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Gristedes Lost to High-Rise Developer in Bid for UES Building, CEO Says

By Shaye Weaver | August 19, 2015 4:28pm
 If Extell's purchase goes through, Gristedes would likely move out.
If Extell's purchase goes through, Gristedes would likely move out.
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DNAinfo/Shaye Weaver

YORKVILLE — Gristedes tried to take on a luxury high-rise developer, and lost.

Once the grocery chain's CEO, John Catsimatidis, caught wind that the building that houses one of its stores at 350 E. 86th St. near First Avenue was going up for sale, he planned to join the bidding war, he said.

Catsimatidis said he was ready to offer $80 million, but he couldn't match Extell Development Company's winning bid of $100 million.

"We were asked to bid on it but Gary is more courageous than I am on pricing," said Catsimatidis, referring to Extell's president Gary Barnett. "Congratulations to Gary for the winning bid."

Once the purchase is finalized, Extell may combine it with adjacent properties the developer already owns, according to a report by Crain's New York, which first reported the deal.

The developer's plan for the site is still unknown. Extell did not respond to request for comment.

If the deal goes through, Gristedes will close shop before its lease expires in early 2016, Catsimatidis said, who added it wouldn't be worth staying to the end since the store is in need of renovation work anyway.

"If there is no future in it and it needs remodeling, we'll probably close it early," he said. "It will close sooner rather than later."

Roughly 75 employees currently work at the grocery store, and many will lose their jobs if the store closes, Catsimatidis said.

When asked if he knew of Barnett's plan for the site, Catsimatidis said it's likely he'll knock down the one-story grocery store and build tall again.

"He wants to build the tallest building he can build on 86th street," he said. "That’s Gary's modus operandi. It's going to happen more and more in the city."

Current zoning on the property allows Extell to build a tower up to 210 feet tall, according to Joe Marvilli, a spokesman for the Department of City Planning.

Over the past year and a half, Extell purchased four low-rise apartment buildings along First Avenue halfway down the same block, from the corner of East 86th Street toward East 85th Street, according to a Crain's New York report.

The company also bought a property on East 85th Street that would allow entrances on both sides of the block, the report said.

Real estate broker Richard Baxter of Jones Lan LaSalle facilitated the newest deal between Extell and the owners of the property, a group of families, according to Crain's. He did not return a request for comment.

Extell has many other projects in the works and has built several new structures, including the 90-story One57 luxury high-rise, and plans on building Brooklyn's tallest tower.