Syracuse, N.Y. -- The Tops supermarket that is slated to close in Syracuse’s Valley Plaza benefited from nearly $850,000 in state and local government incentives when it opened in 2012.
Empire State Development, the state's economic development office, gave Tops a $275,000 grant to open the store in a low-income South Side neighborhood that community leaders said was lacking full-service grocery stores.
At the same time, the Syracuse Industrial Development Agency approved $572,378 in property tax, sales tax and mortgage recording tax exemptions that the Tops store indirectly benefited from.
A Tops official said the benefits came with no obligation to keep the store open.
The tax exemptions flowed to the plaza's owner, 2468 Group Inc., an affiliate of Buffalo developer Carl Paladino's Ellicott Development Co., to offset increases in the plaza's tax bill that would have resulted from the Tops store, which became the plaza's anchor, and renovations to other parts of the shopping center. Ellicott Development officials said the deal was necessary to bring Tops to the plaza.
At the time, city officials and community organizers described the neighborhood around the store as a "food desert" because of a lack of full-service grocery stores within walking distance. Valley Plaza is in a low-income neighborhood at 4141 S. Salina St.
P&C operated a supermarket in the plaza until 2009. When it closed, community leaders said neighborhood residents who did not have cars had no full-service grocery stores to shop at.
Tops filled that need when it opened its 36,000-square-foot store in October 2012 in the space formerly occupied by P&C. The store employs 57 people.
But on Thursday, Williamsville-based Tops Markets announced that the store is among 10 "underperforming" supermarkets around New York that it will close by the end of November as part of its financial restructuring. Tops filed for reorganization under Chapter 11 of U.S. Bankruptcy Code on Feb. 21, reporting more than $720 million in debt.
Shoppers browse the produce section of the Tops supermarket in Valley Plaza in Syracuse. (Rick Moriarty | rmoriarty@syracuse.com)
State and city officials said Thursday they were checking the grant and tax agreements to determine what, if any, obligations Tops had regarding the operation of the store.
Kathy Romanowski-Sautter, a spokesperson for the supermarket chain, said the grant did not contain any requirement that the company keep the store open for a specified period. And she said Tops had no obligations related to the tax exemptions because they were part of an agreement between the industrial development agency and the plaza's owner.
When it announced plans to open a store in Valley Plaza, Tops said it intended to invest $1.1 million to renovate the former P&C store and $1.8 million to equip its store. In addition, it said it anticipated receiving a grant from the state Healthy Food Healthy Communities Fund, according to a city document. However, the grant was not initially approved, putting the project in jeopardy, according to the document.
The company then asked the industrial development agency to provide a grant for the store. The agency in turn approached Empire State Development and requested that $275,000 from the unused portion of a $2 million Upstate City-by-City grant from the state be reallocated to Tops. Empire State Development agreed to the reallocation.
According to a description of the project on file with Empire State Development, Tops was to be paid the $275,000 after showing proof that it had spent $1.5 million on "build-out expenses, furniture and fixtures, and machinery and equipment" for the store. The document says nothing about requiring the store to remain open for any period.
It's not certain the neighborhood could still be considered a food desert, if it ever actually was. Price Rite, a supermarket chain known for its low prices, opened a store on South Avenue 2.5 miles to the north in April 2017 -- with the help of $2.4 million in government grants and tax exemptions.
Rich Puchalski, executive director of Syracuse United Neighbors, said he has seen very few customers in the Tops store when he has visited it. He said he suspects competition from the new Price Rite, as well as the Green Hills Farms store two miles down the road and Price Chopper and Wegmans stores elsewhere in the city doomed the Tops.
"It's a beautiful store," he said "The cleanliness, the appearance, they've got a beautiful store. It's too bad. I just think people have other options."
Syracuse Mayor Ben Walsh said city officials reached out to Tops prior to the company's announcement Thursday in hopes of keeping the store open.
"Although Tops made the decision to close one location inside city limits ... the city and the landlord at that location are in discussions regarding attracting another use at that site," he said in a statement. "While we regret losing any quality food suppliers, the city is pleased its proactive work with Tops helped to prevent the inclusion of any other locations inside the city on the store closure list."
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