(
)
State watchdogs are probing Apple’s sweet deal for a new store in Grand Central Terminal, The Post has learned.
State Comptroller Thomas DiNapoli has launched an investigation into whether the Metropolitan Transportation Authority gave Apple overly generous terms on its lease for the shop, which is slated for a splashy opening next week.
The probe comes in response to yesterday’s exclusive report by The Post, which noted that the cash-rich tech giant will be the only retailer among the 100 or so in MTA’s Grand Central Terminal not required to make revenue-sharing payments to the agency landlord.
What’s more, Apple’s 10-year lease for a space on the northeast balcony of the historic commuter hub overlooking the Main Concourse — which will amount to about $800,000 for the first year — is well below the rate being charged to many neighboring tenants, including the Michael Jordan’s Steakhouse that shares the balcony.
“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 yesterday. “This is a prime property, and I intend to make sure that the MTA hasn’t given away the store.”
In July 2010, DiNapoli’s office published a lengthy audit of the MTA’s real-estate portfolio that found lax recordkeeping, hundreds of vacancies and mediocre marketing of properties.
Accordingly, the comptroller prodded the MTA to get its real estate in order “before making drastic service cuts and talking about fare hikes” on the city’s cash-strapped subway system.
“Consistent with the Comptroller’s recommendations, the MTA moved proactively to maximize revenue and quadrupled the rent we receive for this unique space,” MTA spokesman Aaron Donovan said of the Apple deal in an e-mailed response yesterday.
The MTA noted that Apple is shelling out for infrastructure upgrades to the space, which will include a bank of elevators to hoist i-Pad-hungry shoppers to the balcony level.
In addition, Donovan noted that Apple paid $5 million up front to the northeast balcony’s previous occupant, the restaurant Metrazur, in exchange for clearing out.
“They are effectively paying $180 per square foot over the 10 years of the lease, almost 10 times the previous tenant,” Donovan argued, figuring Apple’s payoff of Metrazur into that calculation.
However, in addition to the fact that the $5 million went to the restaurant instead of the MTA, last year’s state audit shows that Metrazur’s rent had been unusually low because of earlier screwups by the MTA.
Indeed, the MTA forked over nearly $2.4 million in lease concessions to Metrazur, partly because an engineering study determined the MTA couldn’t meet Metrazur’s request that the space be kept in a certain temperature range.
“There was no evidence the MTA had conducted such a study before accepting the tenant’s request for the lease provisions,” the audit found.
“We recommend the MTA ensure such special lease provisions are, in fact, practicable before it commits to them.”