NYC's city-owned markets keep food cheap, at a cost

When Mayor Zohran Mamdani proposed a pilot project for city-owned grocery stores during his election campaign last year, critics like Gristedes CEO John Catsimatidis derided the idea as “a delusional notion in the name of radical socialism.”

But New York already has a version of city-owned groceries: its six public retail markets. Three of them — Essex Market on the Lower East Side, La Marqueta in East Harlem, and Moore Street Market in Brooklyn — are directly managed by the city’s Economic Development Corporation, or EDC.

Newly obtained financial records show that those three markets ran a combined operating loss of roughly $3.6 million in fiscal year 2024, a modest subsidy by city standards that helps keep food prices low, preserves legacy vendors, and, in one case, incubates a restaurant group that reshaped NYC’s dining scene.

EDC rents city-owned properties to private vendors at below-market rates, while covering operational costs such as utilities, security, janitorial services and maintenance.

According to an appraisal that EDC commissioned in 2025, retail space at Essex Market could command $115 per square foot in rent on the open market.

But records show that some vendors paid as little as $38 per square foot in base rent that fiscal year, with an average rent of around $91 per square foot. Records for La Marqueta and Moore Street Market showed even lower base rents.

The EDC, a quasi-public nonprofit that manages city-owned property, claims that the other three public markets — at Arthur Avenue in the Bronx, 13th Avenue in Brooklyn, and in Jamaica, Queens — were each profitable and helped EDC offset expenses elsewhere.

The EDC says the point of the markets is not to turn a profit but to provide access to affordable, healthy food.

Nevin Cohen, director of the CUNY Urban Food Policy Institute, which works “to make the food system just, healthy and resilient,” said in an email that the markets’ costs are modest, comparable to a different EDC program called FRESH (Food Retail Expansion to Support Health), which provides tax breaks to companies that put grocery stores in underserved neighborhoods. The FRESH program costs $3 million-$4 million a year, according to a city comptroller report from 2024.

Many vendors pass along their considerable savings on rent to customers in the form of deeply discounted prices. At Luna Brothers Fruit Plaza, a produce and grocery stand at Essex Market, prices are low, with five limes selling for $1 and large bunches of fresh herbs for $1 each.

In at least one case, the favorable rents don’t just help grocery vendors, but restaurants as well.

'The single biggest inflection point'

When Roni Mazumdar and his father opened Masalawala on the Lower East Side in 2011, it served Indian food familiar to American palates like chaats, tikka masala, and tandoor dishes.

In 2018, Mazumdar teamed up with chef Chintan Pandya to open Adda in Long Island City, under a new restaurant group called Unapologetic Foods, serving authentic Indian cuisine representing regions and styles beyond standard Americanized dishes.

Early rave reviews had New Yorkers flocking to Queens. But Mazumdar said Manhattan real estate was harder to crack.

“The reason you see a lot of ‘ethnic food’ – a term I’m not a fan of – in the fringes of the city, not necessarily on Park Avenue, is because it’s cost-prohibitive,” he said.

Mazumdar said some landlords rejected the group outright. “I don’t want Indian cuisine here,” he recalled them saying. “I don’t want my building smelling.”

Then Unapologetic won a bid for the marquee space at Essex Market: a turnkey restaurant layout at the front of the building, facing Delancey Street at the foot of the Williamsburg Bridge.

Mazumdar said the difference wasn’t just the location, but the lease.

“The single biggest fixed cost for a restaurant is rent,” Mazumdar said. “If that rent goes above 10% [of revenue], you really have an uphill battle.”

EDC’s appraisal estimated the space could fetch $130 per square foot, which would have required the restaurant to do more than $1.6 million in sales in its first year. For a new concept built around lesser-known regional Indian cuisine, that would be a high bar to clear.

Instead, EDC offered a lower base rent of $80 per square foot, plus a percentage of revenue over a certain threshold. That risk-sharing model lowered the restaurant’s fixed costs in its earliest, most precarious months.

Dhamaka opened in 2021 with regional dishes like goat neck biryani and rabbit curry with no attempt to soften flavors for Western palates. The New York Times made it a critic’s pick; Pandya won a James Beard Award for Best New Chef in New York State. The restaurant turned Unapologetic Foods into one of the most influential Indian restaurant groups in the country.

The group went on to relocate Adda to the East Village, move Masalawala to Park Slope, and open four additional restaurants, Semma, Rowdy Rooster, Naks, and Kebabwala. Semma, which earned a Michelin star and topped the New York Times’ list of 100 best restaurants in New York City in 2025, was the first in a wave of high-end South Indian restaurants that have opened in the city in recent years.

Mazumdar called the Essex Market lease the single biggest inflection point for the restaurant group's trajectory.

“A normal flat rent structure makes it impossibly difficult for somebody to take a chance like we did,” he said. “Dhamaka would not have existed if it wasn’t for this structure.”

Under the agreement, Dhamaka’s rent increases over time while the revenue-sharing component decreases.

“Most developers think if you do something like this, you’ll make less money,” Mazumdar said. “But if the business works, you actually end up making more.”