Fairway landlord: Private-equity owners ruined Red Hook store

Greg T. O’Connell vows to replace supermarket “immediately” if it closes

TRD NEW YORK /
Jan.January 29, 2020 08:00 AM
Fairway at 480-500 Van Brunt Street in Red Hook and the O’Connell Organization's Greg O’Connell (Credit: Google Maps)

Fairway at 480-500 Van Brunt Street in Red Hook and the O’Connell Organization’s Greg O’Connell (Credit: Google Maps)

The landlord of the Fairway Market in Red Hook vowed to “immediately” look to replace the supermarket with another grocery store if the bankrupt company shuts it down as expected in the next few months.

Gregory T. O’Connell, managing partner of the O’Connell Organization, said he and his family initially hoped that Fairway would provide Red Hook with jobs and affordable food. For years, it did exactly that, but then new ownership took over the supermarket chain.

“The Fairway of today is not the Fairway that we loved and believed in when fighting to bring them to the neighborhood,” said O’Connell, whose father, also named Greg, is the developer most associated with Red Hook’s renaissance. “This is mostly due to its new ownership, which has successfully diluted the strengths of the operation from bottom to top without regard for what the Glickbergs built and the reputation Fairway Market gained over decades.”

The Glickberg family sold Fairway to a private equity firm in 2007. The chain filed for Chapter 11 bankruptcy in 2016 and again last week, and speculation emerged almost immediately that its Red Hook location would be a likely casualty. The store has been struggling with declining sales and an expensive lease of about $1.5 million per year, and it is difficult to get to via public transportation. And in 2013, a Whole Foods Market opened in Gowanus, capturing many Fairway customers.

O’Connell said he was unsure whether the supermarket would close, but if it does, he will not waste time looking for another one for the space, at 480-500 Van Brunt Street.

“If Fairway Market, its current owners, and prospective purchasers deem this location unsuitable, we will immediately seek a grocery operation to take the space,” he said in an email. “Red Hook deserves an affordable market that contributes to its vibrant, supportive, diverse community.”

The O’Connell Organization has been a leading force in the development of Red Hook, with Bloomberg estimating that the portfolio amassed by patriarch Gregory O’Connell is worth at least $400 million.

The company’s Fairway project has a complicated history. When it was still under development in 2002, ex-councilman Angel Rodriguez was charged with demanding a $1.5 million discount on a real estate deal and $50,000 in exchange for delivering the vote that the project needed to proceed. The elder O’Connell, a former narcotics detective, was wearing a wire during their conversations.

Rodriguez was sentenced to more than four years in prison in June 2003, and the supermarket opened to much fanfare in 2006.

“Fairway became, in many ways, an anchor for consumer traffic and neighboring businesses in Red Hook,” the younger O’Connell said. “[Prior] to its opening, it was less likely for retail small businesses to justify occupancy in what still is a very seasonal submarket.”

The store faced another major obstacle in 2012, when Superstorm Sandy flooded it with almost five feet of water. Fairway required a massive cleanup and new equipment and was closed for about four months.

“The possibility of it not reopening after such a traumatic event definitely left residents skeptical on the area’s future vulnerability,” O’Connell said.

The market reopened in March 2013, but nine months later the Whole Foods opened on Third Street between Second and Third avenues. Many consumers switched loyalties — a microcosm of what happened across the city as the likes of Whole Foods and Trader Joe’s eroded Fairway’s popularity.

Representatives for Fairway did not respond to requests for comment.

Mike Racioppo, district manager of Brooklyn Community Board 6, said the Red Hook Fairway had helped spur a neighborhood revival that was already underway, describing it as “an oasis in a food desert and an anchor after Hurricane Sandy.”

Racioppo expressed optimism that the property can continue to be that.

“Given its large parking lot — especially with the Fifth Avenue Key Food soon closing for development — and its history of profitability and magnificent views, we remain hopeful that a buyer will emerge,” he said.

Write to Eddie Small at [email protected]


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