Maloney on other public grocery models and capital cost per square foot

One of the other things I want to look at is just the history of other public grocery stores in the United States.

So there's, and I guess have you all looked at those examples?

What are we doing differently here to make this pilot more successful?

I don't know all the models, but I know the team has looked at it.

I think one of the key things is that we're looking at a core basket.

We're not offering everything.

Although it's going to be a regular grocery store, we're having a third-party operator who has experience in running grocery stores to manage all the things that are important to run a grocery store, including inventory.

purchasing, et cetera.

So those are the things that we made sure that we were incorporating so that they were successful.

The examples I saw show that it costs, for 250 grocery stores globally through the Defense Commissionary Agency, it was $1.4 billion per year in federal appropriations for zero revenue.

Another one in St.

Paul had...

Zero competition nearby, but it was still a $400,000 federal subsidy.

Yeah.

And so I guess I'm getting at the long-term operations of this, particularly if we're putting forward a really large capital investment, we want it to be a sustainable solution that's going to...

Yeah, a sustainable solution.

Yeah, yes.

That's the commissary model, so we did look at that model.

We're not basing our NYC groceries on the commissary model.

Again, everything in that store is discounted.

So this is a smaller subset of groceries.

That will be core basket.

On the $30 million for the 9,000 square foot build out, that's roughly four times the cost of standard New York City retail construction.

So can you speak a bit more about why we expect it to be so expensive?

So this is a ground-up construction on an empty lot under sort of the railway there.

And this is part of an entire reimagination and reimagining of La Maqueta, which spans eight blocks.

The team looked at it very closely and budgeted that amount for city capital.

So this is a more complex site than others.

Correct.

For a pilot, did we look at taking on a less complex site that would cost less?

We inventoried, you know,

So many sites, it's hard to even explain how many sites we looked at.

And again, the criteria was, we had multi-pronged criteria, which was all the things we talked about, making sure it didn't, like for the city's measure, it didn't have enough food accessibility, that it was dense, that it had transportation,

and that it could be brought online by 2029, which a lot of the city sites, the developments, are not going to be available by 2029.

So that was really important because we want to get these up and running.