Tax money would make Mamdani’s food discounts ‘viable’

Mayor Zohran Mamdani’s promise of cheaper food staples at five city-owned grocery stores is expected to require straight tax dollar payments to achieve the promised 30% discount on staples.

Private operators were told on a virtual information call with an Economic Development Corporation official that they would have to figure out how much direct subsidy is needed, even on top of the savings from free rent, free property tax and free space Mamdani said would help cover it.

“We would ask respondents to estimate how much additional operational subsidy they would require to provide that 30% discount,” Jamie Horton, an EDC official working on the NYC Groceries program, said on the call obtained by NY1.

The direct subsidy is known in the program as an “Affordability Payment.”

“The Affordability Payment is designed to make the core basket financially viable,” he said.

After the call, Horton spoke to NY1.

“This is not an unlimited subsidy,” he said. “We’re going to go through the city budget process like any normal expenditure.”

“This is why we’re running a competitive procurement to drive that number down as much as possible,” Horton continued.

Errol Schweizer, a supermarket industry expert who consulted on the EDC’s request for proposals, called the “Affordability Payment” the “skeleton key” that unlocks the savings Mamdani is seeking.

“When you factor in labor, administration, IT, some of the other things the city is not covering, that’s going to be the majority of it,” he told NY1. ” That’s what the affordability payments are likely going to cover on these core basket items.”

That incensed Fernando Mateo, spokesman for United Bodegas of America, which opposes the NYC Groceries program

“The city is going to try to do everything it can to make the impossible possible,” Mateo said.

On questions of employee wages, determining average market value of staples, dealing with wholesale price spikes, and the perks of a loyalty rewards program, that would be up to the private operator to figure out and negotiate in the contract.

The city is looking to contract with a private operator willing to run multiple stores, even all five of them. Though the proposal would cover city grocery stores in boroughs where a location has not yet been selected — Brooklyn, Queens and Staten Island.