New York state investigating Apple's low-cost Grand Central leaseAfter a story revealed that Apple is paying a lower-than-average rate for its new Grand Central Terminal megastore, a New York state official is now investigating the lease.
New York State Comptroller Thomas DiNapoli told the New York Post that he has launched an investigation into the agreement struck between Apple and New York's Metropolitan Transportation Authority. 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.
"The article in the New York Post about the MTA's contract with Apple in Grand Central Terminal is a cause for concern," DiNapoli said in a statement. "This is a prime property, and I intend to make sure that the MTA hasn't given away the store."
The investigation was spurred by a story published on Wednesday, which characterized the deal between Apple and the MTA as "unique." Apple is said to be paying $60 per square foot for the property, while other tenants such as a Shake Shack restaurant pay more than $200 per square foot.
Apple's apparent "hard bargain" driven with the MTA also means the company will not share any of its sales revenue with the MTA, unlike some other storefronts in the station. The authority said allowing Apple to keep all of its sales is fair, because the new store will "generate significant new traffic" for the 100 other retail tenants of Grand Central Terminal.
The MTA has said that the authority will receive more than quadruple what it was paid previously, when Charlie Palmer's Metrazur restaurant occupied that space. In addition, the MTA also revealed that no companies other than Apple responded to the authority's public request for proposal.
Apple is also bankrolling infrastructure upgrades, including new elevators. And the company also reportedly paid $5 million to the Metrazur so it could take over the space.
But because that $5 million from Apple went to the restaurant, and not to the MTA, the actual rent being paid to the authority is much lower than competing occupants of the terminal.
Thanks to AppleInsider reader "P" for the photo.
The MTA has been under scrutiny from DiNapoli's office before, as last year it found a number of irregularities in the authority's real-estate portfolio. DiNapoli will look into the latest deal the MTA struck with Apple in an attempt to find if the iPhone maker was given any special treatment.
When the retail store officially opens next Friday, it will be one of Apple's largest retail locations in the world. The 23,000-square-foot store will open in time for Christmas, and will sit in a prime location in the terminal, through which an estimated 700,000 people pass every day.