PFMA and its members are opposed to Philadelphia Councilwoman Cindy Bass’s bill (Bill No. 16070) limiting the use of restrictive covenants for grocery stores with more than 15,000 square feet of space, located in a food dessert.
The bill targets stores that put covenants in place to prevent another purchaser from using the property as a supermarket. It would refuse a commercial license for any grocery store that had a restrictive covenant in place.
PFMA President and CEO David McCorkle sent council a letter expressing members’ concern that it would stifle small business development and fears that it could create food desserts. He testified before the city’s Committee on Rules on November 30 in Philadelphia.
McCorkle noted that as it is currently written, the bill could be construed to prohibit restrictive covenants that apply when a food store is still operating in the vicinity, not just when the space previously occupied by a store is vacant. Food store lessees often restrict landlords from leasing property to a competitor within a certain distance from their site or within the same shopping center. This protects the supermarket and helps it survive, especially in its early years. McCorkle says a covenant prohibition will jeopardize the store’s future in that neighborhood and disenfranchise store owners from making the initial investment into developed properties out of concern that a competitor with deeper pockets will move in and drive out any surrounding businesses.
An unintentional consequence of the bill is that larger format stores could drive out smaller creating food desserts in some areas of the city, which this bill is attempting to address. PFMA’s Philadelphia members have committed to addressing the food dessert problem and through city government and private foundations have made great strides in reducing the number of food desserts in the city.
PFMA continues to meet with council members and the Mayor’s administration to express our opposition to the bill. We encourage members to contact council members and the Mayor’s office to oppose the bill.
The bill targets stores that put covenants in place to prevent another purchaser from using the property as a supermarket. It would refuse a commercial license for any grocery store that had a restrictive covenant in place.
PFMA President and CEO David McCorkle sent council a letter expressing members’ concern that it would stifle small business development and fears that it could create food desserts. He testified before the city’s Committee on Rules on November 30 in Philadelphia.
McCorkle noted that as it is currently written, the bill could be construed to prohibit restrictive covenants that apply when a food store is still operating in the vicinity, not just when the space previously occupied by a store is vacant. Food store lessees often restrict landlords from leasing property to a competitor within a certain distance from their site or within the same shopping center. This protects the supermarket and helps it survive, especially in its early years. McCorkle says a covenant prohibition will jeopardize the store’s future in that neighborhood and disenfranchise store owners from making the initial investment into developed properties out of concern that a competitor with deeper pockets will move in and drive out any surrounding businesses.
An unintentional consequence of the bill is that larger format stores could drive out smaller creating food desserts in some areas of the city, which this bill is attempting to address. PFMA’s Philadelphia members have committed to addressing the food dessert problem and through city government and private foundations have made great strides in reducing the number of food desserts in the city.
PFMA continues to meet with council members and the Mayor’s administration to express our opposition to the bill. We encourage members to contact council members and the Mayor’s office to oppose the bill.
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