Home MTA Economics Retail Thoughts: An Apple Store in Grand Central

Retail Thoughts: An Apple Store in Grand Central

by Benjamin Kabak

Newsstands dominate the underground retail scene. (Photo by flickr user lornagrl)

The MTA’s retail offerings are making headlines this week as one of the era’s most iconic computer brands is eying retail space in the country’s most iconic train terminal. As The Observer reported earlier this week, Apple may be gearing up to open a store in Grand Central.

As is often the case with rumors about future Apple Stores, none of those with any knowledge of the deal could talk to reporter Laura Kusisto, but ifoAppleStore confirmed Apple’s interest in the landmarked terminal. The process to rent space from the MTA is a long one involving stringent RFPs and tight control over the space by the landlords. Still, as Apple looks to siphon customers away from its crowded 5th Ave. store while tapping into the crowds that pass through Grand Central, it’s enticing rumor at least.

For its part, the MTA said little to Kusisto about a next potential tenant, and we’ll just have to wait out the RFP process. “We select tenants through a public process that features a formal request for proposals,” said Aaron Donovan, a spokesman for the MTA. “We don’t comment on prospective tenants outside of the process.”

Even if no one wants to talk, this rumors got me thinking about the MTA’s retail division. A frequent charge leveled by politicians at the authority concerns the way it does or doesn’t make use of its extensive holdings. As I walk through the subway system, I’m often struck by how little space is actually used. While some stations see peak crowds too overwhelming to squeeze more onto a platform, most have open areas to spare, and yet, retail is sparse.

Those stations that do sport stores do not seem to feature much in the way of use or creativity. A few storefront ATM locations populate the 42nd St./Times Square terminal while a record store earned headlines when it reopened a few years back. By and large, though, newsstands are all that we see in the subway, and even those are only set up at the big hubs.

The headlines about subway retail aren’t particularly pretty. A long-standing dispute in Jackson Heights simmered over during the fall, and that type of coverage is more representative of the MTA’s retail reality. They want to attract more stores, but something about the subway doesn’t work. Perhaps it’s being identified with something New Yorkers consider dirty and inconvenient, rat-infested and unclean. Perhaps its the ebb and flow of crowds that aren’t looking to shop and don’t notice the store.

Still, as Stephen Smith pointed at Market Urbanism this week, retail in the subway is a great missed opportunity. While urging transit agencies to maximize their real estate holdings, he ponders the economics of it all. “Does anybody know how much money such schemes can generate?” he asks. “Obviously allowing vendors to set up shop in train stations isn’t going to obviate the need for a thorough reform of the way this country does mass transit to make it profitable and sustainable, but can it amount to anything more than a drop in the bucket?”

As San Francisco’s BART looks to develop its retail offerings, here in New York, Jay Walder would like to do the same. The guys in charge answer Smith’s question by proclaiming profitability. The MTA CEO and Chair discussed underground retail with me in November. “We will make more money if we can improve the retail environment in the subway system, get greater value out of the spaces that we have there, improve the ambiance and the customer satisfaction,” he said while praising new retail initiatives at Times Square. “We’ll make more money than all of the naming rights deals.”

Ultimately, though, the rest of the system doesn’t carry the passenger volume of Times Square or the cachet of Grand Central that has seemingly enticed Apple to ask some questions. It might be possible to milk some money out of constantly crowded stations, but subway travel is so fleeting. Neighborhood stations are crowded for an hour or two every morning and serve as ghost towns after that. Would a up-market retailer take that risk? I don’t think so.

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Alon Levy February 9, 2011 - 1:21 am

Yes! It’s always useful to have high-end retail at train stations. The one problem I can think of is that having too much retail can clog passenger space, but Grand Central does not have that problem – try the other major train station in Manhattan.

As for the other issue – what to do about retail outside Midtown – I think the answer is to start by just trying to rent out space at the major stations. Underused transfer stations with a lot of space, such as West 4th, are especially valuable.

Peter February 9, 2011 - 8:28 am

Wheres the space at W 4th? WHO would want a store in the gloomy intermediate mezzanine? A couple of newsstands on the platforms – alredy on the 8th Ave level, two more to be built on the 6 Ave plats – is about it.

Al D February 9, 2011 - 9:08 am

This is the problem exactly. MTA property is generally not conducive to retail. Stations are dark, old, un-maintained, dirty and utilitarian in their design to serve 1 purpose only, a train station for people to enter and leave a train, quickly.

