Abyssinian pays city $11M over Pathmark sale

The East Harlem site sold to Extell in 2014 for $39M

Nov.November 04, 2016 03:40 PM

The church-based Abyssinian Development Corporation paid the city $11 million in September, after a legal battle over the 2014 sale of the Pathmark site in East Harlem.

The Abyssinian organization, led by Reverend Calvin Butts, sold the 63,363-square-foot site at the corner of 125th Street and Lexington, to Extell Development for $39 million, in 2014.

But the property didn’t belong to Abyssinian alone. In 1995, the city-owned site at 140 East 124th Street was divided between the city’s Economic Development Corporation and Butt’s organization. The city took 49 percent, and Abyssinian partnered with a local nonprofit to take the remaining 51 percent.

In 2014, Abyssinian unilaterally sold the Pathmark building to Extell and argued in a lawsuit that it did not have to share its profit from the sale with the city because of an ownership clause in their original contract.

The case was thrown out in 2014 and Abyssinian lost on appeal in March. In September, the organization agreed to pay the city its share of the proceeds from the Extell TRData LogoTINY sale, which amounts to $11 million after fees and outstanding debts on the property, Crain’s reported.

Extell recently began the demolition of the Pathmark, and it’s unclear what will take its place. East Harlem is in the process of possibly being rezoned for more density, and land-use experts say that Extell may be able to build up to 613,605 square feet.

Ironically, the EDC partnership with Butt’s organization, back in 1995, was devised in order to bring the Pathmark grocery to East Harlem. When the site was sold, the community felt betrayed. [Crain’s]Chava Gourarie 

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