Rite Aid coming to 125th St

Real Estate Weekly, March 17, 1999

A new 10,000 square-foot Rite Aid Drug Store is coming to 125th Street between Fifth and Lenox avenues. The gleaming new store should be opening in late January.

With the exception of the Pathmark Drug Store under construction, there were formerly no large national retailers east of Lenox Avenue.

Rite Aid's search for large new store on 125th Street started about two years ago. Their consulting broker, Andover Realty, sent a form letter to the owners of buildings in the area. About five years before, Irgang Equities had p chased a strip of five contiguous buildings on 125 Street between Fifth and Lenox. Each building had one 20-foot-wide by 60-foot-deep store. Irgang proposed to Rite Aid a plan to demolish the walls between all five store buildings and create a new steel skeleton inside the building, all without evacuating the upper floor lofts. The building, which was built in the late 1800's, would literally receive a new lease on life. A new 100-foot-wide by 35-foot extension would need to be built in the rear yard to deepen the building to 100 feet from its current 60 feet.

After nearly a year of negotiations, first with Rite Aid's now ousted New York acquisition director, then their architects and engineers, and then, finally, their staff attorney, a lease was signed at the end of August 1997.

The next job was to work with the tenants, many who had been in the building since the 1960's, toward planning the moving process. The first job was to buy out the lease of a small deli/grocery. The owner, an immigrant from the Middle East, was anxious to leave the long hours of his grocery business to devote more time to his small but growing construction company. The other tenants had no leases, but needed to plan alternatives to doing business at this location.

The first to go was the "Seaman's Net" fish restaurant, which was already planning to relocate to a building that the operator owned on Fifth Avenue between 124th and 125th streets near Central Park. Seaman's Net also decided that the restaurant would open with more of an orientation towards the growing African and West Indian population in Harlem. The next to go was "Manhattan Paint and Hardware." Irgang had spoken to the owner of the building about 50 feet east of the present location, and he accommodated the owner of the paint store by leasing her a store in his building. She also received three months free for moving expenses and inconvenience. Next was a bar, which was owned by a gentlemen in his late 80's. He was still very active, but decided that it was financially better just to retire in exchange for free rent. The last to go was a medical center, which had known all along what was going on, and decided to buy the building right next to where the Rite Aid was going. Talk about synergy!

Of course, not all went perfectly smoothly. The medical center eviction ended up being debated on national television on People's Court in front of former Mayor Koch. Many of the other tenants left owing rent and discarded debris. As is typical, the project went a bit over budget. But, in the end, everyone, especially the residents of the area, will be better off.

Irgang's next project is an assemblage of store buildings in the Williamsbridge area at White Plains Road and Gun Hill Road in the Northeast Bronx. Over the last 17 years, Irgang has been assembling what is now a group of stores 500 feet wide and three city blocks long. Irgang also acquired vacant land at a City auction and converted it into a parking lot. They acquired the last building in the assemblage puzzle in September 1998. Irgang already has a supermarket signed for the site, and is now negotiating with a chain of large laundry superstores to build a new store in the area, complete with child care and television screens. They're also talking to a large, national pizza chain.

"It is our belief that providing suburban-like shopping amenities to New York will help keep people in New York and help change the perception that New York is not middle-class family friendly," said Mark Irgang, president of the firm. 'Now that the streets are safer, better shopping for formerly neglected residents of this city should be a priority. Unlike other quality of life improvements, the money for this comes from the private sector, not at the expense of the public. The City Council needs to be reminded that retail jobs are in high demand for the least fortunate in our workforce."

Also, Irgang said, the tax revenues from more city retail sales are surely as needed by the City as its surrounding suburbs, to which much of the retail dollars are siphoned off. "Whatever happened to the Mayor's plans to change zoning to permit better stores into New York?" Irgang asked.