Failure of Germantown Grocery Raises Questions of Pay-to-Play

By Aaron Kase
Add Comment Add Comment | Comments: 17 | Posted Jul. 13, 2011

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Fresh Gross-er: Germantown residents say the supermarket smelled and had a rodent problem.

Photo by Ada Kulesza

An uproar about the failure of a grocery store in Germantown is raising some eyebrows over whether it was yet another casualty of pay-to-play—when political donations reap lucrative state contracts—which has permeated Philly and Pennsylvania politics for as long as anyone can remember. 


The debacle began in 2006, when Fresh Grocer President and CEO Pat Burns secured about $800,000 in state-sponsored Fresh Food Financing Initiative (FFFI) grants and loans to put a Fresh Grocer in an old ShopRite building at Chelten and Pulaski avenues in Germantown. The supermarket didn’t take. Residents complained about poor management, spoiled food, excessive rodent activity and a foul odor in the new store. Many questioned exactly what Burns did with the grant money.


Then, without warning, the store abruptly shuttered for good this February. Replacing it is the discount chain Save-A-Lot plus a dollar store, slated for a revamped “Chelten 
Plaza.” Despite its location in a largely middle-class neighborhood, the project has received $3 million in state redevelopment assistance funds—money that typically goes to low-income, underserved areas. “Why would he [Burns] get $3 million in state funding to build a dollar store there?” wonders lawyer Irv Ackelsburg, who is working with the Germantown Community Connection group to oppose the project. “The Germantown business district has a special business provision designed to protect the historic character of Germantown. It’s our position that [the dollar store is] a prohibited 
use under zoning code.”


The group also takes issue with the fact that there’s an existing Save-A-Lot and dollar store mere blocks away. “There’s demand for someone else,” says longtime resident Tim Donovan. “People just want a decent grocery.” 


State Rep. Rosita Youngblood is furious about the new development in her district. “We were under the assumption that we would have a full-service supermarket in the district,” the lawmaker says, claiming the decision to change course came without her knowledge or consultation. “Any money that was to go in was to rehab the supermarket itself and to expand. However, that has not happened. He [Burns] did nothing.”


Burns says there’s nothing that could have been done, claiming to have lost more than $2 million on the Fresh Grocer because of the store’s “cumbersome and costly” maintenance requirements. “In order to operate a successful supermarket establishment under the Fresh Grocer banner,” he writes in an email, “we would need a brand new store in a completely rehabbed lot ... Market studies were conducted and results showed us that a new Fresh Grocer would be unsuccessful financially, but a multi-use development would fare well, and a Save-A-Lot supermarket in particular would be successful in the new development.”


“The $3 million in state funding will go toward this project to redevelop the current site at Chelten and Pulaski Avenues in Philadelphia,” he writes without further specification.


A clearer set of answers may lie in the paper trail. Documents show that Burns appears to own or control more than 20 food, development and management companies that operate in and around Philadelphia, according to the addresses with which those businesses are registered, and executive staff members with known ties to Burns.


And a PW analysis of campaign contributions, state contracts and other documents reveals that employees and others with close financial relationships with those companies have contributed $119,000 to state Rep. Dwight Evans’ campaign since 2006. During Evans’ 20-year tenure on the House Appropriations Committee (he was voted out by his colleagues last winter), all state contracts went through him—and Burns’ companies have received a cumulative $33 million in state contracts in the last five years alone. 


But Burns renounces any implications that contributions could be tied to contract awards. “I am proud to contribute to politicians who dedicate their lives to making our communities a better place to live, and will continue to do so in the future,” he writes.


Don Hinkle-Brown, president of Community Investment and Capital Markets of the Reinvestment Fund (TRF), which controlled and monitored FFFI funds for about 90 stores throughout the state, also refutes claims of suspect behavior. “Dwight did not have anything to do with selecting grocers,” Hinkle-Brown says. “The loan and investment committee is not part of political process.” TRF itself received $14 million in state money since 2006, on top of the $30 million in FFFI dollars it handled. Executives and others closely associated with TRF donated more than $60,000 to Evans during that time, but Hinkle-Brown strongly denies a link. “Dwight got donations from just about everyone in Pennsylvania,” he says. 


Evans, who declined to comment for this story, has in fact received a number of donations. But they appear to come with strings. Which is not necessarily illegal, according to advocacy groups for good government, who say there aren’t laws in Pennsylvania prohibiting pay-to-play unless it devolves into outright bribery. “These people are not stupid enough to say ‘Hey, give me a campaign contribution and I’ll give you a government contract,’” says Tim Potts, co-founder and president of Democracy Rising Pennsylvania. “But that is conspicuously what is going on.” Where the law would be broken is cases where the grant money is not used for its intended purpose. 


