding process. So, anybody meeting the MTA's requirements can bid for the space. Generally the high bidder wins. If Apple bid the most for the space, are you suggesting just because it can afford to pay more, it should have to when nobody else was willing to out bid Apple? Second, these types of locations are negotiated for a long term period of time. No proprietor is going to invest in a business, just to be squeezed out of a location after a short period lease expires.



    So the restaurant paying $15 a square foot might seem low, but that was the high bid. The lease was for eight years, and the restaurant was only I think two years into the lease. If the restaurant was the high bidder, how can it's lease terms be viewed as criminal? Should the MTA have just let the space remain abandoned? More importantly, had the MTA been stuck honoring the contract with the restaurant, it would have made a lot less money.



    Further, any bidder on the restaurant's space had to 1) buy out the old lease, and 2) pay for improvements wanted by the MTA. The open bidding process clearly showed nobody other than Apple was willing to do that.





    If anything, the MTA got a very good deal. It got somebody to buy out the former tenant, pay for needed improvements, pay four times the old amount for rent, and likely bring in more traffic to other businesses. Moreover, this location doesn't have high end retailers located in it. Apple moving in gives the MTA a chance to change that. The extra money the MTA will be making is the public benefit along with the public being able to gain Internet access in Apple's stores for free.



    Quote:
    Originally Posted by zoetmb View Post


    The fact remains regardless of the actual motives of the politicians involved is that $60/sq ft for Manhattan retail in a prime location is absurdly low regardless of the benefit of having Apple in that space. Having said that, the $15/sq ft that the restaurant was paying borders on criminal and the politicians are hypocritical for not having investigated that.



    Frankly, except perhaps for the bakeries and snack places, I really don't think that the presence of the Apple store is going to increase business for the other stores in the terminal.



    I can see the MTA's position: they're getting 4x the rent they had gotten, Apple bared the cost of buying the restaurant out of the lease and is apparently paying the cost of infrastructure improvements (like the elevator) and they think Apple will increase prestige of the retail space thereby supposedly attracting higher rent-paying tenants for other locations in the Terminal in the future.



    But I can also see the Controller's position: Why is a company as large and profitable as Apple getting public space for a very cheap rate at a time when the MTA is running incredible deficits and there will probably be fare increases again in the near future?



    There's another issue and that's that after the Terminal was restored some years ago, there wasn't supposed to be any retail (aside from the two restaurants with very subtle signage) permitted in the main hall. If Apple is permitted signage up on the balcony, that's definitely going to violate those policies. Kodak used to have a giant mural up on that balcony that was removed during the renovation and never restored due to that reason.



    If Microsoft was building the store instead of Apple, would you still be criticizing the investigation?



    Although Apple won't do this, one thing I think they should do is to provide free WiFi throughout the Terminal (maybe not down to the track level, but everywhere else.) At least the MTA can then also say that there's a public benefit.



  • Reply 34 of 50
    bageljoeybageljoey Posts: 1,755member
    Quote:
    Originally Posted by ChrisNH View Post


    ...

    I applaud Apple for playing the 'Everybody will Benefit!' card, even though there's no empirical proof that the other stores will do 'better' with an Apple Store in the vicinity.



    My $0.02 based on my own observations.



    I'm not trying to be rude here, but I think this is kinda funny. What you are saying is that there is no scientifically collected evidence that high Apple Store traffic helps increase sales at neighboring stores and that you know this based on your anecdotal unscientific observations...

    That is just silly.

    Here is my anecdotal counter story: my local mall does not have an Apple Store. On 6-8 occasions I have made trips to a different mall that is farther from my house specifically to go to the Apple Store. On several of those trips, I shopped at other stores--shopping that I never would have done in that mall without the Apple Store. Furthermore, it turns out that the kids liked the "playground" at that mall, so I have returned several times since even when not patronizing the Apple Store. Still, every dollar I spent at that mall could be attributed directly to the presence of Apple.



