Coming Soon: New restaurant spaces for GCTBy
As the MTA looks to better utilize its real estate holdings, the authority announced this week plans to solicit proposals for two new restaurants in Grand Central. The two areas could add nearly 17,000 square feet of dining space in the Terminal and would open next year, in time for the building’s centennial celebration. If all goes well, the MTA could realize up to $20 million annually from these spaces.
“Grand Central will always be the greatest train station in the United States and the crown jewel of the MTA’s transportation network,” MTA Chairman Joseph J. Lhota said in a statement. “It’s a focal point for the economic and social life of the region and a superb setting for the daily business of moving people. At the same time, over the past 15 years, it’s also been transformed into one of the world’s most well-known destinations for shopping and dining. These latest additions will only heighten its reputation.”
With a new Apple Store attracting crowds and a Shake Shack on tap, Grand Central has become a major attraction in midtown. These two spaces could further cement its reputation as a foodie destination. The larger of the two consists of up to 12,300 square feet and includes the west side of Vanderbilt Hall, the former waiting area and current home of the GCT Holiday Market. The other space contains 4700 square feet above the Grand Central Market with views of Lexington Ave. According to some reports, the authority hopes to attract a farm-to-table restaurant for the smaller space.
A Crain’s New York article delved further into the MTA’s thinking behind these new space offerings:
Adding the restaurants is part of the MTA’s plan to wring more money out of its assets. The agency is also hoping to lease or sell several of its buildings. Additionally, the MTA is seeking private companies to manage Fulton Center downtown—formerly called the Fulton Street Transit Center—to make it a shopping destination. Private firms may also manage the future retail spaces in the Long Island Rail Road station being built underneath Grand Central, Crain’s reported last week.
The gross revenue from Grand Central retail leasing and special events hit $27.4 million in 2011. That’s a mere 0.22% of the MTA’s operating expenses of $12.5 billion. Still, every little bit helps at the cash-challenged agency. The MTA isn’t requesting a minimum rent for the new venues, leaving the restaurateurs to make a proposal. However, based on assumptions that the restaurants would each generate between $8 million and $10 million a year in sales, a rent of $80 a square foot to $100 a square foot seems reasonable, sources said. The agency typically takes a portion of the sales above an unspecified amount. Currently, the existing restaurants average sales of $750 a square foot.
Restaurateurs interested in the Vanderbilt Hall space will have to devise a plan for coexisting with the events held there, especially the holiday market, which takes up the entire venue. The MTA isn’t offering advice on that, but it is asking the winning bidder to serve breakfast, lunch and dinner. “We want to see what kind of ideas they come up with,” said Ms. Marshall, adding she could see a spot like SoHo brasserie Balthazar working well.
According to the report, the authority will require the restaurants stay open seven days a week, and chains will be excluded. The MTA is hoping to draw in New York-based restauranteurs for a train depot that is an icon of the city. This is the type of commercial development the MTA should be encouraging in its properties.