An interview with developer Pat Burns about Chelten Plaza

The same day a small group of Germantown residents came to a community meeting ready to fight the Chelten Plaza development at Chelten and Pulaski avenues, the project’s developer, Pat Burns, sipped a hot drink in a Mt. Airy coffee shop.

“I’ve been very truthful with you,” he said as this smaller meeting came to a close. “I only ask that you be truthful.”

Burns doesn’t smile an awful lot, but when he does the face looking at you is like a cherub with very little atop the head. He speaks like an old friend.

“We want to listen to the neighbors, we want to help the development [of the community]. We have kind of an obligation,” he said.

Across the table from him with a matching drink, sat Carly Spross, spokeswoman for Fresh Grocer – young and pretty in long blond hair.

Together, these two have been cast as the villains of a Germantown supermarket melodrama that has gripped the neighborhood for the last two months. At issue is a $11 million gamble for Burns; and for many local residents who want a more upscale project there, the future of West Chelten Avenue.

Their supposedly villainous plan: To renovate the site of the former Fresh Grocer into a new strip mall anchored by the discount supermarket, Save-A-Lot, a Dollar Tree and a home decor chain called Anna’s Linens.

This meeting in Mt. Airy was Burns’ attempt to set the records straight, re-cast his perceived role and open himself to community input.

On the record

Well beyond 100 local residents showed up to a lively meeting in Germantown in March, largely to protest Burns’ plan for Chelten Plaza. Efforts to stop or sway the work have been continuing ever since.

A small delegation headed by Germantown Community Connections president Betty Turner has had a sit-down meeting with Burns to present alternative designs for the site, and the Greater Germantown Business Association has mounted a petition drive to stop the development.

The topic has lit up on-line neighborhood discussion forums for months now, and Eighth District City Council candidates have begun to weigh in on the subject with Robin Tasco’s recent statement condemning the development and Cindy Bass’ claim to have returned an unsolicited donation from Burns to her campaign.

The message from many community members has been relatively clear: No to the discount market; no to the dollar store; no to the site design; and no to the closed-door meetings that brought the partially tax-payer subsidized development here.

Up to now the messages from Burns have been sparse if at all.

Reluctant developer

Burns says he was truly surprised by the “uproar at Chelten Avenue” over the new plans for the site. “I was kind of taken aback by that.”  He thought, with the site looking the way it has for the last several years (he’s owned it since 2006) residents would be happy for a fresh development.

Not that he blames people for their passion, “I applaud them for that,” he said. It’s just that he thinks if residents take a closer look at what’s really going on they might change their minds.

“The last thing I want to do is build a shopping center that people don’t want to be a part of it there,” Burns said, his back against the coffee shop wall.

Burns’ business is a tough one – a one to two percent profit margin, he says. And because his niche is finding low-income, usually urban communities to locate stores in, it’s tougher still. Some of the challenges – high city taxes, dealing with the unions and sometimes also the neighborhoods.

“A lot of times when you build a store the neighborhood is not always ready 100 percent to support it,” Burns said.

All of this means more risk, which in turn means a greater need to make a solid business choice for each development.

Burns has done this kind of thing before in the city:

40th and Market streets where a Fresh Grocer occupies the ground floor of a parking garage near the UPenn campus.
58th and Baltimore, where a Great Value supermarket, an auto zone and beer distributor anchor a small strip mall
56th and Chestnut, where a newer Fresh Grocer and a Fresh Grocer Fuel Center (a gas station) sit
Chew and Wister in East Germantown, where a Fresh Grocer built in 2009 anchors a small strip mall marketed strongly to nearby La Salle University.

(Burns has also done some similar projects in the suburbs. Watch for the NewsWorks story on the Upper Darby Save-A-Lot coming soon.)

In only two of the bulleted cases did Burns get public underwriting for the projects, according to him. In each case he also appears to be the landlord. That public funding was $1.5 million at 56th and Chestnut, and for the Shoppes at La Salle, $4 million in grants and a subsidized $4.5 million loan.

Despite any subsidy, each project means millions in risk, according to Burns.

Burns said he is a reluctant developer, “At the end of the day I’d rather still run a Fresh Grocer.”  But the need to make things happen fast has lead him to real estate ownership roles in each of the stores above.

Previously published reports also indicate that the 2009 Fresh Grocer development at Progress Plaza, 1501 North Broad Street near Temple University, received a $5 million state grant to open in that historically African American-owned shopping center.

The Fresh Grocer Web site shows seven stores for the company, it was not clear from Burns what his land ownership interests were in each case.

Moving quickly to make these projects happen also brought strong relationships with local and state legislators who often support his work, he said. At the La Salle store, for example, state Reps. Dwight Evans and John Myers, senators Leanna Washington and Shirley Kitchen and City Councilwomen Donna Reed Miller and Marian Tasco all claimed supportive roles.

Chelten Plaza

At Chelten Plaza some of these details look a little different.

Long time residents will remember a down trodden Shop Rite at the site, which closed it’s doors over five years ago. Burns bought the property from that owner and received $800,000 in public loans and grants to open his Fresh Grocer there, which quickly became equally down trodden, even he admitted.

Earlier plans included a more ambitious renovation. The reluctant developer envisioned a large multi-story building there with residential and office space above his Fresh Grocer market, he said, to take advantage of the Chelten Avenue train station next door. That would have been before the site was zoned to allow such things.

