Descend into the 42nd Street station at the Port Authority Bus Terminal, walk the lengthy mezzanine under Eighth Avenue, and the first thing you’ll likely notice is the blight of more than a dozen shuttered shops.
Shelves that once held items for sale lay strewn behind glass storefronts. A former newsstand with a tiered candy kiosk is caked in grime. Stacked buckets of construction sealant peek from behind a haphazardly papered-over shop window.
The scene is very different compared to much of the twentieth century when newsstands, candy stores and shoe-shine shops peddled goods and services to commuters navigating packed subway mezzanines and platforms.
Today, a staggering 83% of the subway spaces that in 2019 could have hosted retail are vacant or have been repurposed by the Metropolitan Transportation Authority, quietly helping to fuel the perception that the system is desolate and dangerous. Only 57 of 195 available shop spaces host tenants; another 17 are under construction and 30 more are in contract negotiations, according to the MTA. The authority’s real estate team said it has taken dozens of the more tricky-to-fill spaces offline for storage and other internal uses. In March 2019, the MTA said it had 326 active retail spaces in the system, and roughly 130 of those, or 40%, were vacant at the time. Based on the 2019 figure, just 17% of subway shop spaces are currently occupied.
It was once convenient for straphangers to pick up items on their way here or there. But like zombie shopping malls above ground, empty subway shops are a stubborn manifestation of changing consumer habits (they’re shopping more online), exacerbated by Covid-19 shutdowns. At a time when subway ridership has mostly returned — hovering around 70% of pre-pandemic levels on weekdays — most retail tenants have not.
The MTA is trying furiously to fill the spaces — reducing rent in some cases, trying out new uses in others, even offering free rent for public art installations — to maintain a sense of vibrancy and soften the perception that riding the subway is risky. A spike in crime in recent months and a few high-profile incidents, including a Downtown Brooklyn shooting, haven’t helped. Street-level retail is in a much healthier position: Retail rents in Manhattan have risen for six consecutive quarters, and the number of available ground-floor spaces has dropped 33% from a mid-2021 peak, according to CBRE data.
“We’re entertaining different types of uses,” said David Florio, the MTA’s chief real estate transactions and operations officer. “That’s been the most important: to keep it live, keep an activation because people like to see something, basically, open and activated within the subway.”
Florist Chris Christodou has run Gflorist in the Rockefeller Center station since 1981, and he said that riders who stopped by daily fell out of the habit while working remotely. “Customers I used to see all the time, I don’t see anymore,” said Christodou, 62.
When Covid first emerged, GFlorist had little choice but to temporarily close its shop at the West 47th Street and 6th Avenue mezzanine. When the business returned, reduced foot traffic made for a lackluster rebound.
“This generation doesn’t believe in flowers as much,” Christodou said with a shrug, amid vibrant bunches of lilies, pastel roses and cheerful sunflowers wrapped in waxy paper at the small underground store. “Flowers are a luxury. If you’re worried about paying your bills, you’re not going to buy flowers.”
‘Nothing worse than an empty space’
Retail space in the subway generated $9.5 million for the authority in 2019; transit officials told Crain’s that they expect a little over half that amount, or $4.3 million, this year. That’s a sliver of the MTA’s $19.3 billion annual budget. But as a highly visible part of the system, bringing an extra bit of life to stations and platforms is just as much about enhancing the customer experience as it is about squeezing every penny out of MTA assets.
“Transit retail has to be looked at as eyes-on-the-street, as an amenity,” said Susan Fine, who served as the MTA’s director of real estate in the 1990s, where she led the transformation of Grand Central Terminal into a popular retail destination.
Fine, now the principal of Fine Development Partners, went on to develop the MTA’s first privately financed subterranean retail center in 2016: a 325-foot-long corridor of diverse food offerings, trendy shops and kiosks called the Turnstyle Underground Market. Located at the 59th Street-Columbus Circle stop, the Turnstyle shops are outside the actual subway turnstiles, so customers don’t have to pay a subway fare before shopping. By contrast, most subway retail is beyond turnstiles in station mezzanines and on platforms.
Turnstyle, which features roughly 40 storefronts, was a smash success when it first opened. It has suffered the trials of Covid as well, and on a recent weekday, just over half of the storefronts and kiosks were open for business. But even at half occupied, it’s a success story for a system rife with vacancies.
