MTA looks to tie Grand Central rent to revenue amid COVID-19 ridership collapse
The MTA wants to tie Grand Central Terminal rent to a business’s revenue for the foreseeable future, according to a report — as the transit hub’s stores and restaurants continue to struggle amid record-low ridership.
Under the plan, certain commercial tenants would only be required to pay a percentage of rent based on how much money they’re making, MTA exec Janno Lieber told Eater.
The deal is on offer to NYC-centered small businesses without significant national footprints, Lieber said. Chains like Apple and Starbucks will not be eligible.
MTA ridership has collapsed since the onset of the COVID-19 pandemic in March.
As foot traffic disappeared in March and April, Grand Central commercial tenants struck for rent relief. They received it in the form of a temporary moratorium on payments that ended Aug. 1, according to Eater.
But ridership remains low. Metro-North, which runs in and out of Grand Central, saw just 66,000 trip per day last week, according to MTA stats — compared to nearly 300,000 before the pandemic.
On Monday, the Grand Central Oyster Bar closed temporarily after just 12 days back in business. Chef Sandy Igber said the eatery brought in just 3 percent what it earned over the same period last year.
Lieber said the proposed rent reduction — which still needs approval from the MTA board — would last until ridership returns to pre-coronavirus levels. The MTA expects that to be sometime in 2022.
Nicolas Dutko, founder of the Tartinery French cafe, told Eater the MTA’s proposal is a “realistic plan to survive.”
“This is going to motivate us to do our job and help us survive through this difficult time,” Dutko said.
In a statement, Lieber said the MTA is “considering all approaches to present to the MTA Board, including a plan to change fixed rent to a structure based on a percentage of business’ revenues as well as abating a portion of rent payments that had been previously deferred.”
“We know that our tenants are under immense pressure due to the pandemic, which has impacted businesses around the country and world, and we’re committed to working with them to provide a successful path forward, while also protecting taxpayers by maximizing revenue to support our transportation mission,” Lieber said.
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