Suitors Line Aisles of Food Emporium
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20120917-NEWS--0001-NAT-CCI-CN_-- 9/14/2012 7:55 PM Page 1 FRUIT FLY HE TRAVELED THE GLOBE FOR THE BEST PICKINGS CRAIN’S® PAGE 8 NEW YORK BUSINESS VOL. XXVIII, NO. 38 WWW.CRAINSNEWYORK.COM SEPTEMBER 17-23, 2012 PRICE: $3.00 Suitors line aisles of Food Emporium The sale of A&P’s ‘crown jewel’ may be as much about real estate as arugula BY LISA FICKENSCHER For the second time in two years, the Food Emporium chain of supermar- kets,owned by the Great Atlantic & Pa- cific Tea Co.,is on the block—and there is no shortage of interested buyers. The 17-store chain controls attrac- tive real estate in Manhattan at a time ADVISE AND when many grocers—including Fair- CONTEMPT: David Lichtenstein insists way Market, Balducci’s, Trader Joe’s in a lawsuit he was ill and Whole Foods, served by his lawyers as well as discount SALE! and bankers. clothing retailers and drugstores— are expanding. 16 But there are FOOD EMPORIUMS several suitors who in Manhattan were stand out: Chris- put on the block by tian Haub, former Montvale, N.J.- chairman,chief ex- based A&P ecutive and major shareholder of the Montvale, N.J.- AVERAGE$250K WEEKLY based company revenue per store, known as A&P, according to ‘The mark’ and Gristedes industry experts owner John Catsi- matidis, who said he was close to ac- Three years after his $8B bet on Extended Stay landed the chain quiring Food Emporium in 2010, shortly before its parent filed for bank- in bankruptcy, David Lichtenstein wants his reputation back ruptcy protection and called off the sale. Mr. Catsimatidis has already redux signed a confidentiality agreement with A&P that prevents him from dis- BY AARON ELSTEIN ping malls,not to mention 18,000 apart- about Extended Stay’s bankruptcy. cussing Food Emporium, he said. ments spread across 27 states. But when Critics describe the suit as a desper- Mr. Haub, who runs a Greenwich, In 2007, fast-rising financier David Extended Stay went bust just two years ate Hail Mary heave, and Willkie Farr Conn.-based investment firm, Emil Capital Partners, initiated discussions Lichtenstein snapped up the Extended later, Mr. Lichtenstein not only lost last month moved for a dismissal. But a with A&P executives during Labor Stay Inc. hotel chain for $8 billion, se- $300 million, he also lost his reputation. raft of documents from the suit and oth- Day week, when the company told its curing his status as one of the nation’s Now the Manhattan-based real es- er litigation related to the Extended employees that Food Emporium was largest private landlords. His sprawling tate investor is suing to get it back, Stay fiasco is laying bare the knotty de- for sale. “We are very familiar with those empire encompassed 30 million square blaming his lawyers at Willkie Farr & tails of the deal culture that made the stores and how to make them success- feet worth of office buildings and shop- Gallagher for giving him bad advice See INVESTOR on Page 22 ful,”said Mr.Haub,who stepped down as chairman of A&P in March. Ten- gelmann Group, the German retailing MORE REAL ESTATE Condo prices conglomerate controlled by the Haub family, had been A&P’s largest share- pick up pop: P. 3. Landlords holder since 1979, but it sold its shares ELECTRONIC EDITION this year,Mr.Haub said,after the com- aim small to fill offices: P. 13 pany came out of bankruptcy. See FOOD EMPORIUM on Page 23 NEWSPAPER 20120917-NEWS--0002-NAT-CCI-CN_-- 9/14/2012 7:55 PM Page 1 STATS AND THE CITY THE CONTROVERSIAL SODA BAN became official last week, when the NYC Board of Health prohibited big, sugary drinks at movie theaters, delis, stadiums and restaurants. The rule takes effect in March. FYICRAINSNEWYORK.COM 16 oz. Biggest sugary soda OK’d under new law 54 oz. Regal Cinemas’ largest soda as of mid-September Ben Bernanke 85¢ pumps up housing Rough profit on each dollar of sales at movie concession stands ingo! The head of the nation’s can- do fourth branch of government $200 has decreed that there shall be Fine for violating the soda ban B more jobs and so shall it be—for the 200 foreseeable future. Calories in a 16-oz. Pepsi, 20% less than in 20 oz. Federal Reserve Chairman Ben 12% Bernanke surprised everybody last week NYC high-school students who are obese by announcing he is now determined to boost jobs.To do that, the Fed will pump bloomberg newsbloomberg Sources: City of New York, PepsiCo Inc., Morningstar, Centers for up what is arguably the most productive istockphoto Disease Control and Prevention, Center for Science in the Public Interest jobs engine we’ve got—the housing market, which benefits everybody from movers and carpet- makers to homeowners and, of course, home lenders. BROADWAY FINDS MUCH TO APPLAUD The Fed’s plan to soak up $40 billion worth of mortgages each month will lower mortgage Growth in ticket revenue on Broadway has been strong since April, including a surprise jump in June. rates, help increase the availability of home loans, and likely lift home prices in the bargain. Wealthier, more confident homeowners, in turn, are just the sort of people who are more inclined 17.3% Change, y-o-y to kick up their heels at the local restaurant, jewelry store or maybe the Ford dealership. Does the Fed’s strategy carry risks—especially with regard to its former north star, inflation? 