    I would be VERY surprised if mall managers dd not have access to very good empirical evidence about how magnet stores and Apple Stores in specific affect surrounding businesses--even if you don't know about it...
  • Reply 35 of 50
    lilgto64lilgto64 Posts: 1,147member
    Ge I sure hope the comptroller spends a good chunk of tax payer money for a full and proper investigation to get to the bottom of this and the real truth, because, clearly, one state government official is certainly not capable of picking up the phone or sending an email to another state government official with a simple question and expect a satisfactory response.
  • Reply 36 of 50
    Quote:
    Originally Posted by Bageljoey View Post


    I'm not trying to be rude here, but I think this is kinda funny. What you are saying is that there is no scientifically collected evidence that high Apple Store traffic helps increase sales at neighboring stores and that you know this based on your anecdotal unscientific observations...

    That is just silly.

    Here is my anecdotal counter story: my local mall does not have an Apple Store. On 6-8 occasions I have made trips to a different mall that is farther from my house specifically to go to the Apple Store. On several of those trips, I shopped at other stores--shopping that I never would have done in that mall without the Apple Store. Furthermore, it turns out that the kids liked the "playground" at that mall, so I have returned several times since even when not patronizing the Apple Store. Still, every dollar I spent at that mall could be attributed directly to the presence of Apple.



    I would be VERY surprised if mall managers dd not have access to very good empirical evidence about how magnet stores and Apple Stores in specific affect surrounding businesses--even if you don't know about it...



    I think that's malls period. I noticed, for example, some of the malls in St. Louis tend to do better when they have a Nordstrom attatched to it. Apple stores attract people with money and I have yet to see an Apple store in low end areas...yet.
  • Reply 37 of 50
    Quote:
    Originally Posted by bullhead View Post


    Let me fix this for you...



    The problem with this entire issue is that there are far too many people in this world that think like Republicans/Tea Partiers/Fox News watchers, or the anti-science crowd. Nobody gets their facts in order before acting on bits of info. Rather they jump to conclusions or hand pick data for their agenda.



    I hate it when people "fix" what someone else has written. Even if you disagree, let it be.
  • Reply 38 of 50
    Quote:
    Originally Posted by bullhead View Post


    Let me fix this for you...



    The problem with this entire issue is that there are far too many people in this world that think like Republicans/Tea Partiers/Fox News watchers, or the anti-science crowd. Nobody gets their facts in order before acting on bits of info. Rather they jump to conclusions or hand pick data for their agenda.



    apt name, bullhead.
  • Reply 39 of 50
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by wizard69 View Post


    urther I'm not convince this is a good deal for Apple. In the end this is like having a store in an airport terminal, lots of foot traffic usually from people in a hurry to get somewhere. The big question is this will people be willing to go to Grand Central just to shop at the Apple store. I'm not convinced they will because of the environment.



    It doesn't require drawing people from the surrounding area. There are plenty of people already going through Grand Central.



    You're forgetting the millions of people who go through Grand Central every week. Plus, people often arrive well in advance of their train so that they don't miss it. If even a tiny percentage stop for a few minutes while waiting for their train, the traffic through the store will be huge. Apple apparently thinks this will be the case.



    Besides, there is plenty of evidence that Apple Stores actually DO draw people from quite a distance. Do you think that everyone who shops at the existing Apple Store was already in the building? They come from all over NY to shop at that store.



    Quote:
    Originally Posted by zoetmb View Post


    Frankly, except perhaps for the bakeries and snack places, I really don't think that the presence of the Apple store is going to increase business for the other stores in the terminal.



    And MTA obviously thinks you're mistaken. Who knows more about Grand Central and the NY market?



    It's like an anchor store in a mall. You see it all the time - when a mall brings in a high end anchor store, the surrounding stores get better over time. The ones who have access to a wide range of merchandise immediately shift to higher end stuff. For the others, whenever a lease changes hand, it's usually an upward move. The same thing happens in the opposite way. When a high end store leaves a mall and gets replaced with K-mart or Sears, the overall level of the mall goes downhill.
  • Reply 40 of 50
    I'm assuming you actually can't buy property there. I'm not familrar with that place.
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