Let there be no mistake: Having an Apple store in Grand Central Terminal is a good thing. Apple is just the kind of anchor tenant that any landlord would want. The company’s decision to locate a store in the terminal last year was greeted with cheers, and why not—Apple is paying more than $1 million in rent this year to the terminal’s owner, the Metropolitan Transportation Authority.
A recent audit from the state comptroller, however, suggests that the MTA may have played a little too fast and loose in its effort to lure Apple into Grand Central. The report found that the MTA was discussing a potential lease with Apple years before it issued a request for proposals for the space, which was then occupied by a restaurant, and that Apple had an unfair advantage over other potential bidders for the space.
Those are serious charges, and they deserve serious consideration. However, the MTA’s response was notable and equally serious. The MTA’s chairman, Joseph Lhota, accused the comptroller’s office of “overt bias against the MTA and Apple” and charged that the office’s auditors had “no understanding of how high-profile commercial real estate works.”
Those are fighting words, and no government official makes those kinds of accusations without some basis in fact. So it stands to reason that nobody should jump to conclusions about what exactly took place during talks between the MTA and Apple.
One of Mr. Lhota’s phrases certainly rings true: Politicians and bureaucrats do not, in fact, have a reality-based understanding of how commercial real estate works, especially at the highest levels. Frankly, this was no ordinary transaction. The MTA’s goal of attracting a tenant like Apple was highly ambitious and certainly fraught with tough negotiations. A tenant had to be bought out. The prospective new tenant had to be sure that the deal made economic sense. And the MTA was obliged to make sure the transaction was transparent and aboveboard.
An impartial inquiry may prove Mr. Lhota’s point, and if it does, questions need to be raised about the comptroller’s report and the accusations of bias against the MTA and Apple. Just as the MTA needs to be transparent, so does the comptroller’s office. An audit is a powerful weapon—the public needs to be confident that findings are judicious and impartial.
If Mr. Lhota can support his accusations of bias, another investigation may well be in order.
In the meantime, Apple remains a welcome presence in Grand Central Terminal.
Follow The Editors via RSS.