“The urge to linger in the subway has gone,” said Fine. “When the spaces are dark it makes the station feel unsafe. There’s nothing worse than an empty space.”
More than optics
Addressing subway safety — dangers both real and perceived — has become an escalating fixation for elected officials. In March, Gov. Kathy Hochul now infamously deployed hundreds of National Guard soldiers into the subway to assist police with bag checks. Mayor Eric Adams is preparing for expensive investments in AI-equipped metal detectors in the system beginning this summer. The perception of safety will be key as MTA officials seek to lure drivers out of cars and onto mass transit with the mid-June launch of congestion pricing.
All the retail vacancies across the system aren’t helping. Neither has the legal battle that broke out earlier this year between the MTA and the real estate firm that oversees retail in Lower Manhattan’s Fulton Transit Center, an 190,000-square-foot, four-story retail hub at the mouth of multiple subway entrances. Mall giant Westfield is trying to break its 20-year lease with the MTA after just 10 years, blaming persistent crime and unruly behavior for scaring away tenants.
On the opposite end of the spectrum, Turnstyle became one of the first transit retail hubs to make a post-Covid comeback, in October 2020. At the time, MTA Chair and CEO Janno Lieber touted the relaunch as an “important moment” for the rebound of transit and the economy.
Kristel Delevante opened her LanaBlu Boutique in Turnstyle in 2022 after running a pop-up kiosk in the corridor. At the heart of the store are racks of Lucite hoop earrings, beaded bracelets and pendant necklaces. Nearby clothing racks showcase bohemian skirts and tunics.
“It’s slowly coming back,” said Delevante, 50. Turnstyle was offering short-term leasing and discounts on rent, which were a huge help, she said, and enabled her to make the jump to brick-and-mortar. “The shorter lease means there’s less pressure; knowing I can pack up and leave if the business is not in sync is very helpful.”
Fine said she sees transit retail as an opportunity for small and first-generation business offerings. Ideally, she would encourage the city’s Economic Development Corp. or Department of Small Business Services to partner with the MTA to pay for build-out costs or subsidize businesses’ operating expenses.
“The businesses which made me happiest at Turnstyle were when we had all kinds of ethnic foods,” said Fine, who reminisced about the Bolivian-style empanadas stuffed with brothy stews sold by a former shop at the market.
“All of these were first-gen businesses that were giving it a try because Turnstyle was basically plug-and-go, since we built the spaces,” said Fine. “Make it easy for them, and then you’re doing something else, which is allowing for wealth creation and creating jobs.”
Back to the future
Until the 1970s, vending machines were the dominant form of retail in the city’s transit system. Commuters could slot a penny or a nickel into a squat glass-globe device or a tall, skinny vending machine and receive chewing gum, peanuts and chocolates, said Polly Desjarlais, content manager at the New York Transit Museum, which is located in a decommissioned subway station in Downtown Brooklyn.
“Imagine you were tripping over them,” said Desjarlais. “We’re talking about thousands and thousands of machines.”
Some were quirky by today’s standards. Alongside machines offering sweets and nuts, riders could step onto scales and weigh themselves. Some weighing machines came with the carnival-esque novelty of providing readers with a fortune, or as the advertising on some of the machines put it, “Your Wate and Fate.”
Many people at the time didn’t own home scales, so in a sense, they were a “public service,” Desjarlais said. That ethos is at the core of transit retail: Create useful amenities for riders while generating revenue for the system.
“If you think about the products they were selling it was, ‘We want you to stay energized, we want you to have a snack,’” Desjarlais said. “I imagine it was a combination of we can provide more convenience to passengers and we can make money doing it.”
It wasn’t until December 1948 that the subway boasted its first retail tenant in four built-out shops on Manhattan station mezzanines. The Loft Candy Company leased four underground storefronts for an annual minimum of $10,000 at each space; the deal also provided 10% gross sale payments to the city, according to a 1949 newspaper article in the New-York Tribune.
The subway concessions that following year, excluding advertising, generated more than $1.3 million in revenue for transit. Adjusted for inflation, that works out to roughly $17 million today, or four times what the MTA is projecting for 2024.
