A bankruptcy judge on Wednesday denied a Philadelphia developer's request to force A&P, the owner of an unopened Northern Liberties Pathmark, to abandon its stalled lease so that a new supermarket tenant could be secured, the company said.
The ruling by U.S. Bankruptcy Judge Robert D. Drain in the Southern District of New York means the Great Atlantic & Pacific Tea Co. has until July 10 to decide what to do with its unopened new store near Second Street and Girard Avenue, A&P spokesman Eric Andrus said.
Bankruptcy proceedings have prevented the opening of the newly constructed supermarket at the old Schmidts Brewery site in the resurgent river-ward enclave just beyond Center City.
In March, developer Bart Blatstein sought to speed things up by filing a court request to force the company to reject the lease or move forward with it.
"It's just a little over a month away - not that long of a time," Blatstein said when told of the judge's ruling. "We've gone this far; another month isn't going to make a difference."
Describing the situation as frustrating, he said three other supermarket operators had expressed interest in opening at the site.
"All that is needed is food," Blatstein said of the supermarket. "It's all fixtured: All the refrigeration, the shelving, everything is completely done."
Residents of the gentrified former industrial neighborhood thought that, around Christmastime, their first and only supermarket would finally open, two years after the lease between Pathmark Stores Inc. and Northern Liberties Development L.P. was put together Sept. 8, 2008.
But in December, A&P filed for Chapter 11 bankruptcy protection, throwing the fate of the supermarket - and the hopes of its eventual customers - into limbo.
The debt-addled corporation has spent several months closing a number of unprofitable Pathmark and Super Fresh stores across the Mid-Atlantic, while assembling a plan to restructure its business.
Blatstein, saying the delay was costing him money, hoped a bankruptcy judge would compel A&P to make a decision.
The supermarket is in a shopping center near the Piazza, another key component of a redevelopment project executed in recent years by Blatstein that brought new housing and dining establishments to the neighborhood.
Blatstein, through Schmidts Retail L.P., argued to the court that A&P's delay in opening in the top floor of his two-story shopping center was affecting his ability to sign other tenants and threatened the project's financing obligations.
The developer also urged the judge to consider claims that Pathmark officials had indicated a desire to walk away from Northern Liberties - a contention the company neither confirmed nor denied.
"The fact is, the Debtors have not reached a decision regarding whether to assume or reject the lease," A&P wrote in its April objection to Blatstein's request, "and any preliminary indications of desire or intent to go one way or another are irrelevant."
A&P said it needed time to review the fate of all of its 768 leased properties. Such a "comprehensive and time-consuming analysis" was being undertaken by Hilco Real Estate L.L.C., the company said.
"Given the significant value of their leasehold interests," the company's attorneys wrote, "it is imperative that the Debtors preserve their rights with respect to these assets to the maximum extent for the benefit of all their constituents."