The Metropolitan Transportation Authority’s deal to bring both the Apple Store and Danny Meyer’s Shake Shack to Grand Central Terminal moved one step closer to reality this afternoon when the agency’s finance committee gave the plan its official go-ahead.
The Apple Store will take over the terminal’s east balcony from Charlie Palmer’s Metrazur restaurant, as well as the northeast balcony, which is currently vacant, according to the agenda from today’s meeting. The initial term of the roughly 23,000-square-foot lease will be 10 years with the option for two, five-year renewal periods. Shake Shack’s 10-year lease will be for a 2,270-square-foot space in the dining concourse.
In his presentation to committee members today, Jeffrey Rosen, the MTA’s head of real estate, called the proposals “game changers” for the location.
The deal is indeed a coup for the MTA, which stands to generate significantly more rental income from the long rumored Apple lease than what the space had been previously commanding.The MTA has been searching for additional revenue sources in an attempt to fill a $9 billion budget gap. Last week, the agency cut its capital budget by $2 billion.
Metrazur was paying $263,000 per year and had more than eight years left on its lease, but this spring, entered into a conditional surrender agreement with the MTA that allowed the agency to solicit proposals from prospective replacement tenants, according to the agenda. Apple — the only business to respond to the MTA’s request for proposals — will pay $1.1 million in its first year at the space, which will be delivered “as is.”
The agenda described Apple as “perhaps uniquely capable of overcoming” the fact that the balcony area suffers from “relatively poor accessibility.”
The ancillary facilities Apple will lease include a section known as Carey’s Hole located in the second basement of the terminal, which will soon be vacated by Metro-North Railroad staff. Apple plans to build an elevator to the area at its own cost, Rosen said.
The New York Post first reported the news of Apple’s lease agreement this past Saturday.
Shake Shack, meanwhile, was not the highest bidder for its new location, but Rosen explained that based on the popularity of other Shake Shack locations, the expected influx of foot traffic to Grand Central “justified” the agency’s choice. The upscale burger chain has been expanding significantly in the New York area over the past several years.
With regards to both the Apple and Shake Shack agreements, Rosen said with a laugh, “our biggest concern is crowd control.”
There has been discussion about setting up a special plan for Shake Shack visitors to queue up on the Oyster Bar ramp.
The finance committee also approved leases with Spices and Teas, as well as Wild Edibles, which has been a tenant in Grand Central Market since 2001. The full MTA board is expected to approve all four leases at its meeting Wednesday.