Apple's rumored store plans for Grand Central not happening?

The New York dream of shopping for an iPad 2 on the commute to work appears to have come to an end, according to a report by The New York Observer. An anonymous source within New York's Metropolitan Transit Authority (MTA) says Apple ended plans to open a 16,000 square foot high-profile store in the balconies of Manhattan's historic Grand Central Terminal last week.

Rumors of an Apple retail store coming to New York City's Grand Central Terminal, often referred to as Grand Central Station, began in early February with a report by Laura Kusisto in The New York Observer. Grand Central Terminal appeared to be an ideal candidate for Apple's fifth Manhattan location. It's the largest terminal in the United States, with up to 700,000 visitors a day, and it already hosts 68 retail shops and 35 restaurants. At Park Avenue and East 42nd Street, the landmark terminal is less than one mile away from Apple's Fifth Avenue store, which draws the most traffic among Apple's four shops in Manhattan and sells more product than its three sister stores combined, according to ifoAppleStore. Presumably, the originally planned Grand Central location would have shared the incredibly heavy traffic of the crowded Fifth Avenue store.

However, the complex and controversial process for applying for retail space in Grand Central may be responsible for undoing the deal, which never passed preliminary negotiations. Grand Central Terminal is classified as a historic landmark and tenants must sacrifice quite a bit of control to the MTA, including decisions about menu items, store design, architecture, lighting and store hours. Despite the excellent location and high foot traffic in Grand Central Terminal and Apple's proven ability to adapt its store designs to be more historically sensitive, it isn't in Apple's nature to give up so much control to another party.

The New York MTA, Apple and Landmarks Preservation were not available to comment about the deal, but Executive Vice President and Principal of Newmark Knight Frank Retail, Jeffrey Roseman, appeared to confirm Apple's abandonment of the Grand Central project via Twitter on Thursday.

"Lets see if Apple NOT coming to Grand Central, gets as much press as it got, when the rumor started," said Roseman.

[via BetaBeat]