Set to be its largest store yet, Apple’s upcoming retail store in New York’s Grand Central Station will be opening up for business next Friday on December 9.
Now one of the key strategies Apple employed to help make its retail initiative a success was to position its stores in highly foot trafficked areas and in premium locations such as upscale malls and popular shopping areas such as the famed Michigan Ave. in Chicago. A few years later, real estate owners began pining for Apple to open up retail stores on their property because they felt it added an aura of quality to a particular shopping center. If a mall has an Apple Store, the reasoning went , it must be a nice and relatively upscale place to shop.
That said, it’s not terribly surprising that the Metropolitan Transportation Authority was also keen on landing Apple as a tenant. Consequently, Apple was able to score a pretty sweet real estate deal for the location. Whereas other tenants in the Grand Central Station area pay as much as $200 per square foot in rent, Apple, according to reports that surfaced yesterday, is only paying $60. What’s more, Apple, in contrast to other retailers there, will not be paying the MTA a percentage of their sales.
The MTA justifies Apple’s unique deal on the grounds that it will “generate significant new traffic” for other stores in location.
Still, New York State Comptroller Thomas DiNapoli is curious as to the terms of the deal and wants to make sure that MTA hasn’t given away the store..
Responding to said concerns, MTA spokesman Aaron Donovan explained that Apple has already paid $5 million up front for the space.
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.
So it’s still a good deal, just not as crazy a deal as initially thought.
Still, leave it to a state senator with nothing better to do than to try and use a non-issue to get up onto a soap box.
New York Senator Tony Avella told the media yesterday that he thinks taxpayers may be getting the short end of the stick.
“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.”
Yes, it’s time to round up government employees and have them work together and investigate the lease signed by Apple at Grand Central Station. An excellent use of government resources.