“We have suspected for many years and tried to track down direct correlations between who gets grant money and campaign contributions,” says Barry Kauffman, executive director of Common Cause Pennsylvania, another advocacy group. “It’s a difficult process to draw more than a dotted line between campaign contributions and the 
ultimate benefit that contributor got for himself or a friend or an affiliated organization.”


Still, when grocery stores fail in areas that sorely need them, you got to wonder what really happened.

Other donations and subsequent contracts since 2006:

Foundations: The firm has donated $57,660 to Evans since 2006, and received $12 million in state money during that time. In March, Foundations was in competition with another firm, Mosaica, to run MLK High in West Oak Lane. Even though the School Reform Commission picked Mosaica over Foundations, Mosaica dropped out after a closed-door meeting with Evans and SRC Robert Archie—who supposedly had recused himself from the decision because his Duane Morris law firm does business with Foundations. (Foundations later backed out of the deal, citing "unrelenting hostility").

Duane Morris: About $104,000 in donations; more than a half-million dollars in contracts.

Aramark food services: $51,000 in donations; more than $45 million in contracts.

Brown's Superstores (ShopRite): $58,700 in donations; $9 million plus in contracts.

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COMMENTS

Comments 1 - 17 of 17
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1. aumu said... on Jul 13, 2011 at 10:31AM

“this city is run by a bunch of monkeys !!!!!”

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2. Dennis C. McGrath said... on Jul 13, 2011 at 10:39AM

“Whether Burns is getting away with pay-to-play murder now I couldn't say, but the loss of the Germantown Fresh Grocer was no great loss. I live less than a mile from it; after several visits, I went there only for ice, and usually regretted even that. Dirty, understaffed, and rude. The nearby Pathmark isn't much (if any) better. I go all the way to Andorra or White Marsh for a decent supermarket (Germantown Acme is fine, but I can get to Andorra quicker) and I await the opening of the ShopRite at TastyKake's old property with rapt anticipation.”

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3. Andrew said... on Jul 13, 2011 at 10:41AM

“Not sure what's underserved about the community, there's a Pathmark right across the street from the old Green Grocer, a produce shop and a butcher down the street. There's definitely no need for another Dollar Store, but how about go find a different neighborhood that really does need a supermarket?”

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4. Anonymous said... on Jul 13, 2011 at 10:43AM

“It does appear to be a lot of misdealings going on, but these areas will never see growth until the people in these areas like Germantown learn to change and start taking care of their own community.”

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5. Anonymous said... on Jul 13, 2011 at 10:43AM

“It does appear to be a lot of misdealings going on, but these areas will never see growth until the people in these areas like Germantown learn to change and start taking care of their own community.”

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6. Anonymous said... on Jul 13, 2011 at 01:18PM

“Dwight Evans did a lot to collude with the failure to adhere to environmental procedure and building codes at a favored project by East Mt Airy Neighbors,Council Woman Miller, 9th Ward Democratic Committee and the real estate leaders connected with the Mt Airy Rentals address in Germantown. Lots of crimes committed toward neighbor. Put her in hospital several times. Ruthless and illegal games played with innocent lives. Near death for neighbor. Early death. Criminal acts.”

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7. Enough is Enough! said... on Jul 13, 2011 at 01:28PM

“Well....the time for rolling over and playing dead is no more here in Germantown...we are protesting this and actively speaking out (and filing appeals in court) to rid this neighborhood of yet another worthless dollar store and low quality food store!...I'm tired of traveling to other stores outside of my "hood" (Whole Foods, TJ, Acme) for fresh meats and produce...millions of dollars flee Gtown due to this very issue. We are slated for many changes towards a transit oriented plan (Wayne Junction been green-lighted 30 mil and Queen Lane projects are slated for demo this yr among other improvements)
We are a small group who are gaining momentum daily...folks are paying attention (NewsWorks,CityPaper so far). Check us out germantowncares.org for updates.”

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8. Enough is Enough! said... on Jul 13, 2011 at 01:31PM

“Well....the time for rolling over and playing dead is no more here in Germantown...we are protesting this and actively speaking out (and filing appeals in court) to rid this neighborhood of yet another worthless dollar store and low quality food store!...I'm tired of traveling to other stores outside of my "hood" (Whole Foods, TJ, Acme) for fresh meats and produce...millions of dollars flee Gtown due to this very issue. We are slated for many changes towards a transit oriented plan (Wayne Junction been green-lighted 30 mil and Queen Lane projects are slated for demo this yr among other improvements)
We are a small group who are gaining momentum daily...folks are paying attention (NewsWorks,CityPaper so far). Check us out germantowncares dot org for updates.”

