Penn, Fresh Grocer are taking each other to court over U. City supermarket site

The University of Pennsylvania and Fresh Grocer have taken each other to court over the university’s efforts to evict the supermarket from a school-owned retail space it has occupied since 2001.

Fresh Grocer failed to renew its lease in time for the 34,500-square-foot space at 40th and Walnut Streets and so was asked to vacate the property when the agreement expired March 31, Penn spokeswoman Jennifer Rizzi said in an email.

The supermarket, a member of the Keasbey, N.J.-based Wakefern Food Corp. cooperative, failed to do so even after the university selected Acme Markets Inc. as its replacement at the site, Rizzi said.

Acme plans to renovate the space to include indoor and outdoor seating, a sushi and noodle bar, a Starbucks cafe, and a beer and wine shop, it said this week in a release. It was unknown when the new store would open because of uncertainties surrounding the legal matter, Rizzi said.

“Penn will continue ongoing legal proceedings to enforce the lease and enable the new operator, Acme, to begin renovations to the market space,” she said.

Acme spokeswoman Danielle D’Elia did not immediately respond to a call seeking comment.

The dispute has been simmering since December, when the university said Fresh Grocer would be replaced after failing to renew its lease months after a contractual deadline.

Fresh Grocer filed a lawsuit against Penn over the loss of its lease, prompting a countersuit by the university.

In an email this week, Wakefern spokeswoman Maureen Gillespie disagreed with Penn’s position that the lease was not renewed on time.

"It is the Fresh Grocer’s intention to remain at the Walnut Street location," Gillespie said. "It will continue to avail itself of all options to make that happen."

Paul Steinke, who directed the University City District business organization when Fresh Grocer first leased the space, said the dispute reflects the increasing commercial activity along the 40th Street retail corridor.

When Penn was seeking a supermarket for the corner, Fresh Grocer owner Pat Burns was the only operator willing to take a chance on the still-struggling area, said Steinke, who now directs the Philadelphia Preservation Alliance.

“He was willing to take a flier on the space,” Steinke said. “Now the affluence of the neighborhood has improved enough so that other operators want in.”

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