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SFO is still struggling to pick up airline passengers, but four new stores, including longtime local bookstore Green Apple Books, are arriving at Harvey Milk Terminal 1.
The supervisory board voted unanimously on Tuesday to approve leases with Green Apple Books and its partner Hudson Group, as well as shoe retailer Johnson & Murphy and food vendors Culinary Heights Hospitality and Proper Food.
Construction is scheduled to begin in October 2023 and the store is slated to open in March 2024, although that may change depending on airport traffic, said Pete Mulvihill, co-owner of Green Apple.
The 12-year lease provides for a minimum annual rent of $ 460,000 as long as airport traffic reaches 2019 levels for two months, 8% of sales up to $ 2 million and 10% above $ 2 million. dollars.
An exterior view of the Harvey Milk 1 Terminal at San Francisco International Airport. Green Apple Books will open a location in the terminal.
Stephen Lam / The ChronicleThe expansion is a gamble that San Francisco’s tourism sector will recover, despite SFO losing more passengers than any other U.S. airport during the pandemic, in part due to its status as a gateway to the United States. ‘Asia, where the coronavirus originated. The airport expects a full recovery of passengers by 2023.
The construction of the space will cost at least $ 1.5 million. That’s more than Green Apple, which was founded in 1967, could afford. But Hudson Group, which has about 1,000 stores across the country, will be the majority owner and responsible for renting and paying staff, Mulvihill said.
“The way the deal is structured, with Hudson as a partner, Green Apple doesn’t have to make a big upfront investment,” Mulvihill said. “We could have gone alone. We thought it was the safest way to grab an opportunity like this. “
Revenue projections at the airport location are much higher than those at existing Green Apple stores, which justifies the higher rent, he said.
“It’s a low-margin business. The advantage of the airport is the volume, ”he added.
Green Apple staff will make every effort to showcase local authors and other favorites, making sure this is “not a generic airport store,” although some books are more current than existing Green Apple locations in San Francisco, he said.
The expansion comes shortly after Green Apple closed its annex next to its main store in Inner Richmond. The consolidation was primarily aimed at reducing inventory other than books such as used magazines, records, gifts and DVDs, and not because of pandemic distress. There have been no layoffs at the 40-person company, which also has locations in the Sunset and operates browser books on Fillmore Street.
“Business is mostly back. Overall, we’re pretty close to pre-pandemic, ”Mulvihill said.
“In the long run, this is not enough,” he added, as rent, health insurance, salaries and other costs keep rising.
Roland Li is a writer for the San Francisco Chronicle. Email: [email protected] Twitter: @rolandlisf
