With great fanfare, State Comptroller Thomas DiNapoli announced the other day that he will conduct an audit of the Metropolitan Transportation Authority’s ventures into real estate development. Specifically, the comptroller seems wary of a deal that the MTA cut with Apple, which is due to open a new store in Grand Central Terminal in the coming days.
Oversight of agencies like the MTA is always a good thing. The transit agency’s books have been the subject of endless controversy in recent years as great gaps appeared in its budgets. Mr. DiNapoli’s enthusiasm, then, is not such a bad thing.
But the comptroller should proceed with great care here. The MTA is doing something very smart—like a good entrepreneur, the agency has attracted a high-value tenant to serve as an anchor for the terminal’s retail operation. What’s more, Apple has pledged to contribute $2.5 million for ongoing capital improvements to one of the world’s great railroad terminals.
True, Apple is not going to share its revenue—which the company estimates will be $100 million a year. But the company paid $5 million to buy out the lease of the space’s previous tenant, and the MTA will charge Apple four times the rent it received from a restaurant that formerly occupied the space.
Mr. DiNapoli announced the audit amid grumbling that Apple received a sweetheart deal of some sort. The facts seem to indicate otherwise—in any case, the lease was bid competitively, and Apple was the only bidder.
The Apple store promises to drive retail traffic in the terminal, further transforming the transit hub into a Midtown destination for shoppers and tourists. That can only help other retail outlets in the terminal.
The MTA deserves credit, not criticism, for this venture into real-world entrepreneurship. Again, the agency should not be immune to oversight. But Mr. DiNapoli needs to examine this deal in the proper context. The audit should not be a platform for cheap demagoguery.