Home MTA A big Apple splash at Grand Central Terminal

A big Apple splash at Grand Central Terminal

by Benjamin Kabak

The Apple Store is coming, and Grand Central may never be the same. That, at least, is a dramatic take on the latest news.

Later today, the MTA Finance Committee will vote to approve a 10-year lease with Apple for the current Metrazur space, and after months of rumors, the computer and tech giant will begin preparation for the space. It is, for Apple, an ambitious undertaking. At 23,000 square feet, the Grand Central store will be the company’s largest, and Apple was the only company to respond to the MTA’s RFP for the space. They — and not the MTA — will pay Metrazur $5 million to terminate their lease early and have vowed to make only “modest alterations” to historic elements while keeping signage at a minimum. Still, the store’s presence will be felt.

First, the lease terms: Apple will be renting out the entire northern balcony for payments that start at $800,000 a year and grow to over $1 million by year ten. They will also be renting an additional amount of ancillary facilities for over $300,000 a year, growing to $400,000 by year ten. The lease contains two five-year options as well. In addition to the Metrazur space, the currently-closed northeast balcony will be a part of Apple’s retail store as well.

In its own materials, the MTA feels it is getting an above-market offer from Apple even though they were the only ones to respond to the RFP. They are paying significantly more than Metrazur does now. Apple has said that construction will last approximately 120 days once they obtain control over the property. So it seems as though opening in time for the 2011 holiday season would be optimistic at best.

What intrigues me most about Apple’s arrival is its sheer popularity. The MTA isn’t charging a sales percentage on the lease, but the authority anticipates that the presence of the Apple Store will boost gross sales to its other Grand Central terminal by at least 1 percent which would add $500,000 to the MTA’s take. The dollars, though, are the least of my concerns.

The staff summary of the lease has a sentence that piqued my curiosity. “Recognizing that the Apple Store is expected to attract many customers and entail a substantial back-of-house operation, Apple Metro-North and MTA Police Department personnel have engaged in intensive planning effort to ensure that Apple’s operations will be compatible in all respect, and not interfere with, the primary use of the terminal as a transportation facility.”

In other words, keep those long lines out of the way of harried commuters.

Even as Grand Central matures into a retail and food hub, it is as its most basic level a place that services people going somewhere else. It’s home to one of the busiest subway stations in the city as well as the largest number of train platforms in the world. Turning it into a destination has increased its popularity and made it a more pleasant place to wait for trains, but it still must get people to their destinations.

So Apple will have to compromise. When the iPad 2 came out in March, I checked out the line on 14th St., and it went from the corner of 14th and 9th Ave. to 17th and 10th Ave. That won’t work in Grand Central as commuters try to navigate gadget-crazed fans. Apple has vowed to make it work, and so has the MTA. In a few months, we’ll see it in action.

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17 comments

John-2 July 25, 2011 - 1:20 am

Good to know Apple plans to keep their profile to a minimum and allow the station itself to remain the building’s main visual attraction. But on product introduction day(s), I would think they’ll have to work something out with the Met Life people, since that’s the area mostly likely to suffer the brunt of the crowd overflow (and I doubt the building’s tenants would be thrilled with running a line straight out the back of the north balcony to 45th Street).

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Aaron July 25, 2011 - 2:08 am

Ben,

I don’t know if you (or any other commenter here) has an answer to this, but is that balcony accessible by wheelchair by some means? I’ve tried halfheartedly to find a way up there before, but up until Apple, I haven’t been enthused enough by what’s up there to try particularly hard ;p.

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Benjamin Kabak July 25, 2011 - 2:12 am

If my memory serves me correctly, there’s an elevator that goes up to the currently unused northeast balcony, and there’s probably wheelchair access from there. The staff summary also says Apple will help improve the space’s “relatively poor accessibility.” I take that to mean wheelchair access, but I could be wrong.

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Aaron July 25, 2011 - 12:56 pm

Yeah, I’d take that to mean the same thing.

Good luck tomorrow :). Make sure to include at least one snarky reference to NYC transit on the essays :).

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Todd July 25, 2011 - 8:14 am

+1 for the fantastic “big Apple” headline use.

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pea-jay July 25, 2011 - 8:26 am

I still think the MTA should have taken a percentage of Apple’s sales at that location. Consistent with Apple’s cut from its own developers, 1/3 of all sales should work just fine… 😉

In all seriousness, I think it is a great addition to GCT and a good deal for Apple too. A great number of its retail store customers actually just try out their products and people having 10-20 mins to kill before taking train might just step upstairs and try out the latest product. Whether or not a purchase is made at that location, another store or later at home online, Apple still wins. Part of the Apple success it is its marketing appeal and this location is all about visibility

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Scott E July 25, 2011 - 8:36 am

“They — and not the MTA — will pay Metrazur $5 million to terminate their lease early…”

Wait a sec… they already had a tenant in place, binding lease intact, and the MTA publicly released an RFP for someone to evict that tenant in favor of another, higher rent-paying tenant? I know very little about landlord/tenant law, but something doesn’t sound right about this, even with the $5 mil termination fee.

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Hank July 25, 2011 - 8:53 am

The way I understood it is that the Charlie Palmer group very publically announced their willingness to move on for the right price. Metrazur hasn’t been doing all that well recently and Palmer himself called the place “temporary”

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Dan from Roadify July 25, 2011 - 11:24 am

Interesting point – I read that as a way of the MTA not absorbing the cost though. Figure if the MTA found a way to save $5M then they would do whatever they could to make that happen..

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Al D July 25, 2011 - 9:16 am

Good point on the lines, and on first read, my thoughts were, how in the heck are they going to have block long product lines in GCT? Then, the answer occurred to me…stage the line in the Northeast Passage! It can be closed on product launch days. We’ll just have to wait and see…

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Kid Twist July 25, 2011 - 9:29 am

Apple can keep the lines under control by serving everyone more Kool-Aid while they wait.

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Dan from Roadify July 25, 2011 - 11:20 am

Love this idea…! haha

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Isaac B July 25, 2011 - 5:41 pm

> That won’t work in Grand Central as commuters try to navigate gadget-crazed fans. Apple has vowed to make it work, and so has the MTA. In a few months, we’ll see it in action.

Depew Place.

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Streetsblog New York City » Today’s Headlines July 26, 2011 - 8:58 am

[…] Biggest Apple Store Coming to Grand Central (NY1, 2nd Ave Sagas, […]

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Jerrold July 26, 2011 - 12:01 pm

“……..and not interfere with, the privacy use of the terminal as a transportation facility.” He must have meant “PRIMARY use”. Grand Central Terminal would be a hell of a place to get any kind of PRIVACY.

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At Grand Central, finding an open use for public space :: Second Ave. Sagas November 29, 2011 - 12:40 am

[…] $5 million to terminate its lease early, and the deal with the MTA is a lucrative one. Apple will pay at least $800,000 a year for the space and another $300,000 for ancillary storage facilities. The MTA believes the mere presence of Apple […]

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amberin November 30, 2011 - 8:37 pm

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