Irv Ackelsberg on GCC’s meeting with developer Pat Burns

MEMORANDUM

Date: March 2, 2011

To: GCC and interested Germantown residents

From: Irv Ackelsberg

Re: Report on fact-finding meeting with developer of Chelten-Pulaski strip mall

________________________________

In attendance

For Germantown: Betty Turner, GCC President

Irv Ackelsberg, Counsel for GCC

Paula Paul, resident of 5200 block Pulaski

For Developer:  Patrick J. Burns, Owner of Fresh Grocer; Partner in Pulaski Real Estate Partners, owner of the land

Grant McLoughlin, Burns’ Executive V.P.

Gabriel Clark, Project Manager with Remington Group, hired by Burns

The Facts, as stated by the Developer

The meeting took place [March 1] in the corporate office of Fresh Grocer in Drexel Hill.  The other names on the door are all the other Patrick Burns ventures, including Springfield and Paxon Country Clubs and Metro Philly Management. (Note: there are a lot of brand names on the wall underneath Metro Philly Management, one of which is Sav-A-Lot.  Also on the wall, lots of laudatory news stories about Fresh Grocer, bringing healthy food to the inner city, etc.) In the conference room were three rendered drawings on easels for Chelten Plaza, a strip mall with three stores with entrances on Chelten; a Dollar Tree strore in what is now the back of the closed supermarket, and a stand-alone Sav-A-Lot supermarket backing on Rittenhouse Street.  The sign, hanging over the strip:  Dollar Tree and Sav-A-Lot.

The story, as related by Burns, is as follows:  He bought the old Shop-Rite site around 2004-05 for the purpose of building a 50,000 sq. ft., state-of-the-art Fresh Grocer. The original purchase was through Pulaski Partners, which he described as his real estate venture. Thus, the line we got last from Carly Spross, of Metro Philly, that Fresh Grocer had sold the land to Pulaski Partners and had no idea what the new owner was doing, was not truthful.  Pulaski Partners is Burns’ real estate arm and it owned the land under the store from Day One.  It later acquired the two adjoining lots, purchasing the old beverage company from its owner, and purchasing the abandoned gas station from Ken Weinstein (not sure when).

Despite the original plans, says Burns, his team concluded that the Fresh Grocer project would not work financially at that location.  Part of it was projecting the amount of dollars that shoppers would be willing to spend there.  If this is true, they clearly had different numbers guys working for them than the ones telling Jeff Brown that the wasteland at the Budd site could support a large high-quality store. 

Another theory we discussed in the car driving back:  It probably was evaluated not so much on its own, but in combination with the also-planned LaSalle store on Chew [now open].  In other words, the conclusion was that Germantown could not support two new Fresh Grocers and the choice went to Chew.  Undoubtedly that was a conclusion supported by State Reps. Evans and Myers.  The reason why state legislative support is so important in the story:   both Chelten-Pulaski and Chew have received millions of dollars of state Redevelopment Assistance Capital Program (“RCAP”) funds. Burns stated that he got a grant of $250,000 for the new Fresh Grocer that never came to be, and has received $3 million (not clear whether it was a grant or loan) for Chelten Plaza.  Rep. Youngblood says she had nothing to do with that grant so it was likely part of the package designed by Rep. Evans.

Here is the Sav-A-Lot part of the story:  Sav-A-Lot is, as I found out last week, the discount, nonunion arm of SuperValu, the parent company of Acme Markets and the wholesaler for both chains.  Most of the Sav-A-Lot stores are owned and operated by SuperValu, including the one behind the Wayne Ave. Dunkin’ Donuts, but SuperValu also franchises the brand to independent operators.  Burns has entered into a partnership with Shawn Rinnier, the son of his deceased ex-partner, to own and operate two independent franchised Sav-A-Lots, including one that just opened in Darby Township. See http://www.prweb.com/releases/2010/12/prweb4878384.htm.  While most of the purchasing will be from SuperValu, Shawn (who will be operating the store) will have some leeway in what he sells.  According to Burns, Shawn is going to be focusing largely on a fresh-cut meats which, supposedly represents 20% of the Darby store. There will be produce, but there are no current plans for any organic products.

According to Burns, Dollar Tree has already signed a lease.  One of the Chelten Ave. stores has been rented to something called Anna’s Linens.  The other spaces are not yet leased.

Their Offer

They are interested in establishing lines of communication with the neighborhood.  They regard the Sav-A-Lot and Dollar Tree as non-negotiable, but seem eager to have community input on: 1) what businesses should be approached for the other leases, 2) what products Sav-A-Lot will sell and 3) the site design, including landscaping and street art.  They suggested, and we agreed, that all communications between the community and the Burns group would go through Betty.

What Now?

Each of the three topics mentioned are obviously important and worthy of discussion, but we first have to decide whether we are willing to accept this strip mall as a “fact on the ground” we cannot change.