Ironically, part of the MTA’s plan to revive its subway retail is a throwback: Florio, the MTA’s real estate transactions chief, said the authority is negotiating with a company to place vending machines at 26 sites — some bulky CVS vending machines also currently pepper the system — and is about to close a deal with a national bank for ATMs at four locations.
Separately, the MTA has invited arts groups and nonprofits to reimagine a couple of dozen hard-to-fill subway retail spaces — rent-free.
Life underground — at a cost
Operating a business in the subway comes with some inherent challenges. The MTA has lengthy retail design guidelines that touch on everything from signage to lighting to the materials used for façades. The agency doesn’t allow unlicensed smoke shops selling cannabis products, for example, which have proliferated above-ground. X-rated “adult uses” are also prohibited.
What’s more, the details of making a space ready for retail are subject to MTA approval, and state preservation reviews kick in if a shop resides in a historic structure. The work on older underground stations can be particularly laborious because many lack water or sewer lines, which can make selling freshly brewed coffee or food prohibitively expensive.
Most crucially, the startup cost can be four times that of street-level shops due to insurance, fire suppression equipment and other expenses, according to the Eno Center for Transportation, a Washington, D.C.-based policy think tank.
The MTA works with tenants on rent abatements if a major utility upgrade is necessary, Florio said. However, providing turn-key spaces for retailers would be far more attractive.
Unfortunately, transit agencies are in an especially difficult position to make that happen compared to the private sector, said Mike Smith, senior managing director of real estate at Streetsense, a D.C.-based firm that works on retail strategies with transit agencies, including the MTA.
“It is a different ballgame for public institutions in what kind of abilities they have,” he said. “It’s not apples to apples, for sure, and yet at the same time they’re competing for the same retail tenants that the private sector is.”
Christodou, the florist, said business was at its peak in the 1990s, with a healthy mix of corporate accounts, phone-in orders and grab-and-go bouquet purchases. Subway retail had a captive audience and a consistent stream of commuters.
GFlorist paid nearly $3,500 in rent per month in 2019; today the business pays about $2,500 through a rent abatement with the MTA, according to Christodou.
The MTA created a rent relief program in October 2020 following pleas from struggling retailers. Under the policy, qualifying tenants had their rents reduced to 10% of their base rent or 10% of a store’s gross sales — whichever was greater. About 105 tenants across the MTA’s network originally took the agency up on adjusted rents.
The policy was expected to sunset by the end of 2023, or when ridership hit 75% of pre-Covid levels. But after transit officials reassessed the retail climate in September 2023, the MTA board decided to extend the policy through 2025. Participating subway tenants’ rents increased to 30% of their base rent with 3% annual increases.
Inspiration from abroad
Retail experts point to international counterparts the MTA could draw inspiration from when it comes to trying out new strategies for underground retail.
Seoul and Tokyo boast modern vending machines with an array of creature comforts and display art to enhance station esthetics. The London Underground has partnered with brands for pop-up kiosks in and around stations. Some European cities offer pay toilets, where transit customers are charged a small fee to use the restroom. In New York, pay toilets are currently illegal under a 1975 state law.
“Stations are community hubs,” said Smith, the retail transit consultant. “The more we can think about them as such — as opposed to just a utilitarian place to get people in and out of — whether it’s commercial, cultural or otherwise, I think will only enhance the experience for riders.”
Recently, the MTA has begun covering up some empty storefront windows with advertising. The authority has also launched a rent-free pilot with Midtown East-based arts nonprofit Chashama, which connects visual artists with affordable workspaces, including at the Fifth Avenue-53rd Street station near Central Park.
There, Bronx-based artist Natalie Wood has converted a former retail space into a living installation that features more than 350 succulents woven into chairs and other furniture. The art, Wood said, is inspired by her winding canoe trips along the Bronx River where she often spots junk being slowly reclaimed by nature. The installation will be on display through August.
Commuters similarly navigate subterranean channels littered with long-empty shops on the banks of mezzanines and platforms. Instead of nature intervening, transit officials will need to have a hand in revitalizing defunct spaces to grow the future of mass transit.
“I think doing interventions like this really refresh the subway experience and kind of bring back that magic that New York has that I think everybody’s wishing for after Covid,” said Wood. “I think it makes the subway experience a bit more enjoyable, right? And it connects you to a greater community.”
Caroline Spivack , 2024-04-17 11:48:06
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