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Proposed Tax Cut Will 'Save' Manhattan's Affordable Supermarkets, Pols Say

By Maya Rajamani | February 14, 2017 5:37pm
 Hundreds of protesters stood in the rain last year to rally in support of an Associated Supermarket in Washington Heights.
Hundreds of protesters stood in the rain last year to rally in support of an Associated Supermarket in Washington Heights.
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Ian Hardy

CHELSEA — A pair of politicians have proposed a tax cut for Manhattan grocery stores following a recent spate of closures across the borough.

At a City Council meeting Wednesday, Manhattan Borough President Gale Brewer and Councilman Corey Johnson said they plan to introduce a bill that would exempt “affordable” supermarkets from the city’s commercial rent tax.

The tax is currently imposed on businesses between Murray Street and 96th Street in Manhattan that pay $250,000 or more in rent per year, Brewer said.

Businesses that have annual rents of $300,000 or more end up paying a tax that's equivalent to about 3.9 percent of their rent, while stores with a $250,000- to $300,000-per-year rent pay a lower rate, she noted.

“We’ve seen too many neighborhood supermarkets threatened with closure in the last few years, and we’ve been to too many rallies to try to keep them open,” Brewer said in a statement.

The tax “puts an unfair, regressive burden on businesses in some of the city’s most expensive neighborhoods, where there is immense upward pressure on commercial storefront rents,” she added.

Only grocery stores with more than 3,500 square feet of retail space, ones that accept SNAP benefits, and ones that meet affordability requirements determined by city health and finance officials based on the food they sell would qualify for the exemption, a draft of the bill shows.

The bill would also require that at least 500 square feet of the retail space be devoted to selling fresh produce, and it would exempt grocery stores where pharmacy sales make up more than half of the store's sales.

Manhattan's commercial rent tax zone included 132 supermarkets as of last summer — all of which could potentially qualify for the exemption if they meet the bill's requirements, according to a survey conducted by Brewer's office.

In June, officials announced that an Associated Supermarket in Washington Heights would stay open following a months-long fight to save it from eviction.

Other stores — including a City Fresh Supermarket in Harlem, a D’Agostino in Murray Hill, a Met Foods in Little Italy and an Associated Supermarket in Chelsea — haven’t been so lucky.

Met Foods was paying more than $40,000 per year in commercial rent tax before it closed at the end of last year, owner Paul Fernandez said in a statement included in Brewer's release, adding the exemption could have saved his store, which was paying $90,000 per month in rent.

“The proposal… would give our neighborhood supermarkets a fighting chance for survival," Johnson said in a statement.

“As the cost of living continues to rise, the stores help ensure that our city can continue to accommodate the seniors and working class families that built our city into what it is today.”