MTA accused of giving Apple an unfair advantage in Grand Central bid

Ashleigh Allsopp
4 August, 2012
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Apple was given an unfair advantage in the bid for the retail store space overlooking Grand Central Terminal, according to a new report.

New York State Comptroller Thomas DiNapoli released an audit report on Monday, claiming that New York’s Metropolitan Transportation Authority worked with Apple for more than a year before the bid. The MTA apparently worked with the iPad maker on the lease, before issuing a request for proposals for the Grand Central Terminal space, reports Reuters. This led to just one submission: Apple’s.

According to The New York Post, the audit says that the MTA was requesting bidders to give $5 million for the space, a minimum that was already too high for many rivals, and therefore “severely slanted toward Apple.”

“While Apple may turn out to be a good tenant, the MTA set a troubling precedent when it played favorites and gave Apple a competitive edge over others for the Grand Central Space,” said DiNapoli in a statement. “Apple was directly involved in settling the terms of the lease and given exclusive access to information more than a year before any other vendor knew the Grand Central location was available.”

The comptroller claims that Apple signed a $2 million deal with Metrazur, the restaurant that formerly occupied the space, with the agreement that Metrazur would vacate the area five days before the MTA issued the request for proposals.

In response, the MTA called the comptroller’s audit “not fact-based” and “worthless.”

“The Comptroller’s audit staff clearly has no understanding of how high-profile commercial real estate works, giving the shockingly inaccurate and clearly biased audit they issued,” said MTA chairman and CEO Joseph Lhota. “The MTA’s lease process with Apple was open, transparent and followed both the spirit and the letter of the law.”

According to the MTA, Apple is paying £1.1 million in rent for 2012, which is four times more than the previous tenant had been paying.

The Post reports that Apple is the only retailer among the 100 in Grand Central Station that doesn’t share a percentage of its sales with the MTA.

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