Philly developer Blumenfeld sued by broker over never-opened South Street grocery store lease

A business owned by Philadelphia developer Eric Blumenfeld is accused in a lawsuit of not paying the broker who helped him lease space on the ground floor of his Abbotts Square condo-and-retail building on South Street for a grocery store that never opened.

Commercial services firm CBRE Group alleges breach of contract and unjust enrichment by Stobba Associates L.P., a Blumenfeld-controlled company that owns Abbotts Square’s commercial spaces, in its suit filed late last month in U.S. District Court.

It claims to have been paid only $50,000 of the $313,598 it was owed for negotiating a lease with Fresh Formats LLC, a division of Dutch supermarket giant Ahold Delhaize, for the 16,800-square-foot space at the corner of South and Second Streets on the developer’s behalf.

“Stobba has been receiving monthly rental payments — for almost a full year — from the tenant under the lease,” CBRE said in its complaint. “Stobba has refused to pay to CBRE the full amount of the commissions owed to CBRE.”

Blumenfeld has also clashed with some owners of building’s 171 condo units over issues including the conversion of a deck of parking into apartments, plans for a “room-escape” entertainment venue on above-ground floors, and disruptions from renovations to the first-story retail spaces.

CBRE’s suit concerns a long-vacant retail space where Ahold, whose other brands include Giant and Food Lion, was said to be planning a smaller-format, urban-focused store under the Bfresh moniker that it had used for shops in New England.

Fresh Formats signed a lease for the property in April 2016, agreeing to pay $597,361 a year for the first five years of the lease and $657,032 a year for the second five years, and took possession of the space in January 2017, according to the lawsuit.

Ahold never opened the Abbotts Square store or others in Philadelphia it was said to be planning. Ahold spokesman Christopher Brand said in November that it was reevaluating its plans for those sites.

Christopher R. Cordaro, vice president of Blumenfeld’s EB Realty Management Corp., said Wednesday that the company did not pay CBRE its commission because it was unclear whether Ahold would proceed with its plan for a store at the site.

Blumenfeld was abroad and not available for an interview but said in an email that the Dutch supermarket conglomerate has said it still plans some kind of grocery store in the space.

He also shared a Dec. 27 message he sent to the CBRE broker on the deal, Larry Steinberg, in which he expressed a desire to put the dispute behind them and resume working together on retail tenants for the building.

Ahold spokesman Brand did not respond to a phone message asking about the company’s plans.

Steinberg declined to comment, citing the open legal case. CBRE spokesman Bailey Hall did not respond to a phone message.

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