Zo’s bargain-basement groceries are about to cost New York City taxpayers a fortune.
Mayor Zohran Mamdani’s flagship city-owned grocery store will set back taxpayers a jaw-dropping $30 million to construct from scratch at the historic La Marqueta site in East Harlem, officials confirmed — even as nearby store owners fear it will devour their business.
La marqueta hi-res stock photography and images – Alamy
The new grocery at the longstanding city-owned La Marqueta marketplace will operate under a yet-to-be-selected operator who gets a sweet rent- and tax-free deal, City Hall sources told reporters.
Mamdani pitched the low-cost setup — unveiled during his Sunday event marking his first 100 days in office — as a way to deliver relief to struggling New Yorkers hammered by sky-high food prices. But local grocer Abdul Shaher, owner of Healthy Choice right near La Marqueta, wasn’t buying the efficiency pitch given the eye-popping upfront cost.
“How can they manage something like that? A small supermarket?” Shaher said, laughing in disbelief.
Even with New York’s notoriously high union construction costs, a typical 25,000-square-foot grocery should cost around $15 million to build, according to Manhattan Institute expert Adam Lehodey.
“Thirty million dollars for one store is exceptionally high,” Lehodey said, noting that land costs usually drive up new builds — and here the city is already waiving rent.
Mamdani has floated spending $70 million in taxpayer dollars overall to roll out five city-owned groceries across the city. While La Marqueta may be the first picked, other sites could open sooner, officials said. One more grocery is slated for the end of this year, with all five up and running by the close of Mamdani’s first term in 2029.
Neighborhood bodega (mini market) on East 104th Street in East Harlem, New York City Stock Photo – Alamy
His team is now hunting for locations that won’t need full ground-up construction to keep costs down.
Opening five city-run stores, one in each borough, was a signature affordability pledge in Mamdani’s winning mayoral campaign. Critics warned it could create “Soviet”-style markets that drive private businesses under, with Gristedes owner John Catsimatidis even threatening to shutter or sell his chain if Mamdani won. Others pointed to failed government groceries elsewhere, like a shuttered city-owned store in Kansas City.
Mamdani brushed off the doubts, highlighting smaller successful examples like one in St. Paul, Kansas. He also noted New York already runs six public markets, including La Marqueta — a site with deep symbolic ties to his hero, former Mayor Fiorello La Guardia, who launched it in the 1930s to help working families save on produce.
“We will continue his legacy,” Mamdani declared. “We are building a brand-new store on city-owned land currently sitting empty in East Harlem, a neighborhood where nearly 40% of households received public assistance or SNAP in the past year.”
Local grocers aren’t convinced. Victor Vazquez, manager at nearby City Fresh Market, said the new store “is gonna affect us real hard. It’s too near! Our prices might have to go up.”
Bodega owner Augustine Espinal at Pamela’s Grocery Store said he’s already seen business dip with La Marqueta operating nearby. “The city has a much stronger business than I do. It’ll be a loss in income,” he said.
Many Harlem residents, however, welcomed the idea, calling the area a food desert plagued by expensive options and fast food. Maria Huerta hoped the new store would stick around long-term despite the hefty $30 million price tag.
City officials say they’ll bring in experienced third-party operators who must pass all subsidies directly to customers through lower prices. Strict rules on pricing, labor, and operations will apply.
Some experts worry the plan could balloon in cost over time amid the city’s tight budget. Others argue the city should instead ease barriers for national chains that already offer affordable groceries, rather than launching its own subsidized operation burdened by high wages and slow procurement.