It was just about the worst kept secret on the Lower East Side. Now city finance department records confirm Gary Barnett of Extell Development, one of New York’s biggest developers, is indeed the new owner of the former Pathmark site on Cherry Street. The property, listed as 250 South St., changed hands for about $103,400,000 on March 15. In a separate transaction, Extell paid $46.5 million to acquire Pathmark’s long-term lease. So the deal is worth closer to $150 million.
The Pathmark grocery store closed at the end of last year, amid rumors that Extell had made a deal for the site. Current zoning allows for a nearly one-million square foot building on the parcel, which features views of the East River. It also happens to be surrounded by a lot of public and subsidized housing. Barnett, who grew up on the Lower East Side, is known for his “over-the-top” luxury projects.
In the past, Extell has declined to discuss its plans. Documents filed last week show Pathmark has a “first right of refusal” on any new grocery store that might be built in the new complex. Many low and middle income residents fear the high-rise project will feature a high-end grocery catering to luxury tenants. The closure of Pathmark has left thousands of locals without a full-service store in the immediate vicinity.
The seller was listed as Cherry Street LLC/Park-It Management. Signing the agreement on behalf of Extell was Marc Kwestel, the company’s executive vice president for finance.
UPDATE 4:22 p.m. This afternoon we spoke with Victor Papa, president of the Two Bridges Neighborhood Council, a not-for-profit housing developer and tenant advocacy organization. Two Bridges owns, along with Settlement Housing Fund, a building adjacent to the development site, where the Pathmark pharmacy was formerly located. Papa said his organization intends to reach out to Extell, the new lease-holder of the pharmacy site. It’s unknown whether the company intends to find a new tenant or whether it has interest in purchasing the building.
Papa said he is “very concerned” about the prospect of a big building (it could be 40-50 stories tall) going up on Cherry Street. Neighbors will obviously be unhappy about this type of “out of scale” project. But there may be little they can do about it. Zoning in this part of the neighborhood permits large-scale construction. Extell will likely be able to circumvent the local community board as well as the City Council.