State Audit Says Apple Has Unfair Advantage in Grand Central

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by Adel Manoukian Apple is under scrutiny after State Comptroller Thomas DiNapoli's office released an audit claiming the company had an unfair advantage when the Metropolitan Transit Authority (MTA) let it secure a spot in the Grand Central Station. In December of last year, Apple was allowed to open up a store in the iconic building's balcony. The audit states that the MTA and Apple negotiated a lease for over two years before the Authority asked other companies for proposals on the space. Before that request was released in May 2011, Apple tried to get reimbursed by NYC taxpayers in July 2009 for the $2 million it had paid the restaurant Metrazur to occupy the space at Grand Central. This was rejected by the MTA. The audit claims that the MTA allowed Apple to set a hurdle for rival bidders--the authority required companies bidding for the space to pay $5 million upfront, something Apple was able to do, according to NY Post reports. This gave Apple the competitive edge, according to DiNapoli. The State Comptroller performed the audit after a 2010 review of MTA real estate practices revealed issues and a second audit that year revealed that only two of the 12 recommendations to better their practices had been enforced, according to the comptroller's office. But MTA Chairman Joseph Lhota believes that the audit lacks accuracy and is "worthless" opinion, according to the NY Post. Jeffrey Rosen, the MTA's real-estate director wrote in a letter to DiNapoli's office that the authority intervened in negotiations between Apple and the restaurant because it saw an opportunity to have the restaurant surrender its lease which ends in 2019 because Apple would pay a higher rent and generate more revenue for surrounding businesses. The MTA says that Apple is paying $1.1 million in rent, four times what the restaurant was paying. The comptroller wants to have more oversight on public authority contracts worth more than $1 million so this is less likely to happen again.

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