Lawsuits over City-Owned Grocery Store Plan

A business group filed a lawsuit in State Supreme Court in Manhattan over Mayor Zohran Mamdani’s proposal to open five city-owned stores would hurt small businesses, saying the city did not properly study how the new stores would affect neighborhood supermarkets and would discriminate against the often-minority owners of said businesses.
Kenneth Rolden, the president of the Mulitcultural Business Coalition that filed the suit, said in the statement that Mamdani’s plan would have a “devastating” affect on competitors. It also said that the proposed sites were chosen arbitrarily.
“It is a direct assault on minority business by a mayor who claims to be a champion of disenfranchised poor and working-class New Yorkers,” Mr. Roldan said.
Mamdani ran on promises of “affordability” and the city plans to open one store in each borough that would charge prices 30% below average on certain items.
At a news conference August 24th, the day the suit was filed, the mayor defended his plan, saying they were needed to address the cost of living, and that the small number was unlikely to affect the competitiveness of the city’s thousand grocery stores.
“I’m confident both in the legality of this, that it will stand up in court and the importance of delivering it,” Mamdani said.
This is the third of Mamdani’s key policies to be challenged in court, after the rent freeze and second home tax. It alleges that the mayor’s plan violates state civil rights protections and the equal protection clause of the State Constitution. The Multicultural Business Coalition filed a second lawsuit that day arguing the city has no authority to open grocery stores.
The city-owned grocery store plan has been widely criticized by the MBC, the National Supermarket Association, and others groups and individuals, with many questioning if the $70 million dollar plan is a worth-while use of municipal money, especially with plans to discount basics like meat and milk. The first store is planned to open in Hunts Point in the Bronx next year and the second in East Harlem by 2029. Sites in Brooklyn, Queens, and Staten Island have not been identified.
A city official said recently that affected stores may be issued grants, but a city spokesman walked back from that in a statement, saying only that some form of assistance would be provided.
“We are looking at the potential for tax abatement, incentives and zoning benefits through existing city programs to ensure that the city is doing everything in our power to alleviate cost pressures for small businesses across the city,” he said.