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9. Jeffrey A. Smith said... on Jul 13, 2011 at 01:37PM

“I am a life long native of Germantown and I can tell you that there are plenty of people who care about this community. The Shoprite that was here closed, I believe, because of an owner decision, not store failure. The building definitely needed to be replaced for a large format Fresh Grocer, and Burns is building a new grocery store as it is now. None of us who have been ardently opposing the project want to accept a "deep-discount" grocery store, but we may have to. store for the corporation, Supervalu, which owns the business. Burns has received a franchise to operate his own stores under the Save-a-Lot name. The corporate store on Wayne Ave will close in December as things stand now. Two apartment developers are committing about $33 million in private, not state funds to two complexes in the area. A legal appeal has been filed against the use permit for the Dollar Tree without the participation of Germantown Community Connection, and we d”

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10. Anon said... on Jul 13, 2011 at 01:47PM

“The GCC don't speak for me...as it appears they are playing ball with Burns regardless what the community really needs...come see for yourself...we are out there protesting M.W.F 4-6pm corner of Chelten & Pulaski...getting signatures on petitions and postcards...”

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11. concerned community member who wont be ignored said... on Jul 13, 2011 at 01:54PM

“re Anonymous at 10:43AM: We in Germantown ARE trying hard to take care of our own community to promote economic growth. Please visit germantowncares.org to learn more about this. We are facing a very hard-headed developer who is bent on installing low-end stores, regardless of the strongest urging of the community. We are out protesting on the corner of the development every MWF from 4-6pm! Support our cause and tell public and private bed-buddies that their backdoor deals won't be tolerated in Germantown anymore, or anywhere else!”

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12. Brian "Good to be Green" Rudnick said... on Jul 13, 2011 at 01:56PM

“I support Germantown Community Connection, West Central Germantown Neighbors and the people behind germantowncares.org in bringing to light facts which may be obscured and moving toward a resolution which is a win-win for the community.

I do not know what that is but Germantowners do and their voices need to be made heard. There are so many vacant stores along Germantown Avenue in Chestnut Hill where I live that I for one,might welcome a dollar store in Chestnut Hill which Bowman Properties once had big signs soliciting (were it not for the fact that dollar store goods are likely manufactured under oppressive conditions in China)

Brian "Good to be Green" Rudnick, Green Party, Write In Candidate for 8th District Philadelphia City council, November 8, 2011 http://4council.brianrudnick.com”

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13. cjones said... on Jul 13, 2011 at 02:03PM

“Irv Ackelsberg of GCC was asked to join the appeal of the zoning Permit Burns filed for a "retail Grocery store" which is his sneaky attempt to get around from the zoning laws. I heard that Pat Burns is a racist and liar. I know people who worked with him on Prospect Plaza who stated such. He should just sell Chelten Plaza to a developer who actual has ideas for development and cares for the needs of the community. The RACP grant application clearly states that the applicant needs community support which BURNS DID NOT GET! I'm not even a Germantown resident but have been following this story very closely my since my sister lives there.”

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14. Loyalist said... on Jul 14, 2011 at 08:59AM

“It's pretty sickening. Eventually, I hope, people will do what's necessary to bring an end to all the corruption, but I'm not hopeful. Corruption is rampant. Look at what's going on with the "debt reduction" in D.C. Greed is not good even if Gecko says it is. We are becoming a third world country.

How come you're not listed anywhere on the staff?”

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15. Anonymous said... on Jul 15, 2011 at 12:09PM

“Brian Rudnick you will get my vote, we need to get rid off all of our elected officials in philly, dwight evans must go hes been in office way to long, get rid of him, donna reed miller needs to go, everyone of them needs to go , we must vote them all out of office, we are a dying city, state and country, because we let these aholes, stay in office to long, we have had senators sit in office for forty years, they are the ones that distroyed the country, if we dont get rid of all of them soon, our kids will become the new age slaves,”

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16. aumu said... on Jul 15, 2011 at 06:31PM

“put em out!!!”

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17. Anonymous said... on Jul 18, 2011 at 03:33PM

“Throw the bums out..and let's get us a new set of bums!!! SMH...It never ends. I'm gone fishin!”

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