Greater New York Chamber of Commerce President and CEO Mark Jaffe, a founder and legal counsel for the Multicultural Business Coalition that is involved in suing over New York City Mayor Zohran Mamdani's controversial plans to open government-linked grocery stores in the Big Apple, described the initiative as "disastrous" for business owners, slamming the Democratic socialist's administration as "heartless."
"Government should not be in the business of taking out private enterprise. That is not what America's about," Jaffe told Fox News Digital during an interview on Tuesday.
A class-action suit, which alleges that the plan runs afoul of New York civil rights laws and the state Constitution's Equal Protection Clause, seeks relief and damages, while another suit explicitly calls for permanently blocking the operation of "the municipal grocery stores, in absence of undertaking necessary studies and analysis."
The group took legal action because the "administration wasn't listening," Jaffe said.
"They're embarking on a plan that will be disastrous for people that are in business and creating jobs," Jaffe said. "And the heartless administration feels that if you can't compete with one city-run grocery store, you shouldn't be in business. That's just wrong."
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Mamdani plans to open five city-owned grocery stores, one in each borough, with the first location expected to open next year.
"Under the model, the City will own the land and cover overhead costs like rent and construction. A private operator, selected through a request for proposals, will manage daily operations and be contractually required to pass savings directly to customers on a core basket of everyday staples," an April press release noted.
Mamdani has said that various items at the stores will be priced at 30% lower than normal retail prices.
"This core set of goods will include all fresh produce, meat and seafood along with 20 other essential items like cheese, milk and bread. Here's how it will work: Once a month, our five city-run grocery stores will set prices for this core set of goods at 30% below typical retail prices," he said last month.
But Jaffe argues that the mayor's plan is not the right way to help those in need.
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"How can one store in East Harlem help feed the disadvantaged and struggling people that deserve to get nutritious food and affordable food? They can't afford to get up to this store to buy a bag of groceries. They need to go shopping locally where they can do it quickly and conveniently. And there are so many better ways to get this done. You can use electronic debit cards. Their number, their research indicates that the average savings in this program may be $90 dollars a month. So give people who are in the target range that we should help $90 dollars a month and help support a local business," he said.
Jaffe warned that people could purchase the discounted groceries from the government-linked stores only to turn around and resell the items, causing the municipal grocery stores to have insufficient quantities of those products in stock.
"If you study the history, I've never seen a government-run supermarket — whether it's in Chicago or another country — that didn't end up with empty shelves," he noted. "And let me tell you why. If I wanted to buy, hypothetically, bananas, and I can get 30% off, what is to prevent me from getting all the bananas I could possibly fit in my cargo van and then selling them on the streets at 15% off? That's American entrepreneurship. And without checks and balances, and I don't think the city has any, this store will not even be sufficiently stocked."
Jaffe floated the prospect of a third lawsuit.
"This is unfair competition. You might see a third lawsuit filed soon, because if any other company with unlimited resources did this to take advantage of the marketplace, it would be called anti-trust," he asserted.
$30 million has been allocated for construction of the East Harlem government-linked grocery store, which is slated to open in 2029.
Jaffe, who said he has spoken to and interviewed dozens of individuals knowledgeable about the "supermarket construction industry" who think that the store could be opened for nearer to $10 million, questioned where the remaining $20 million is going. "We have a word for it. It's called patronage," he said.
"If we get away with one store, what's to stop them with their 100-year plan to make sure nobody owns a store anymore? The government owns everything," but for those "lucky enough to be the privileged person and get a patronage job, they'll take care of you."
Fox News Digital reached out to Mayor Mamdani's office on Wednesday.
Asked about the legal challenge on Monday, Mamdani said, "I continue to be fully confident in both the legality and the importance of our initiative to deliver five city-run grocery stores, one in each borough, to the people of our city."
"We are talking about a reflection of a cost of living crisis that has seen grocery prices increase by about 30% over the last few years<' he added. "And we're also talking about delivering five city-run grocery stores in a city of eight-and-a-half million people that has more than a thousand grocery stores."
"And we've seen, in fact, with Essex Street Market in Manhattan" and "Moore Street Market in Brooklyn, a model where the city has subsidized groceries, and it has not had a negative effect on bodegas around them or on grocery stores around them," he said, adding, "I'm confident both in the legality of this, that it will stand up in court, and in the importance of delivering it."
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When asked if there was anything he could do to aid bodega owners who think that they will lose income, Mamdani replied, "Absolutely. What we can do is continue with our approach citywide of looking for ways to cut costs and cut the regulations that so many bodegueros as well as grocery store owners have to jump through in order to do their work."