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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