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Apple, the Grand Non Compete:

There's always been a huge question mark hanging in the air when it comes to the obvious "Does Apple receive preferential treatment?" question.

It's a question that matters when you consider some interesting facts:

Fact 1: Some Federal judges seem to bend to Apples will even in the most ridiculous of cases for reasons that are absolutely unknown.

Fact 2: Apple seems to be able to get patents passed even when their patents don't meet patentable requirements.

Fact 3: Apple seemingly has the ability to have patents approved faster than anyone else on the planet.

The problem getting the question answered is that neither a Federal judge, nor a Federally funded organization, is going to come out and tell us. Don't worry though because the great state that is New York seems to fearlessly provide us all with the answer.

New York State Comptroller Thomas P. DiNapoli has found that Apple was granted an “inside advantage” to open its Grand Central Apple Store location in New York City.

Like OMG girlfriend!

Apple was directly involved in setting 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.

WTF?

The Metropolitan Transit Authority (MTA) worked with Apple “behind the scenes” on the lease before it even asked other companies to submit proposals for the space.

Seriously?

DiNapoli’s office argues that Apple didn’t have to go through a “supposedly competitive process” in order to gain the highly sought-after space inside the massive train station.

@$!?*@$!!!

So there you go. It's true. Apple doesn't have to play by the rules of fair competition, not even for highly sought after real estate. Where else might they be receiving preferential treatments?

Tech Pings:
+Eli Fennell

#boycottapple #apple #grandcentralstation
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25 comments
 
I'd say unbelievable... but, sadly, it's not.
 
+Eli Fennell at least now there's proof in the form of this audit right?

Bad Apple rottens the Big Apple
 
Do you have the source article, btw?
 
Maybe it's because they have the money? ;)
 
+Tracey Wong A lot of companies have the money, but none of them were given the chance to compete for the space. The MTA supposedly has a compete clause for the valuable space within Grand Central station and by simply letting Apple take it without any competition the MTA could have lost money in this transaction. We, or they, will never know now.  
 
God forbid anyone display the slightest knowledge of how the retail estate market works works...
 
They get an advantage all over the place? And...um...So what? It's not what you know, it's who you know...everyone knows that....
 
Look at them wearing those stupid things around their neck and those apple shirts. Reminds me of the all their new ads now, which are, nonetheless, the most embarassing thing ive ever seen 
 
Wow, there's more Apple products (including the geniuses) than actual customers in this pic. Great use of the space MTA
 
Ah, so this is how business is done in the U.S.Interesting.
 
I worked on the leasing of all the new retail space in grand central after it was renovated in the 90's and di napoli has no clue what he is talking about.  leasing for space takes place behind the scene years in advance of available space all the time.  there is no requirement for competitive bidding on leasing, instead leasing for commercial spaces (especially in mall like environments) is determined by a wide ranging amount of factors (eg, things like total square footage to be rented, credit worthiness of the tenant, length of lease term sought, possible length and number of extensions, any potential additional rent, traffic driven by Anchor type tenants, etc.).  In every single commercial lease transaction the tenant is deeply involved in the negotiations and no two leases are ever the same (there is no such thing as a boilerplate standard lease in commercial leasing, as there is in residential leasing - IOWs lease terms are not written in stone, hey are all negotiable).  The point to be made is that it costs landlords money to have space not rented and there is often far greater benefit to landlords to have a desirable  long term, large sized, anchor tenant in place at lower per square foot rent, than to break up the space into smaller units with higher Rent per SF.  Grand central is a notoriously difficult space, because there is little  you can do in terms of outward modification, the retail spaces are generally small (at least on the inside of the station) and the overall traffic on the interior of the station is not typically trying to stop and shop (outside of at a small number of retailers that is).  Apple gave the MTA the opportunity to rent out one of the biggest and most difficult to use spaces within grand central for a long period of time (decades in this case), while  at the same time creating an anchor that drives traffic beyond that which naturally passes through the station (no small feat).  In the long term this allows Grand central to be in a better position to negotiate new leases for existing space  with existing or new tenants, especially as it applies to other existing, difficult to lease spaces within the station.  Could the MTA have gotten a better deal? Hell yes, IMHO, at least they should have insisted on sales based percentage rent.  However the deal that they got is not a bad one.  Di Napoli has no clue what he is talking about.
Kyle W
 
As soon as someone else comes along and starts building a better product apple will go away. Until that happens I am done hearing about it.
 
I wonder if they check to see if the judge and jury own any of the companies products before allowing them to take part in the trial. If they do I would think that would cause bias.
 
New idea: all Judges should go through a bribe test, which means that throughout their career it is expected that they will be systematically bribed at a random time, when they are they will need to report it, once a bribe is attempted they will need to report it. If not they are barred.
 
+Linus Sphinx - I don't think.  I know.  30 years (and longer if you count optional extensions) are commonplace for Anchor tenants.  Large net-lease tenants (think free standing big box stores) often sign 50-100 year leases on their space.  As for the bids, commercial real estate leasing is not driven by bids, it is primarily driven by market rent (ie, price per square foot for similar space for similar property in the same general area or market at a specific point in time).  There is enormous amounts of research and daily updates on that kind of information that the real estate industry relies on every single day.  It's not nearly as willy nilly as you seem to think it is.
 
If the space is worth between a and b, and apple pays 10x that amount and will do so for 10 years, but says they won't participate in a bidding....I'm sure anyone would just go with Apple. To be fair, they were very competitive, they may have even called in favors they have accumulated over the years, which is not an "unfair advantage" since they had to give something up to get those favors. Nothing is free, and if they played the right angles, bribed the right people, or called in the right favors, then I'd say they played a good game.
 
Seems like this always happens across all industries with small companies competing with large...politics and money! Its all on who you know!
 
+Darren Krusi - if you ever get a chance to visit this store you will quickly realize that your comment was idiotic and incorrect.  This is not only Apple's biggest current store, but also it's busiest, and that is saying something when you consider that there are 4 other apple stores in Manhattan alone, within less than 2 miles, Including the Iconic glass "CUBE", which is a major tourist attraction.
 
Welcome to the world where Corporations are more powerful than he government.
Enjoy your stay.

On a side note, article needs references. Statements not supported by examples can be 100% false.
 
I suppose every big company like Apple has some lobby in the parliament. I don't say it is right but that's the way some people are making $$. But the truth is that the the whole US patent system MUST to be remade.
 
+Andrew Primakov +Pranav Kapil
Here was the source article in question:
http://www.technobuffalo.com/companies/apple/apple-given-advantage-for-grand-central-store/

At the bottom you can see there's a PDF link called "audit" that's the document in question.

+Gabriel Walsh while I'm no comptroller, broker, or real estate agent the article was interesting enough to bring to light. I do appreciate you bringing your experience to the table because there's always more than one side to a story. Comments are a good way to hash out the half truths, and I thank you for that :)

I suppose the only oddity is why Di Napoli, the NY state comptroller, feels the way he does about the situation and then follows it up in a report?
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