Mamdani budgets $70 MILLION for city-run grocery stores as NYC hemorrhages cash: report

New York City Mayor Zohran Mamdani is proposing to spend $70 million on his plan for a network of government-owned grocery stores, a sum $10 million higher than he pledged on the campaign trail, even as his administration warns of a multibillion-dollar fiscal shortfall and raises the prospect of higher property taxes.

According to sources familiar with preliminary budget documents reviewed by the New York Post, the proposed funding would flow through the city’s Economic Development Corporation (EDC) and would be used to identify potential sites and construct five stores, one in each borough. One city source criticized the idea of moving forward with the grocery initiative while City Hall highlights a $5.4 billion budget gap.

The move comes as Mamdani has urged state leaders to approve a “tax the rich” proposal and has said he could otherwise be “forced” to raise property taxes by 10 percent as part of his first budget package. During his campaign, Mamdani promoted the grocery plan as a five-store pilot he said could be launched for about $60 million. He described the concept as akin to a “public option for produce,” arguing the city could redirect taxpayer money away from what he characterized as corporate interests and toward publicly owned food stores.

Critics have questioned how the city would manage day-to-day grocery operations, noting that the mayor has not provided detailed plans for how the stores would be run. During his campaign, a government-operated grocery store in Kansas City, MO, failed, where produce rotted and shelves were left bare when operators were unable to keep them stocked.

The actual cost of operating the stores remains unclear. Another source said the plans also included funding for a feasibility study related to the initiative. The EDC confirmed the plans but said the $70 million figure would cover construction of the five stores and would not include funding for a study. The agency did not specify how much such a study would cost or how long it would take.

The investment is a shift for the EDC, a quasi-independent organization tasked with promoting economic growth in the city.

Mamdani has defended the proposal, claiming the city-owned grocery shops would not pay property taxes or rent as a way to keep prices low. The funding proposal comes as Mamdani unveiled a $127 billion preliminary budget for fiscal year 2027, which he said addresses what he described as a historic budget gap inherited from his predecessor, Eric Adams.