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.