Apple Has Targeted Manhattan For Fifth Store

February 8, 2011

While speculation on Apple’s next New York City store has focused strictly on Brooklyn, the company’s retail team has been scouting for a fifth store in Manhattan that will open later this year, before any new stores in the outer boroughs. The New York Observer reports—and IFO can confirm—that Apple is evaluating the retail space within the Grand Central Terminal (GCT) at Park Avenue and East 42nd Street, less than a mile south of the existing Fifth Avenue store. The location was chosen to draw a massive number of visitors away from the Fifth Avenue store, which is crowded with shoppers, tourists and ne’er-do-wells each of the 24 hours the store is open. Despite the expanse of the ground-level plaza and the soaring glass entrance, Fifth Avenue is the smallest store in Manhattan. And despite its small size, it sells more products than the other three Manhattan stores combined. That track record has made creating a nearby store a priority, higher than providing new stores to New York City’s other four boroughs. Update: A Cult of Mac story says Apple intends this store to be the chain’s largest, although retail space within the Terminal is limited.Grand Central Terminal opened in 1871 and features two underground levels of train tracks. At one time the train station was the largest in the world by number of tracks in service. The building has been renovated several times, in 1994 to add and reconfigure existing retail spaces, and in 2000 to upgrade the building and modernize some features.

Today, the terminal hosts 700,000 visitors a day, most hurrying to trains and the city’s busiest subway stop. But another 250,000 visitors a day pass through the expansive Main Concourse, the station’s crossroads that is now rented out for special events.

The 134,000 square-feet of retail space in GCT includes 68 shops and 35 restaurants, some on the main concourse level surrounding the Main Concourse, and others on the balcony level just below. Current major tenants include Banana Republic, Kenneth Cole and a Michael Jordan Steakhouse in about 6,000 square-feet of space each, and many other tenants in less than 1,000 square-feet. The historic Oyster Bar restaurant in on the lower level, along with a fresh food market.

Leasing of the retail space within GCT has been controversial, both for the process and the retailers who have been selected. The Metropolitan Transit Authority (MTA) issues a request for proposals (RFP), and interested companies then respond with a description of their retail operation and the amount they’re willing to pay per square-foot. The MTA reportedly has control over restaurant menus, the retail design and architecture, the lighting, minimum store hours and other details. The agency encourages retailers to sign 10-year leases.

According to reports in 2008, the MTA requires proposers to offer rents of about $300 per square-foot annually, with a three percent annual rent increase. At that time, tenants whose sales top a specified amount were also required to pay eight percent of their gross sales.

Apple previously considered a retail space on West 34th Street opposite the Empire State Building, and renderings of the possible store appeared on the Web. But the company later backed away from the project, apparently because the neighborhood was not upscale enough.

Download (pdf) the leasing plan and a brochure about the retail spaces. Also download a RFP for a vacant GCT restaurant space, as an example of the lease conditions that the agency imposes on retailers.

The Main Concourse within Grand Central Terminal has several retailers around the circumference and on upper levels. There is additional retail space on the next level below.

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{ 8 comments… read them below or add one }

mikekaufmann February 8, 2011 at 0747

We used to layover at a hotel near Grand Central Station when I was flying for UAL. I was a little late for pickup to fly out of Kennedy and was briskly walking through the Lobby of Grand Central Station when I noticed everyone was standing and listening to a Folk Singer there, singing “Amazing Grace.” This was near noon and the crowds would normally would be bustling through that Lobby. But, there we were, standing and listening to this beautiful rendition of “Amazing Grace!” That was a very New York Moment! I made it to my flight pickup in time, somehow a little more fulfilled.
By all means, put an Apple Store there!

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ZoetMB February 8, 2011 at 1001

Grand Central would be a great place for an Apple store EXCEPT that it would have to be a very small Apple store unless they took over the Rite-Aid space and even that is only 10,000 square feet. The only truly large space is the Oyster Bar (about 25,000 square feet) and I think there would be riots if an Apple store replaced that restuarant, which has been there forever.

There are also retailers on the outside of Grand Central (facing the street – either 42nd street or Lexington Avenue) and perhaps Apple is looking at one of those spaces, although most of those are relatively small as well.

But I don’t think a Grand Central location would pull many tourists away from the Fifth Avenue store, but it would definitely attract a lot of commuters with money, especially if it were inside the terminal.

Note that aside from the two restaurants on the upper level, no retail has been permitted in the main hall since the last renovation of the terminal. Previous to that, a large Kodak mural used to occupy one balcony. Many years ago (1960s-70s), hi-fi maker Acoustic Research used to have a small listening room where part of the Michael Jordan restuarant now resides.

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Ted T, February 8, 2011 at 1007

What became of the planned Wall St. Apple Store?

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SteveP February 8, 2011 at 1408

That was bull! :)

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Marktrek February 9, 2011 at 1312

Retail around Wall St sucks. Apple did a small bit of research and gave up on the idea.

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Aaron February 9, 2011 at 1639

Can’t wait to camp out for this!!

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Alan Levy February 17, 2011 at 0852

Vanderbilt Hall.

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ZoetMB March 6, 2011 at 2200

Even Vanderbilt Hall wouldn’t make it as large as the larger Apple Manhattan stores. And I think there would be a serious public outcry if that space, which is used for temporary exhibits and crafts fairs, were given over to commercial retail. In addition, the center of Vanderbilt Hall is a major entrance to the terminal. So you’d presumably be walking through the middle of the Apple Store to reach the main hall.

But maybe the MTA is willing to put up with that in order to get the lease revenue. But I think this would quickly turn political and I’m not sure Apple would want that kind of fight. Also remember that Grand Central Station is a public landmark and there are limits on what can be done with the building.

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