Published December 02, 2011
Just in time for Christmas, Apple (AAPL) is set to open a big new store in New York's Grand Central Station this weekend, and we wish them well. But it looks like there's something fishy going on. And how could it not be, considering that Apple's new landlord is a corrupt, tax guzzling monster called the Metropolitan Transportation Authority.
Every big city has an MTA. But New York's MTA is a multi-billion dollar mess, loaded with overpaid managers, a history of kickbacks and featherbedding, and weak-kneed administrators who'd rather raise fares and taxes than tackle the corruption.
Apple got one hell of a deal from the MTA for its new spot.
While other retailers in Grand Central have to kick in a bit of their profits to the MTA, Apple gets to keep every penny of its expected $100 million a year in sales. And while Shake Shack burgers and other stores there have to pay $200 a square foot for space, Apple gets the prime spot in Grand Central for 60 bucks a foot -- less than half what's normal.
So while the working stiffs of New York have to pay higher prices to the MTA for smelly, late subway and bus rides, the MTA's giving Apple the deal of a lifetime.
Why? In the vernacular of New Yorkeese: "something ain't kosher." And this may just be the tip of an ugly iceberg. In investigating the Apple deal, our colleagues at the New York Post discovered that the MTA manages tons of real estate in Manhattan, and the records about who gets what from where are a total mess. But what do you expect? Putting an organization as corrupt as the MTA in charge of billions in real estate is like letting a drunk get behind the wheel of a race car.
And now Apple's riding shotgun in that car without a seat belt. Again, we wish them well -- but stay tuned.