Apple And Home Depot Pull Plug On NYC Plans
Peter Slatin, Forbes/Slatin Real Estate Report 01.25.07, 4:16 PM ET
...Sources say image-conscious Apple, which leased the space from a joint venture between SL Green Realty Trust and developer Jeff Sutton, has had second thoughts about the location's coolness and had plans to put the site up for sublease. Apple had planned a 30,000-square-foot, four-story store with about 75 feet of frontage along 34th St., and had signed up to pay rent of about $5.5 million a year. Sutton and SL Green (nyse: SLG - news - people ) control the space on either side of the parcel as well.
But real estate sources say that, from the start, Apple had doubts about the compatibility of its leading-edge image with that of middle-America 34th St., at least as it currently stands. While strong retailers like Gap (nyse: GPS - news - people ), American Eagle Outfitters (nasdaq: AEOS - news - people ) and Forever 21 are happily ensconced along the block, "unfortunately, a lot of the old 34th St.--third-rate tourist merchants and rip-off artists--still remain, says one long-time retail broker.
That doesn't mean that Apple's business wouldn't have been good. Retail experts believe the store would have done very well, but Apple simply wasn't convinced that the location wouldn't somehow tarnish its image. Like, say, backdated stock options?
Against the backdrop of unfolding C-suite recklessness with shareholder assets, these two tales of high-level caution offer a fascinating perspective on what may be a fading edge. That both Home Depot and Apple had the moxie to make major commitments to these extremely promising stores, but in the end were unable to follow through, speaks volumes about the challenges facing anyone in the search for a new way forward.