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The Board of the Metropolitan Transportation Authority (MTA) have unanimously approved rent relief for the small businesses at Grand Central Terminal and other MTA locations. It creates a model that could be followed by all New York landlords seeking to help the recovery of the city.
The MTA has given a full rent abatement from April 1 through July 31. Rents already collected during that time will offset future payments. The new rent charges will be backdated to August 1. From then, the MTA will charge either 10% of its original rent or 10% of a store’s gross sales — whichever is higher. The original rent option increases to 20% at the start of 2021.
The move had been flagged earlier this month and was confirmed today. “The MTA is making it a priority to revitalize these stores and set them up for success. We’re doing this for the mom and pop shops that are the lifeblood of New York who through no fault of their own have been swept up in the pandemic,” said Janno Lieber, President of MTA Construction & Development. “We are developing a financial relief plan for our tenants that moves us from a fixed rent system based on their leases to a percentage rent system so that our interests are aligned. If they succeed, we just get a percentage of their revenue. We would put that in effect for the duration of the pandemic until ridership starts moving back to normal levels.”
The plan does not apply to national banks and retails chains and will run until the end of January 2023 or until ridership goes back to 75% of pre-COVID levels.
It is expected that tenants at Turnstyle Underground Market at Columbus Circle will get similar terms. The Market there is run as a private public partnership not directly under the control of the MTA. It is understood that Fulton Street Transit Center is excluded from this deal.