Alon Levy February 10, 2011 - 2:48 am

The mezzanine is huge. It’s gloomy, but so is Penn Station, which still has bookstores, clothing stores, and restaurants.

The problem is, of course, that the subway has ticket barriers and Penn Station doesn’t. This would probably force stores to be faster – i.e. nothing slow or full service, like a real restaurant. There still might be demand for a medium-end small bookstore.

John-2 February 9, 2011 - 8:29 am

Times Square used to have retail in it, and go back to the pre-MTA days and there was far more use of space for retail business within the system. The problem was that retail became associated with both more trash within the system and more clustering of people within traffic flow areas (similar to the current LIRR concourse problem at Penn Station). So the baby was pretty much thrown out with the bath water, as the twin problems were solved by tossing just about all retail out of the system, instead of trying to find businesses that wouldn’t generate trash and areas within the system where retail could be set up without impeding other passengers.

An Apple store fits the requirement that the business doesn’t generate on site garbage through disposable items, and other than around the release dates for the next generation iPad or other device, shouldn’t create crowding that slows other passengers. Obviously you can’t stick a high-end computer store in every subway station, but the MTA should be working at identifying locations that have extra space not in the main travel paths and businesses that would fit in those stations’ neighborhoods without increasing the trash on the tracks/platforms problem.

pea-jay February 9, 2011 - 9:01 am

Grand Central with its ebb and flow of commuter train passengers makes sense for a retailer like Apple. People waiting to catch a specifically scheduled train and have 5-15mins to kill are much more likely to stop and look (or even buy) than some dashing between levels at W4 or times sq. Most people that visit apple stores dont actually buy anything…it’s just to check out what’s new and make them more comfortable with buying in the future. And there too, a GCT location like apple can work. If I know I want to get an iPod or laptop, a person can theoretically leave 5-10 m early from work, make the purchase and still get home at the normal time.

Personally, I rarely ride the commuter train services, mostly NJTransit. So my few trips to Penn usually include enough time to figure out where I need to go and then wandering around the place looking at the stores to kill time. I almost never make it through that station without buying something…usually food. Look at Union Station in DC. That place is a great shopping mall and food court and attracts a significant number of NON passengers that come just for the shopping

Avi February 9, 2011 - 9:41 am

Pea-jay nailed it. At commuter rail stations where trains are running on a schedule people may show up early and know they have time to kill. But at a subway stop with trains running at intervals and the next one coming in an unknown amount of time, who is going to risk missing a subway to shop? Sure people might by a soda, candy bar, or magazine at a platform newsstand, but I just don’t see people shopping at a mezzanine level and risk missing a train.

Christopher February 9, 2011 - 10:26 am

I think the idea with shopping at subway stations is it would be more geared to people exiting the stations. People who need to grab some ready to eat meals for dinner at home, fresh flowers, a dry cleaners, or bike shops for people about to jump on their bikes. Ideally, like I’ve been saying for months about the large unused retail spaces at the Myrtle-Wyckoff the bike shops would include indoor bike parking as well. And be like the well used bike station in the Berkeley BART station in downtown Berkeley, CA or the new bike station at DC’s Union Station.

Will be miss a subway to shop? Not likely, but they might take a moment on the way home to shop.

BrooklynBus February 9, 2011 - 11:03 am

Those of us old enough to remember the many kiosks in the Union Square mezzanine remember how crowded they were all the time. People were shopping for records, knick-nacks, clothing, magazines, newspapers, general household items and of course food. Part of the reason they were removed was because they caused congestion, and created garbage. But you can’t argue that in a well-trafficked mezzanine the demand is not there.

Kid Twist February 9, 2011 - 9:21 am

I’m surprised that Steve Jobs isn’t asking the MTA to pay Apple for the privilege of having an Apple store in GCT.

Al D February 9, 2011 - 11:29 am

How do you know that he isn’t?!

Quinn Hue February 9, 2011 - 9:22 pm

When Apple built a store above the Clybourne stop in Chicago, they, in exchange for advertizing rights or something, renovated the station.

Al D February 9, 2011 - 2:32 pm

I can’t quite figure how that newstand at Union Sq can sell chocolate bars in the Summer when it is about 137 degrees in that 1 spot.

Alon Levy February 10, 2011 - 2:51 am

Maybe people are craving hot chocolate. 😉

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