Followup: Pathmark Closing; Residential Project Planned

We have more this morning on the closing of Pathmark at 227 Cherry Street, a story The Lo-Down broke Friday afternoon.  A spokesperson for the supermarket chain told us the 40,000 square foot store would shut down at the end of this year and that Pathmark’s parent company, A & P, was “relinquishing the (long-term) lease to accommodate a large scale residential development and improvement project.”

The questions everyone’s been asking this weekend, of course, are “who’s the developer” and what is meant by “large scale residential development?” Today there are no firm answers about that but events occurring in the past five years or so offer some clues.

In late 2007, community activists and elected officials mobilized after rumors  surfaced that Donald Trump or Extell Development wanted to put up one or two 50-story luxury towers on the Pathmark site.  According to legal documents, CPC Operating Company (an entity formed by Extell) agreed to pay $87 million to Pathmark for the rights to its lease at 227 Cherry Street (the grocery store parcel) and 235-247 Cherry Street (the Pathmark pharmacy site).  Pathmark claimed that Extell tried to back out of the deal when the real estate market soured.  A lawsuit dragged on for several years.

The development plans were also frozen in place by two other complex legal/regulatory issues: Pathmark’s 2007 sale to A&P and A&P’s bankruptcy in 2010.  It emerged from Chapter 11 this past spring.   Although Extell apparently wanted to extricate itself from the Lower East Side project a few years ago,no one would be surprised to find Gary Barnett’s prolific firm back in the game.  Buildings Department and city Finance Department records show no hints of architectural or engineering plans for the Pathmark site.

The parcels are owned by “Cherry Street, LLC,”  and tax bills are sent to an address on West 26th Street.  We received voice mail for “Central Parking Systems”upon dialing the phone number listed in public records.  The Two Bridges Neighborhood Council, which was instrumental in bringing Pathmark to the under-served neighborhood in the early 1980’s, released a statement Friday vowing to keep the store open as long as possible and to work towards a long-term solution.  Victor Papa, president of the organization, hopes to speak with the developer (whomever that may be) in the coming week.

The Cherry Street property was part of an urban renewal area (which has since expired).   The city’s Department of Housing Preservation and Development sold the site for less than $600,000, with the understanding that a supermarket would be operated there for 25 years (this period has also now elapsed).  In a statement on Friday, State Assembly Speaker Sheldon Silver said, I am deeply concerned by the announcement that Pathmark plans to close its store on Cherry Street.”  As a practical matter, however, elected officials and community organizers may have little leverage in this case.

A 2007 sales brochure unearthed by Curbed noted that the site could accommodate up to 1.1 million square feet under current zoning ordinances. It included diagrams of two towers in excess of 50 stories.   The statement from Pathmark we received on Friday indicated that the company was “preserving the right to operate (on Cherry Street) once the project is complete.” So it seems at least possible that a grocery store would be part of any new development.  But any new large-scale housing and commercial complex on the Pathmark parcel is  , of course, is many years away.