Gristedes Considering Bankruptcy & Latest On Roosevelt Island Main Street Retail Revitalization - Master Leaseholder Hudson Related Listening To Resident Concerns and Town Hall Retail Meeting On October 20

Roosevelt Island Gristedes Image From Roosevelt Island 360

The NY Post and Gothamist both recently reported that Roosevelt Island's favorite (cough,cough) supermarket chain, Gristedes, may consider entering bankruptcy. According to the NY Post:

This billionaire is crying poverty.

Gristedes owner John Catsimatidis has threatened to shutter the supermarket chain if he can’t renegotiate terms of a $3.5 million wage settlement with his workers.

The once -- and possibly future -- mayoral hopeful recently told a judge that “Gristedes is suffering” due to the weak economy and last year’s bankruptcy of grocery giant A&P and its Food Emporium chain....

{UPDATE 9/22 -  Had a telephone conversation with Gristedes Chairman John Catsimatidis who emphatically stated that Gristedes is not considering in any way going into bankruptcy. Mr. Catsimatidis was very pleasant and emphasized that if there are problems with the Roosevelt Island store he wants to know about it. Will have more on this later.}

Back to the original story from 9/21.
Many Roosevelt Island residents over the years have expressed the fervent wish that the Roosevelt Island Gristedes be replaced with another supermarket. If Gristedes does go into bankruptcy, that may present an opportunity for new Main Street landlord Hudson/Related to bring in another Roosevelt Island supermarket operator.

One of the benefits of having Hudson/Related as the new Master Leaseholder and operator for the Roosevelt Island Main Street stores instead of the Roosevelt Island Operating Corp (RIOC) is that, unlike RIOC, Hudson Related has the expertise and ability to enforce lease provisions that Gristedes and other current tenants may not be complying with and evict them if legally feasible.

What's the latest on the Roosevelt Island Main Street retail situation? Hudson/Related took over Main Street retail operations from RIOC in August. Hudson/Related representatives have been meeting with  residents and store owners recently including a September 15 meeting with Roosevelt Island Residents Association (RIRA) President Matt Katz, Island Services Committee Chair Aaron Hamburger and Planning Committee Chair Frank Farance. I asked the RIRA meeting participants to comment on the meeting.

According to Mr. Katz:

The Roosevelt Island Residents Association has arranged a Town Meeting to supplement the retail surveys distributed throughout the Island by the Hudson Company. The purpose is to offer residents an opportunity to meet with the Master Lease holders and to engage in a conversation as to what kind of shopping and restaurants we want and how to make our retail corridor more attractive. We have set Thursday, October 20 at 7:30 p.m. for this important meeting, which will be held in the main sanctuary of the Good Shepherd Community Center. This forum may be the only opportunity for the Roosevelt Island community to share their needs and preferences with the developers and we hope for a large turnout.

Matthew Katz

President, RIRA

Mr. Hamburger added:

We had a very good meeting with Dave Kramer and Andrew Jackson. Basically, Dave talked about his concept of making Main St the vibrant center of our "village".

We didn't get any details, just his general thinking. We did help him plan a community meeting which will probably occur in late October. We're having troubling scheduling  at Good Shepherd - they seem all tied-up every Tuesday & Wednesday evening . 

Anyway, the meeting will likely start with a power-point presentation by Hudson-Related, then thrown open for the questions, comments, etc. from the public.

and Mr. Farance:

Matt Katz (RIRA President), Aaron Hamburger (RIRA Island Services Chair), and I (RIRA Planning Committee Chair) met last Thursday with David Kramer and Andrew Jackson.  Mr. Katz had called the meeting so we could plan for community meetings on the Retail Master Lease effort.

Here's some of the key points discussed in the meeting:

- Mr. Katz would call for a town meeting (since scheduled for October 20, 7:30 PM at the Good Shepherd, 543 Main Street) where the community could provide input.  We agreed that Mr. Kramer would "set the stage" with his own Powerpoint presentation to inform the community of his ideas and plans.  (Note: A similar approach was taken with Hunter College and Public Safety in prior town hall meetings.)
- There was a lively discussion on the removal of the windows in the arcades in Eastwood and Westview.  I made the point that the arcade, and the weather protection afforded by the windows (rain, snow, wind), is REALLY important to Northtown residents.  I think Mr. Kramer now understands this.  Regardless, Mr. Kramer will have to get permission from the building owners to do some of his refurbishment work.  I pointed out the residents have a close relationship with the owners of each building (Westview, Island House, Eastwood have tenants associations; Rivercross is a co-op), so Mr. Kramer will need their support if he wants to make changes.

