GROUND IS BROKEN FOR PATHMARK IN EAST HARLEM

GREG GATTUSO

NEW YORK -- Pathmark's planned $15 million store here will not only double East Harlem's food retailing square footage -- it will create jobs, lower food prices and improve the neighborhood's economic health, said local leaders gathered here for a groundbreaking ceremony.

The event, held last week at the corner of 125th Street and Lexington Avenue, capped off a series of complex financial transactions and attracted business and community leaders, government officials and an army of reporters and photographers.

As reported, the store, slated to open in 12 to 15 months, will measure 50,000 square feet, and offer 24-hour shopping and a variety of state-of-the art departments, including a pharmacy, fish market and deli. The store will also house a Chase bank branch -- that company's first supermarket branch in New York City. A rooftop garage will hold 125 cars. The project, said to be the first new commercial real estate venture in Harlem in two decades, will measure a total of 64,000 square feet. In addition to the 50,000-square-foot Pathmark, there will be other retail tenants, officials said, but they were not announced. The developer of the project is East Harlem Abyssinian Triangle, a limited partnership managed by two community-based nonprofit organizations: the Community Association of the East Harlem Triangle and the Abyssinian Development Corp. Pathmark, Woodbridge, N.J., will pay about $1 million a year to lease the site for 25 years from EHAT, which purchased the site from the City of New York.

The City's Economic Development Corp. is providing EHAT with a purchase money mortgage for property acquisition. Currently, the site is a parking lot.

Any profit from the lease will be used to fund EHAT programs, including housing, economic development and social services, said Darren Walker, an EHAT spokesman.

Harvey Gutman, senior vice president of store development, told about 500 local officials and community residents at the ceremony that the store will be Pathmark's largest supermarket in New York City, offering 30,000 items "geared toward the diverse tastes of this vast community we serve."

In addition, the store will have a fresh seafood department that will steam and filet fish at no extra charge. The store will have 16 checkout lanes and be staffed with "pleasant, friendly Pathmark associates," he added.

The store will create about 250 construction jobs and 200 permanent store positions, officials said. At least 75% of the 200 permanent positions at the new store will be filled by community residents, Gutman told SN. Hiring will take place immediately, with new associates placed in other Pathmark stores throughout the city until the East Harlem unit opens.

"And then we'll transfer them back home," Gutman said.

Another half-dozen Pathmarks are in various stages of development in other underserved parts of New York City, including Springfield Gardens, Queens, and Crotona Park in the Bronx. Gutman said a Newark, N.J., store opened in 1990 is part of a larger economic revival in that urban marketplace.

"This project has been in the works for nine years," Gutman said. "This project is right from a business point of view and from a community point of view."

New York City Mayor Rudolph Giuliani said Harlem is presently home to just 68,000 square feet of food retailing space, and blamed that lack of space for high food prices. The new Pathmark, which will bring local food retail space up to 118,000 square feet, will help to lower prices, he said.

"The price for food in Harlem will be reduced," Giuliani said. Giuliani cited a 1996 study by the city that found the cost of groceries for a Thanksgiving dinner to be 20% to 35% higher in New York City than in Nassau County, Long Island.

New York Governor George Pataki praised the cooperation among a variety of public- and private-sector entities that led up to the groundbreaking. The $15 million financing package was led by Chase Manhattan Bank, with European American Bank, Federal Home Loan Bank of New York and Carver Federal Savings Bank combining to provide $9.3 million in loans to EHAT.

In addition, three other entities have contributed to the funding: Empire State Development Corp., a New York state agency charged with encouraging economic growth, committed a $1.5 million loan. The Local Initiatives Support Corp., the nation's largest community development intermediary, is providing a $2 million loan. The Retail Initiative, a commercial real estate investment fund based here, has committed up to $2.5 million in equity from a consortium of major corporations.

"There hasn't been a project like this in Harlem in 30 years that has brought together this level of cooperation from the public and private sectors," Pataki said.

The nonprofit developers have also raised $1.1 million in equity capital through grants from the U.S. Department of Health and Human Services/Office of Community Services and the Empire State Development Corp.

"This Pathmark will give consumers access to a large, modern supermarket with all the amenities that suburban shoppers take for granted," said Peter L. Borges, president of The Retail Initiative, New York. TRI is also developing commercial projects in Chicago, Philadelphia, Los Angeles and New Haven, Conn.

The project has been a source of controversy since it made its way through the regulatory approval process more than two years ago. Small-business operators had complained they would not be able to compete with a supermarket. Pathmark officials said the new store would spur the local economy and generate traffic for its neighbors.