Business

$1M hole in the wall

Steve Jobs (REUTERS)

Conde Nast spent millions when it hired Frank Gehry to design its cafeteria in its current headquarters at 4 Times Square — but the big bucks spent on its upcoming move to 1 World Trade Center will be used for something a little bit different.

The glitzy publishing giant is spending up to $1 million for a huge ventilation shaft that will poke through the façade of the north face of the glass tower at 1 WTC so that the Condé Nast cafeteria can have its own exhaust outlet, rather than tie in to the central flue used by the rest of the tenants that will run up the center of the building.

It was said to be the source of contentious negotiations between the Port Authority of New York and New Jersey, and the publishing empire headed by the billionaire Chairman S.I. Newhouse, Jr.

At one point, Newhouse and Chief Operating Officer John Bellando, who was handling the negotiations, threatened to walk away from the project.

The reason for the rhubarb was that the city building codes had been tightened up and would require far more inspections and cleaning of the venting system to prevent a fire hazard. A vent running straight to the outside would not have the same costly requirements.

The new Condé cafeteria is expected to take up at least half a floor in the new building and may also house test kitchens for Bon Appétit and the Gourmet Cookbook. The press was given a preview of the still-active construction site at the signing ceremony last month. The southerly view will overlook the World Trade Center 9/11 Memorial and command striking views of New York harbor and the Statue of Liberty.

Originally, Condé Nast wanted to blast through the shortest distance and out the southern wall, which some sources felt would have marred the aesthetics of the sheer glass façade overlooking the memorial.

The vent will be huge, about one story high and up to 25 feet wide, and would be visible from the ground. Sources said that originally PA Executive Director Chris Ward was going to nix the special exhaust vent, but eventually agreed to let Condé Nast have a special vent. However, it had to be on the north side, which will point toward Midtown.

“There was quite a bit of back and forth,” said one insider.

Last month, Condé signed a $1.9 billion, 25-year lease for 1 million square feet to house over 3,000 employees. The Durst Organization, which owns the present Condé Nast headquarters building in Times Square, also bought a 10 percent stake in 1 WTC and pres sured the PA to bow to Condé’s demands.

Ward low-keyed the be hind-the-scenes debate but acknowledged, “In order to accommodate them, we altered the ventilation system.” Asked for the cost, he estimated “a couple of hundred thousand, maybe a million. It was all handled in the lease.”

The design of the panel was open to debate. Originally, the plan was to just poke through and cover it with an unsightly metal grate. “It would have looked like something that you picked up at Home Depot,” grumbled one source.

Now, the new system will have glass panels specially cut to allow air to pass through to louvers connected to a vent in back of the glass.

But one source said that now that the PA has caved in to one tenant’s demands, the worry is that other future tenants will start demanding similar concessions. The Chinese trade group that was the first tenant has so far expressed no problem with connection to the central flue system.

“Hopefully, it won’t evolve into multiple acne spots all over the building’s façade,” said one insider.

Condé Nast spokeswoman Patricia Steele said, “We are not commenting.”

Looser apps

Apple has relaxed its guidelines on how in-app subscriptions are priced on its own app store. The story, first reported by macrumors.com, allows media companies to set their own prices for subscriptions without guaranteeing that the price at the iTunes store is the lowest available.

Apple had initially allowed only single copies of digital magazines to be purchased through its iTunes store when it first unveiled the iPad. The problem is that single-copy prices in the magazine world are generally priced much higher than an annual subscription.

But publishers were in a protracted battle with Apple, which did not want to share information from subscribers through iTunes. And publishers who had long ago mined that data for profit did not want to offer digital subscriptions with very restricted info on customers.

With that restraint, at first only a limited number of magazines signed up. The logjam appeared to be broken when Condé Nast began offering subscriptions for some of its magazines in May and Hearst began offering them with the June issue — but information sharing was still a sticking point.

Subscriptions offered through iTunes also had to kick back 30 percent to Apple. Now, they are free to set their own price outside of the app, and don’t have to guarantee that the price offered via the app is the guaran teed minimum price.

Some are ques tioning the sudden reversal. Despite Apple’s dominance of the tablet market, many publishers seem to be ready to strike deals using the rival Android system.

Apple, led by CEO Steve Jobs, now says that “apps can read or play approved content (specifically magazines, newspapers, books, audio, music and videos) that is subscribed to or purchased out of the app, as long as there is no button or external link in the app to purchase the approved content. Apple will not receive any portion of the revenues for approved content that is subscribed to or purchased outside of the app.”

OK! look

Time Warner has been in discussion with Richard Desmond about buying OK!, but many are still wondering if the whole picture is clear.

The news out of London first said the Northern + Shell Chairman Desmond was interested in selling all his print properties. Now, it appears Time Warner is taking a look, but according to reports, is now only look ing at the mon ey-losing US edition of OK!.

Said one source with knowledge of the situation, “It’s part of a bid pro cess and it’s very early. Anything can happen.”

OK! in the US was launched in 2005, with Desmond pledging that he would spend $100 million or more to make it profitable. Instead, however, the magazine has cost him $175 million so far — as Media Ink was first to report — making it the most expensive magazine launch in history. The magazine is still missing its rate base and is not a strong seller on newsstands.

That is in contrast to the British version, which made just over $29 million in 2010.

While Desmond made a lot of his money in X-rated magazines and videos, he has been trying to go legit for years and recently has seemed a lot more interested in developing the Channel 4 TV network, raising speculation that he wanted to sell all of his newspaper and magazine holdings in Britain.

There seems little chance that Time Warner would plunk down $35 million to buy the magazine, as has been reported in some circles.

One source insisted that the discussions so far have only centered on the US edition.

A spokeswoman for OK! declined to comment. kkelly@nypost.com