The Fresh Grocer that opened there was slated for more RCAP funding but the project was delayed, according to an earlier email from Don Hinkle Brown of the Reinvestment Fund.

The delay was linked to poor sales at the site. Spross said in an earlier interview the Fresh Grocer operating there lost $750,000 in one year.

Because of experiences like that Burns now believes a Fresh Grocer – a higher end, larger market cannot survive at Chelten and Pulaski.

Also different is local support. Despite having met with Donna Reed Miller last summer the Councilwoman has been nearly silent publicly on the Chelten Plaza project. Even though Rep. Dwight Evan’s office was chiefly responsible for setting up the current $3 million in RCAP grants he and his staff have not stepped out to champion the proposal, as they did at Chew Avenue. And Rep. Rosita Youngblood, who’s district includes the site, has pledged to stop it.

Push back

The push-back against Burns’ plans up to now has been focussed on three main objections: Choice of stores, site design and lack of community involvement.

Burns is attempting to address the third issue though a dialog with Germantown Community Connection, which opened up as a result of outreach by GCC. As part of this he will attend a public meeting about Chelten Plaza April 28.

But cherub smile and friendly tone or no, Burns’s flexibility on the stores in this development is limited to the four or five smaller storefronts at the plaza. The anchor tenants – Save-A-Lot, which will occupy the new building on the rear of the lot near Pulaski, and Dollar Tree are not moving, according to him.

The reason is simple economics. He’s convinced those are the stores that will make the project work, and without them as signed leaseholders he won’t get the loans to do the project, he says.

As for the standing ban of “variety stores” on Chelten Avenue, which community members have cited as a zoning-based prohibition to Burns’ plans, Burns thinks the Dollar Tree will pass the ordinance. It caries a large variety of foods and is approved to accept food stamps, so he sees it as really more of a food store.

And to the people who think the development should be aiming higher, he spoke of a misperception. The Dollar Tree, he said, isn’t really a dollar store at all. It’s much higher brow.

“After all, they are a Fortune 500 company,” he said.

The Dollar Tree’s mission statement from its Web site seems to contradict some of what Burns claims.

“Dollar Tree, Inc. is a customer-oriented, value-driven variety store operating at a one dollar price point,” the statement reads.

Nevertheless, Burns wants residents to remember it could be worse. At the nearby Bakers Square in Hunting Park West, the plan is to put in a Dollar General with the Thriftway supermarket, which Burns thinks is no where near the quality of a Dollar Tree.

Dollar General (195) was ranked higher on the 2010 Fortune 500 list than Dollar Tree (397), according to CNN Money.com.

Still Burns says the store is a good one. “They sell products that people want. I honestly to the bottom of my heart believe when that store is open people are gonna love it.”

Loving it

Trader Joes was a store many have said they want to see on the site. Some local residents see it as a store that would encourage higher-end development in West Germantown than the discount market Save-A-Lot.

Burns says he talked to Trader Joes and they’re not interested. “Why wouldn’t I want Trader Joe’s there? They do a great job.”

Trader Joes would neither confirm nor deny that conversation with Burns.

Burns agrees something like a Trader Joe’s – a small specialty market – would compliment the everyday values offered at Save-A-Lot. Weavers Way, he suggested, could be one possibility to occupy one of the smaller storefronts.

Weavers Way General Manager Glenn Bergman indicated the two companies had not discussed the possibility.

But Save-A-Lot will be on that parcel, as will the Dollar Tree, Burns is not budging on that. Besides the “credit tenant” anchor status a store like the Save-A-Lot can provide him, Burns has extra confidence in this Save-A-Lot because this store will be special.

It will not be like the current Save-A-Lot on Wayne Avenue in Germantown, which Burns described as, “a toilet.”

That is a corporate-owned store through the ACME supermarket umbrella. The new Save-A-Lot will be a franchise, owned and operated by the son of Burns’ now deceased original partner in the Fresh Grocer.

And Burns suggested it would be a better match for the community than the Fresh Grocer that Burns ran on the site because the sales at the existing Save-A-Lot are strong.

Shawn Rinnier (Burns’ partner’s son) has already taken over that store on Wayne Avenue and he will move the operation to Chelten Plaza, completely new, and totally redesigned.

Burns emphasized the new store will have a produce section and a fresh meats section and Rinnier will run it with a lot of “new local feel to it.”

Part of the reason Rinnier is already at the Wayne Avenue Save-A-Lot is to soak up that local feel, so he will know what to add to the new store to make shoppers comfortable. Adding Tastykakes to the store products was the example Burns gave for local feel.

“I think that local flavor and and spirit will make it a great store,” Burns said.

Part of another local feel for this plan, right now at least, is still anger at what some Germantowners see as a loss of opportunity by keeping the anchor stores focussed on discount marketing.

To these sentiments Burns issues a reminder, there are still the four smaller storefronts to fill at Chelten Plaza, and on those he’s very open minded.

Don’t focus on one or two stores, he says, “I’m developing a whole shopping center.”

 

Germantown Community Connection will hold a community meeting with Chelten Plaza developer and Fresh Grocer owner Pat Burns Thursday April 28 from 7 to 8:30 p.m. at First Presbyterian Church in Germantown, 35 West Chelten Avenue.

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