Thursday, May 29, 2008

Good Observations on Supermarket Shortage

Our supermarket rally and press conference yesterday got a good write-up at the NY Observer's real estate blog: "The battle to save the Key Foods in the Sound View neighborhood of the South Bronx has brought the issue of the city’s dwindling stock of supermarkets into sharp relief, and become the centerpiece of the United Food and Commercial Workers union’s campaign to preserve local supermarkets."

The lost market crisis is a focus of a City Planning report: "New York City has lost one-third of its supermarkets over the past five years, most of them in the outer-boroughs and in low-income neighborhoods, according to a recent report by the Department of City Planning. About 750,000 New Yorkers live more than five blocks from a grocery store in neighborhoods hardest hit by the closures, meaning they have little access to fresh produce or affordable groceries."

This loss has serious economic repercussions. As the UFCW Local 1500's Pat Purcell told the Observer: "Assuming that a minimum of 35 people worked in each of the 100-plus grocery stores that have closed, at least 3,500 jobs have been lost, estimated Mr. Purcell." And this is on top of the lost tax revenues, dwindling neighborhood foot traffic, and vanishing entrepreneurial opportunities for immigrant businesses."

This is thrown into sharp relief in this week's Crain's NY Business. Crain's supermarket story features the fact that many of the Dominican supermarket owners, folks who revitalized inner city food retailing, are searching outside of the city for better economic opportunities: "The cost of operating supermarkets in New York City was impossible," says Eligio Peña, who closed the last of his six Associated supermarkets here in 2000 after 30 years in business. Today he co-owns 26 Compare Foods markets in the Carolinas."

The shift in focus dramatizes just how difficult NYC's economic environment has become-and many point fingers at Mayor Bloomberg's commercial real estate tax increase in 2002 as a major culprit: "The industry's main beefs with the city center on high taxes and rent. Veteran grocer Cesar Ramirez is a prime example. Although he still owns three C-Town markets in upper Manhattan and the Bronx, in recent years he has focused his energies on Florida, where he has opened five Freshco stores. "I definitely wouldn't expand in New York unless there were tax rebates and subsidized rent," says Mr. Ramirez. He notes that he has been able to hold on in New York largely because he owns the real estate at two of his locations."

All of this was a focus of the remarks given at yesterday's press event by Brooklyn BP Marty Markowitz: “In some neighborhoods," said Brooklyn borough President Marty Markowitz, "banks are taking every available retail site because they pay more than other businesses and in other neighborhoods we are being overrun by the drug chains and what’s closing?
“Our supermarkets. Not everybody gets Fresh Direct, not everybody goes to exclusive gourmet grocery stores. They go to the Key Foods and the Associateds. We have got to get the government to approach this with ideas that make it profitable for supermarkets to open new stores."

And we also need to hold landlord pigs at the trough like Vornado accountable for their selfishness. As we told the Observer: “Vornado is a real public player," Mr. Lipsky added. "They are a finalist in the 125th Street development. They are asking the Port Authority to intervene to buy Madison Square Garden. They are always in the loop to ask for public benefits. Now if you’re going to be in the loop to ask for public benefits and you’re going to grow your company on that basis, then you have to be a good corporate citizen. And throwing out the last big supermarket in the south Bronx neighborhood of Sound View is not being a good public citizen.”

As we have been saying, this is only the beginning. And we hear that Vornado's coming in to dinner, so to speak, with Speaker Quinn. Hey Chris, "this dud's for you." Read Vornado the riot act, and be a real hero for the good folks in Soundview and the workers at Key Food-rediscover that old feisty spirit. We know that you can.