Northeast Times

Shopping wars

The site of con­flict: Shown here is the de­moli­tion site at Bridge and Ta­cony streets, which is one of two loc­a­tions de­velopers want to build a Shop­Rite in the Lower North­east. MARIA POUCH­NIKOVA / TIMES PHOTO

Two de­velopers want to have Shop­Rite su­per­mar­kets in re­tail cen­ters they’re de­vel­op­ing in the Lower North­east, and one of the two wants a Shop­Rite so badly he’s su­ing.

In a law­suit filed in mid-Oc­to­ber, Ar­sen­al As­so­ci­ates, which is set to build a re­gion­al shop­ping mall on the old Frank­ford Ar­sen­al prop­erty, ac­cused Am­mons Su­per­mar­ket LLC, a Shop­Rite su­per­mar­ket op­er­at­or, of ne­go­ti­at­ing for more than three years in bad faith to be an an­chor store at the as-yet-un­built cen­ter.

Ac­cord­ing to the suit, Ar­sen­al As­so­ci­ates agreed to all Am­mons de­mands, but Am­mons’ true in­ten­tion was “pre­vent­ing any com­pet­it­ive su­per­mar­ket from leas­ing space in the Ar­sen­al Shop­ping Cen­ter.” The suit con­tin­ued that Am­mons ne­go­ti­ated a lease at a nearby, also un­built, de­vel­op­ment, and that if Am­mons signs a lease with the oth­er de­vel­op­ment, it would elim­in­ate the pos­sib­il­ity the Ar­sen­al could at­tract its own mar­ket, and, there­fore, lose ten­ants.

The suit ac­cuses Am­mons, which owns a Shop­Rite on Ara­mingo Av­en­ue, of double deal­ing that “smacks of bad faith and un­fair com­pet­i­tion and ef­fect­ively has hal­ted de­vel­op­ment of the Ar­sen­al Shop­ping Cen­ter.”

The oth­er de­vel­op­ment men­tioned, but not named, in the suit is the Shoppes at Wissi­nom­ing at Har­bison Av­en­ue and Tulip Street, not even a half-mile away from the Ar­sen­al site at Bridge and Ta­cony. Carl Freed­man, a Cherry Hill de­veloper, and his part­ners want to tear down an old SKF ware­house at the site and build a shop­ping cen­ter that will in­clude a su­per­mar­ket and sev­er­al oth­er re­tail stores.

At the Nov. 14 meet­ing of the Frank­ford Neigh­bor­hood Ad­vis­ory Com­mit­tee, Freed­man said he has a let­ter of in­tent from Am­mons that a Shop­Rite will be his main, or an­chor, store.

De­veloper Mark Hankin, Ar­sen­al’s pres­id­ent, said a let­ter of in­tent is worth­less, and he asked the NAC to with­draw its sup­port for Freed­man’s pro­ject. Mem­bers told him that wasn’t go­ing to hap­pen.

The NAC’s sup­port had come in April dur­ing a joint meet­ing with the Wissi­nom­ing Civic As­so­ci­ation, Freed­man said in a Nov. 15 phone in­ter­view.

On Nov. 14, Hankin told NAC mem­bers that the cur­rent nature of the gro­cery busi­ness is that no mod­ern su­per­mar­ket com­pany will open a store if there is an­oth­er nearby, and that two Shop­Rites cer­tainly would not be loc­ated near each oth­er. If Freed­man gets a Shop­Rite or any oth­er mar­ket, no oth­er gro­cery chain would put a mar­ket in the Ar­sen­al, Hankin said.

And hav­ing no mar­ket, said Hankin’s at­tor­ney, Dav­id Braver­man, would jeop­ard­ize his cli­ent’s pro­ject on a prop­erty he’s owned for three dec­ades.

NAC mem­ber Chris Gulledge said he doubted a pro­ject of the scope Hankin de­scribed would be scrubbed just be­cause of one su­per­mar­ket lease.

In the suit, Ar­sen­al As­so­ci­ates stated that it has agree­ments with oth­er ten­ants to loc­ate in the Ar­sen­al that are con­tin­gent on Shop­Rite also be­ing in the cen­ter, that the cen­ter’s fin­an­cing is de­pend­ent on a Shop­Rite lease, and that the Am­mons fam­ily that owns Am­mons Su­per­mar­ket LLC, was aware of those facts.

Ar­sen­al As­so­ci­ates wants com­pens­at­ory and pun­it­ive dam­ages from Am­mons Su­per­mar­kets and mem­bers of the Am­mons fam­ily as well as “such oth­er leg­al and equit­able re­lief as the court may deem just and prop­er.”

THE AR­SEN­AL’S AMMO

Not only is Hankin su­ing Am­mons to keep it from ink­ing a deal with Freed­man, his Ar­sen­al As­so­ci­ates com­mis­sioned a traffic en­gin­eer­ing study of Freed­man’s pro­ject that por­trays the design of the Shoppes at Wissi­nom­ing as un­safe and that a cen­ter built to the design will cause traffic prob­lems and noise.

Broker John Swan­son, of Com­mer­cial Real Es­tate As­so­ci­ates on the 5300 block of Ta­cony Street, said he asked Ar­sen­al As­so­ci­ates to com­mis­sion the traffic en­gin­eer­ing study of the Shoppes at Wissi­nom­ing.

“I was con­cerned the site was too small,” he told NAC mem­bers. “I was con­cerned about the traffic at the site.”

The study was presen­ted to the NAC mem­bers on Nov. 14 and to mem­bers of the Frank­ford Civic As­so­ci­ation on Nov. 7. Hankin, who also spoke about his own cen­ter at both com­munity meet­ings, wants the NAC to change its stance from sup­port of Freed­man’s pro­ject to op­pos­i­tion. 

