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.E-mail this story