Wheelin' and dealin' —

Cities offer free rent, other incentives to bring in an Apple Store

Because the stores drive additional traffic for nearby retailers.

Apple's Lincoln Park, Chicago store is located next to the North/Clybourn Red Line stop. Apple paid $4 million to renovate the stop and build a plaza on a disused bus turn-around.
Apple's Lincoln Park, Chicago store is located next to the North/Clybourn Red Line stop. Apple paid $4 million to renovate the stop and build a plaza on a disused bus turn-around.

Cities and shopping centers are apparently keen to attract shiny new Apple Stores to their areas. So keen, in fact, that Apple routinely gets special deals on leasing, taxes, and other incentives. Other retailers aren't jealous, however, because Apple Store customers add to the bottom line, according to The Next Web.

Among the deals Apple has received recently, The Next Web cites two prominent "sweet deals." One is the leasing deal Apple signed to move into New York's Grand Central Terminal. While New York State Comptroller Thomas DiNapoli thought the deal was too sweet in Apple's favor, the Metropolitan Transit Authority defended the deal, noting that Apple brought in more rent than any other tenant in the space would have. The deal also included $2.5 million in infrastructure improvements paid for by Apple, and is driving notable increases in revenue for nearby stores and restaurants in the terminal.

The other recent deal is one recently closed to bring a second Apple Store to Salt Lake City, Utah. While the details of the lease aren't public, the local ABC News affiliate reported that City Creek Mall offered the company five years of free rent to bring the store in. A commercial real estate broker in the area called the deal "unprecedented."

But in reality, it's not quite so unprecedented when it comes to Apple. For instance, Apple made a deal with the Chicago Transit Authority when it located its Lincoln Park store right next to a CTA subway stop that had grown decidedly dilapidated. In exchange for $4 million to renovate the stop, Apple received a free 10-year lease on the old, disused bus turn-around to build an open plaza just outside the store. The company also claimed first dibs on all advertising space inside the stop and potential naming rights for the station if and when the CTA implements its plan to sell those rights "for market value."

Other retailers located near Apple Stores aren't likely to complain about such deals, either. Apple Stores draw an average of 22,000 well-heeled customers per store, per week. And those shoppers like to spend money elsewhere, too. According to the co-owner of Michael Jordan's The Steakhouse restaurant, sales went up seven percent immediately following the opening of Apple's Grand Central store in New York.

Channel Ars Technica