Freed­man agreed with Hankin that a let­ter of in­tent doesn’t have the leg­al weight that a lease does, but ad­ded, “I have more than he has.”

Freed­man said he has de­veloped lots of prop­er­ties, but the Shoppes at Wissi­nom­ing is his first in the city. 

He star­ted work­ing on erect­ing a re­tail cen­ter at Har­bison and Tulip in 2012. His plan is to use the SKF ware­house build­ing and an ad­ja­cent smal­ler prop­erty. He cur­rently owns neither, but has agree­ments to buy them con­tin­gent on get­ting all per­mits needed. The in­dus­tri­al zon­ing was changed by or­din­ance to per­mit com­mer­cial de­vel­op­ment, he said.

Freed­man said he doesn’t see why both cen­ters can’t have mar­kets, and ad­ded there are dif­fer­ent kinds of mar­kets. A Shop­Rite might be suit­able for his neigh­bor­hood shop­ping cen­ter, and a lar­ger store might be good for Hankin’s pro­ject, he said.

On Nov. 14, he answered, point for point, the traffic study Ar­sen­al As­so­ci­ates paid for. What he said boils down to: The traffic study is wrong and, there is noth­ing un­safe or noisy about how his shop­ping cen­ter will op­er­ate.

The prop­erty is “an eye­sore now,” Freed­man told NAC mem­bers. “It’s best to tear it down. … We will be adding trees and bushes and all sorts of screen­ings so neigh­bors are pro­tec­ted from light and noise.”

He said he isn’t sure how all of this su­per­mar­ket wrangling will play out.

“I’m hop­ing cool­er heads pre­vail, the leg­al is­sues will go away and we can com­mence con­struc­tion,” Freed­man said.

He said he saw a need for a shop­ping cen­ter in the com­munity.

“I hope it spurs ad­di­tion­al de­vel­op­ment in the neigh­bor­hood,” he said. “A pro­ject like this … things grow out of it.” 

Hankin said his pro­ject will have a much more pos­it­ive ef­fect.

“Whatever the eco­nom­ic im­pact of the pro­posed ap­prox­im­ately 111,000 square foot Shoppes at Wissi­nom­ing might be, they pale in com­par­is­on to the num­ber of loc­al uni­on con­struc­tion jobs, loc­al per­man­ent jobs, city tax rev­en­ue, state tax rev­en­ue and fed­er­al tax rev­en­ue to be cre­ated by the Shop­ping Cen­ter at the Ar­sen­al, which would be at least four times that cre­ated by this oth­er pro­posed cen­ter,” Hankin stated in a Nov. 17 email to the North­east Times.

What does Shop­Rite have to say about all this? Not much.

“We have no an­nounce­ments at this time on any sites in Phil­adelphia,” stated Santina Stankevich, spokes­wo­man for Shop­Rite’s par­ent com­pany, Wake­fern Food Corp.

Larry Am­mons of Am­mons Su­per­mar­ket LLC did not have a com­ment, an aide said Tues­day.

And, al­though Hankin’s com­pany has sued Am­mons and he won’t com­ment on that suit, “we are con­tinu­ing dis­cus­sions with Wake­fern and the Am­mons fam­ily in hopes of resolv­ing the situ­ation,” Hankin stated in his email. ••

The Shop­ping Cen­ter at the Ar­sen­al

Loc­a­tion: East of In­ter­state 95, Bridge and Ta­cony streets

Pro­pos­al: Large re­gion­al shop­ping cen­ter on the site of the north­ern half of the old Frank­ford Ar­sen­al. More than 20 large stores and many smal­ler re­tail­ers and res­taur­ants as well as a theat­er are in Ar­sen­al As­so­ci­ates’ plan for a four-stage de­vel­op­ment of the more than 460,000-square-foot cen­ter ex­pec­ted to open in 2015. The shop­ping cen­ter, al­though near Ta­cony, Frank­ford, Wissi­nom­ing and Brides­burg, es­sen­tially is cut off from all of those neigh­bor­hoods by I-95. The de­veloper ex­pects more than 400 con­struc­tion jobs to be cre­ated as well as about 1,000 per­man­ent jobs. 

His­tory: De­veloper Mark Hankin said he bought the Ar­sen­al in 1983 and has been try­ing to de­vel­op it ever since. The Ar­sen­al Busi­ness Cen­ter, the old fa­cil­ity’s south­ern half, with its his­tor­ic build­ings, is be­ing pre­served and has two charter schools among its ten­ants. Profits from the north­ern half are to be pushed in­to pre­serving the south­ern half. Hankin ori­gin­ally wanted to de­vel­op the Ar­sen­al for in­dustry, but that plan altered as the city’s busi­ness cli­mate moved away from in­dustry.

The Shoppes at Wissi­nom­ing

Loc­a­tion: Har­bison Av­en­ue at Tulip Street, a former SKF site.

Pro­pos­al: A neigh­bor­hood shop­ping cen­ter that will in­clude a su­per­mar­ket and sev­er­al smal­ler re­tail­ers. De­veloper Carl Freed­man sees his cen­ter, about a quarter of the Ar­sen­al de­vel­op­ment’s size, as a neigh­bor­hood shop­ping cen­ter, not a re­gion­al one. He said it will provide hun­dreds of con­struc­tion jobs as well as hun­dreds of per­man­ent jobs.

His­tory: Most of the site is now oc­cu­pied by a ware­house.

Hear­ing: Freed­man will present his plans for six struc­tures for 5597-99 Tulip St. for Civic Design Re­view at 1 p.m. on Tues­day, Nov. 26, in Room 18-029 of the One Park­way Build­ing, 1515 Arch St.

You can reach at jloftus@bsmphilly.com.

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