Thursday, November 18, 2010

☞ REVIVE: Citarella's Eviction Still Pending

When Citarella received an eviction notice from the city over a year ago, many thought that the specialty market would be gone by now. Crain's has now reported that Citarella had won an appeal and thus the delay but the city might win a court case today that will return the property back for further development: LINK.

It all started back in 1999 when Citarella bought their 125th Street location and six other parcels behind it on the 126th Street side for only $850K.  The deal was that the retail space AND manufacturing outlet would all happen by 2006 but Citarella only managed to open the store.  This 126th Street section of Manhattanville (just east of Amsterdam and outside of Columbia's campus development) was zoned for industrial use and the local government wanted to revive the old Taystee Bakery (center building at lower photo) and the buildings around it for the gourmet grocer's manufacturing operations. Citarella's owners changed their plan and wanted the area to be rezoned for residential use i.e. condo development but this was denied since this was not part of the original deal.  Interestingly enough, now that the properties will most likely be returned, the local government is now shopping around for developers to revive the 134,000 square foot site but will no longer stipulate the end use.  The article also states that rezoning of the area for residential use is currently under review.


  1. Factories are more useful than retail. At this point factories are more useful than residential units.

  2. Too true, Vic. Best case scenario, though, would be Citarella gets its manufacturing side going like it promised it would. But it looks too late for that. Super annoying.

  3. Does anyone else feel that Citarella tried to pull a "fast-one!?"

    And I agree that the area should be kept for factory use! My mom worked at Tastey Bread back in the late 50's I think and I remember when that whole area was nothing but factories and such. We don't make anything much in the USA anymore, particularly in NYC-we used too. And this is part of our economic downfall. It would be great to bring the factories back and start making goods that we can be proud of.

    Alas, I don't have the confidence that that will happen. I do see more over-priced, glass & steel box condos and over-priced coops in the future of that area.

  4. Greg, I hear what you're saying as far as where we've ended up in economic terms -- but to try to force industrial development in this manner really puts the proverbial (and pre-industrial) cart before the horse.

    The reason we no longer have industrial facilities all over the place is that there is no longer any way for such operations to be competitive in the global economy. Given the very high relative cost of labor (and of just about everything else) in New York City -- even compared to the rest of the U.S., much less emerging markets overseas -- it's not exactly surprising that potential business investors are not clamoring for a chance to move into a space like this in Manhattan. The problem is not a lack of industrially zoned real estate, but rather it is just about everything else involved.

    While a bakery would at least obtain a significant amount of value through proximity to its end market, the economically rational choice would still be to put the facility in New Jersey, Long Island, etc., and convert the Manhattan building into condos. We're talking about the most densely populated city in the country. No alternative land use (other than prime commercial real estate in the central business district) even comes close in terms of potential valuation.

    The city has a fiduciary obligation to maximize the value they obtain on behalf of the taxpayers, rather than to be sentimental and unrealistic about likely outcomes of this kind of project. Should a bakery be given tax-exempt status as well? Or subsidized directly? To do so would be a recipe for inefficiency and waste in which everyone loses.

    So I am glad to see that the City has played hardball with Citarella as needed, AND has subsequently allowed reason to rule over emotion in the land use decision.