Giant Sues Local Developer Over Failed Heirloom Market On South Street

Supermarket chain Giant said it tried to open a grocery store at the corner of Second and South streets in Philadelphia for nearly seven years. It finally gave up last month.

The chain, owned by Dutch conglomerate Ahold Delhaize, sued landlord Stobba Associates in U.S. District Court on July 13 to end its lease for a 16K SF space within the Abbotts Square Condominiums building. Giant seeks to recoup costs it incurred trying to build out a small-format Heirloom Market store, the Philadelphia Business Journal reports.

Giant took over the lease at the property in 2019 from a different Ahold affiliate after it pulled the plug on a previous small-format chain. Since then, it has been unable to open the Heirloom Market it planned for the space because it had insufficient electrical power supply to run a grocery store, the company alleged in its lawsuit.

Giant and the other Ahold affiliate paid rent every month through December 2020, when internal build-out revealed that the power supply did not contain sufficient amperage to carry enough volts into the premises, which is split between the ground floor and a basement, the lawsuit alleged.

Giant began withholding rent, claiming landlord default, because it had signed the lease based on Stobba's promise its electrical power supply was sufficient.

The default lawsuit between Giant and Stobba, owned by local developer Eric Blumenfeld, was settled in 2021. But it was based on Blumenfeld promising to work with the Philadelphia Electric Co. to resolve the power issue, Giant alleged in its July suit. The requisite work would have cost Blumenfeld at least $1M.

A final meeting June 1 between Giant, PECO and Stobba to either resolve the power issue or mutually terminate Giant's lease went nowhere, Giant spokesperson Ashley Flower said in a statement.

Blumenfeld contended that Giant had "ever-changing needs" for its planned store, which he called a "con job" in a statement to PBJ. He did not respond to Bisnow's requests for comment through multiple channels.

South Street Headhouse District, the local business improvement district, has taken over the space on a temporary basis and will run pop-up events until a more permanent use can be found, PBJ reports. Blumenfeld claimed to be seeking a more local grocery brand in his statement to PBJ.