How Apple's Grand Central Station Store Is Screwing New York

Illustration for article titled How Apple's Grand Central Station Store Is Screwing New York

The Grand Central Apple store isn't even open yet and it's already becoming a massive headache for New York. First was its garish video facade. Now comes word that Apple's lease on the space is jobbing the city's transit department out of a bunch of revenue.


Apparently, Apple strong-armed its way into a lease allowing it skip out on the revenue sharing clauses that other tenants at Grand Central generally agree to. The MTA, which operates Grand Central, noted it's actually getting about four times the rent that it was previously. But its hope to replace the lost revenue sharing income with whatever traffic boost the Apple store provides seems risky at best. Thing is, the MTA is hemorrhaging money at an untenable rate, so any infusion of cash from an Apple deal helps. Apple knows this and is turning the screws accordingly.

The sweetheart deal probably won't do much to mess with New York as a whole—more Apple stores means more tax revenue—but for the cash-strapped horror show that is the MTA, it's a total downer. New Yorkers have had fare hikes and service cuts to deal with, so news that Apple's getting a free ride while theirs is getting crappier and more expensive. It's one more instance of Apple screwing over one of its partners; just this time, might be hard-lining you right out of your ride to work. [NY Post]



From the article:

All of those shops and restaurants, with the exception of a Chase ATM branch, pay the MTA a percentage of their sales that exceed a given threshold.

I can sort of understand their reasoning for giving Apple a sweetheart deal, but why a Chase ATM branch??

Also, just did a little math - while the cost per square foot is low, Apple is paying $1.4 million per month in rent for that store. That's a lot of rent. Assuming a reasonable profit margin, they're going to need to sell about $250,000 worth of product per day there. I suppose it's possible, but that's a lot of product.