- Mr. Kramer envisions the merchants all paying "market rates".

- Mr. Katz noted that the mom-and-pop operations have been more connected with the community, while the chain stores don't really participate.  Mr. Hamburger disagreed with this perception.  Mr. Kramer said he's OK with mom-and-pop operations as long as Roosevelt Island is their third or fourth store, not their first store.

I've asked for the raw data from the survey so we can do other analyses.

In a follow up E-mail with Mr. Kramer, I pointed out that Northtown and Southtown are different marketplaces with different clientele: China 1 has a $4 meal for kids, and Trellis has a $6 kids meal with drink and dessert, meanwhile a kids meal at the Riverwalk Bar and Grill is about $12 (with drink/dessert), and Fuji East is about $20-25 per person.  A good number of people I know (including from Southtown) don't/little patronize Southtown restaurants because of the higher prices.  Alphonse, Sal, and Jonathan are nice guys and I wish them well, I'm just pointing out that there are different markets and different price points.  In other words, we still need that $4-6 kids meal (or maybe we still need two nail salons).

Mr. Kramer responded with "As far as I'm concerned, there's a wide range of incomes throughout the entire neighborhood, and the retail mix should reflect that", and I think that is a fine response.  Mr. Kramer feels that higher rents would be offset by higher volume, which he hopes will come through his refurbishment of the Northtown retail area.  As a followup, I posed the following:

To Mr. Kramer: Just out of curiosity, would you agree that the steady state of businesses is reaching the right equilibrium of growing while maximizing profit?  Or said differently, if there is no growth potential, then all that is left is maximizing profitability ... money spent on anything else (e.g., fancy store windows) that doesn't add to growth or profitability is wasted money, right?  So when Jennifer Connelly's "Dark Water" was shot on Roosevelt Island [circa 2005] and they dressed us up as a "dump", some of that dumpiness is still present: the cleaners didn't change their store front from the dumpy one the movie crew painted on.  The cleaners made their fee from the movie, yet even a dumpy painting didn't diminish their business ... certainly the movie crew would have restored/refurbished it.  <-- supports my equilibrium comments, right?  My hunch is that there aren't many retail dollars to spend.  I would be happy to be proven wrong.  Good luck to you!

I haven't yet received a response from Mr. Kramer.  My sense is: the higher volume necessary to support the higher rents isn't there in Northtown.  Or said differently, if Mr. Kramer moved Riverwalk Bar and Grill to Northtown and spent as much money as Mr. Kramer wants to make its outside look fancy, do you think Riverwalk Bar and Grill would be doing the same level of business?  I don't think so because their present location is a positive factor in their business: Southtown residents can just as easily hop on the subway/tram to Manhattan or Queens.  Years ago, Manhattan Park residents grumbled that going to Northtown (Trellis, Pizza, Back Page Sports Bar) was just far away enough to discourage their patronage, yet when they moved into Northtown their patronage increased.

Anyway, the community should voice its opinion.  And the WIRE buildings' tenants associations will need to get active on negotiating the kinds of changes Mr. Kramer is proposing.

Below is video from September 19 RIRA Island Services Committee discussion with Mr. Hamburger, Katz and Farance reporting on the Main Street retail meeting with Mr. Kramer.

You Tube Video of RIRA's ISC Main Street Retail Discussion

I have been told that Hudson/Related is seeking $50 per square foot for new Roosevelt Island Northtown Main Street leases. I asked Mr. Kramer earlier today to confirm that but have not received a reply yet. Gristedes is currently paying $7 a sq. ft for more than 25,000 sq. ft. of space with a lease through 2032

I asked Mr. Kramer for permission to attend the meeting with the RIRA members so that I could report on it to the Roosevelt Island community. Mr. Kramer declined, stating that he wanted an open discussion and did not want those attending concerned that their comments would be made public. I then asked the RIRA members I knew would be attending if they objected to my presence at the meeting. Neither Mr. Hamburger or Mr. Farance had any objection but Mr. Katz did object to my presence because he did not want anything to "impede the free flow of ideas". So I was not allowed to attend.

I asked Mr. Katz:

By excluding the press from a meeting composed only of the RIRA President, and two RIRA committee chairs with Hudson for the reason that it may "impede the free flow of ideas" can only increase the public perception that something is being kept secret.

Is there anything you might say at this meeting that you are not willing to say in public? i doubt that and I doubt that applies to Frank or Aaron either.

Mr. Katz later wrote to me:

The discussion was frank and informative. I really think that it would have been less so had the press been present. Nevertheless, we discussed dates for a community Town Meeting in October, and I’m working to finalize a date. I’ll let you know just as soon as that’s accomplished.