9.3% Yes, absolutely. Can Mr. Bernanke shield America from the fallout of Europe’s economic crisis or 8.1% 7.3% 7.8% even the slowdown in China? Don’t be absurd. But do enjoy the party while it lasts. —erik ipsen 4.5% 4/1/12 5/6/12 6/3/12 7/1/12 8/5/12 9/2/12 TARNISHED SILVER. Under pressure that it doesn’t already own. The deal Source: The Broadway League from Gov.Andrew Cuomo,the state’s will value the legendary retail broker- HOORAY! fledgling Joint Commission on Pub- age at $13.5 billion. That’s hefty, but ADDICTED TO NUMBERS? GET A DAILY DOSE AT @STATSANDTHECITY THE lic Ethics has decided to broaden its it’s a far cry from the $23 billion value TREASURY investigation into the sexual-harass- Citi had put on it. In a hopeful and sold $18 ment scandal involving Brooklyn’s telling sign, the news lifted shares of billion worth of its shares in THIS WEEK IN CRAIN’S Democratic Party boss, Assembly- both companies—Morgan Stanley’s AIG and man Vito Lopez. Also now officially more so. ... BETTER LATE THAN NEVER. actually made IN THE BOROUGHS-------------------------- 3 under scrutiny is powerful Assembly Finally, city and state officials have a profit. Speaker Sheldon Silver, who is facing reached an agreement that will allow istockphoto IN THE MARKETS---------------------------------- 4 mounting fire for having made tax- the Port Authority of New York and THE INSIDER -----------------------------------------------6 payer-funded payments of $103,000 New Jersey to resume long-stalled OY VEY! to two of Mr. Lopez’s accusers. Re- construction on the 9/11 museum. BUSINESS PEOPLE --------------------------- 8 publicans hope to turn the scandal The agreement cut through the knot METROCARD discounts may follow the 9 train into the history books. OPINION --------------------------------------------------------10 into an election issue. ... PUBLIC- that resulted from years of wrangling PRIVATE SCIENCE PROJECT. Memorial among various public entities and the GREG DAVID--------------------------------------------11 Sloan-Kettering private National Sep- SMALL BUSINESS--------------------------12 Cancer Center and tember 11 Memorial the City University of ‘We turn away & Museum founda- REPORT: REAL ESTATE-------------13 New York are joining thousands of tion, and it set a THE LIST ---------------------------------------------------------15 forces on East 73rd framework to speed Street. The duo is people every future agreements. REAL ESTATE DEALS-------------------16 paying $215 million Monday’ The project still needs newsbloomberg FOR THE RECORD---------------------------17 for a city-owned site $300 million, as well NEW YORK, NEW YORK —Thomas Campbell, that once housed a as help with its oper- bell told The New York Times, in ex- Chef Simone Apostoli’s CLASSIFIEDS -----------------------------------------20 director, Metropolitan Sanitation Depart- Museum of Art, on the ating budget, but all plaining why he is proposing a seven- Bowery Kitchen offers SOURCE LUNCH--------------------------------26 ment garage. Sloan- Met’s proposal to open that is for another day schedule. Look out, MoMA and affordable Italian cuisine. It’s NO DAY OFF AT OUT AND ABOUT ------------------------------27 Kettering will build a seven days a week time. ... others: Your Monday crowds may get just one of the newcomers 750,000-square-foot THE MET. Forty years thin. ... WALMART OUT, SHOPRITE IN. P. 25 worth trying out this fall. SNAPS--------------------------------------------------------------27 cancer-care center, while CUNY’s after closing its doors on Mondays to As Walmart shops for its first loca- CORRECTIONS Hunter College plans a 336,000- save cash, the Metropolitan Museum tion in New York City, it can cross square-foot science and health- Charles Bozian will play a key role in Big Brothers Big Sisters of New York City’s strategy of Art is thinking about reversing that Related Cos.’ Gateway II Shopping development and long-term business planning. His role was misstated in the Sept. 10 professions facility.Together they will decision—to boost revenue. The Center in East New York, Brooklyn, “Stretching Funds for a Nonprofit.” ultimately add a very healthy 830 jobs. about-face is courtesy of the city’s new off its list of potential sites.ShopRite Alexa von Tobel is CEO of LearnVest.