Western Beef 5 Gallon Watre Nyc
Cheap Meat or Luxury Rentals? Within the Fight at Western Beef
A son's plan to upscale the grocery'south real-estate empire is reined in by his father.
The newly reopened Western Beef in Queens. Photo: Peter Castellana, Jr.
The newly reopened Western Beef in Queens. Photo: Peter Castellana, Jr.
The crown gem in the Castellana family real-estate empire is a 20,000-square-foot Queens warehouse wedged between a Home Depot and a row of mom-and-pop appliance stores. For v decades information technology was a busy grocery store that offered inexpensive staples as well equally specialty ingredients for the neighborhood'southward Asian and Latino residents: dumplings, seaweed, chayote. As the flagship store of Western Beef, its one time-orange exterior and its grinning mascot, Charlie the cactus, made information technology i of the well-nigh conspicuous businesses on College Point Boulevard. But in August 2018 it abruptly airtight.
When I visited the building last summertime, spray paint covered the windows, and the orangish exterior had been covered in white. The only bear witness of commerce was a man in a black ski mask hawking $15 watermelons on the border of the building's empty parking lot. Inside, though, it was loud and bright, every bit a brigade of structure workers installed copper pipes and rows of refrigerators, part of a plan to bring the grocery store back to life.
Over the final half-century, this indigestible building has transferred hands between three men named Peter Castellana. Peter Sr., the patriarch, who died in 2020 from COVID-19, used it as the headquarters for his mobbed-upward wholesale meat business concern, which was accused by the government of food-stamp fraud and securities violations. His son, Peter Jr., who took total control of the company in 1996, converted the meat business organisation into Western Beef and built dozens of outlets in New York'southward food deserts, then expanded to New Jersey and Florida. All along, he has tried to distance the company from his father'due south criminal associations. Now, at 61, he'south cleaning up after another Peter — his son, Peter III, who replaced him as CEO of the parent company, Cactus Holdings, in 2013. Six years subsequently, Peter Three was forced to sacrifice the visitor back to his begetter, who came out of retirement to reverse what his son had done. Before his father's return, the youngest Peter had begun shifting the company toward upscale real-estate development. The forty-twelvemonth-former scion saw a better future in the dozens of properties that Cactus Holdings had amassed across the v boroughs at low prices and at present were worth millions more.
With the yard reopening of the Queens grocery in December, information technology'due south clear that the male parent has won, at least for now. Peter Jr. and Peter III are both tan, brusque, and stocky, with jet-black hair and thick New York accents. Both take warm smiles and clothing aureate chains. The son's necklace, passed down from his male parent, features a crucifix pendant blessed by Pope John Paul I. They notwithstanding meet regularly; on Sundays, the Castellana clan normally gets together for Catholic mass or dinner, and sometimes both.
The two seem to have sworn an omertà -style code of silence over how exactly their disagreements played out in the boardroom. But Peter Jr. is determined that Western Beef stay in the grocery business for the low-income customers it has always catered to. "Yous can't be everything to everyone," he explained as we walked along a row of empty white shelves in the Queens warehouse. "Permit someone else cater to the Whole Foods, to the upper income. I'll stick to the low income. That'due south what I know; that'southward what I do."
Western Beef supermarket in the Foxhurst section of the Bronx on Tuesday March 17, 2020. Photograph: G. Ronald Lopez/ZUMA Wire/Alamy Live News
The rising of Western Beefiness mirrors New York'south transformation from a metropolis dominated by mob cartels to an higher up-board mecca of cutthroat capitalism. Information technology begins with a son trying to shed his father'south reputation as a tough guy for the Gambino crime family. In the 1950s, Peter Sr. was bedevilled of selling adulterated meat. In 1961, his wholesale company, Ranbar Packing, was institute guilty of "defrauding the government of $200,000 to $500,000 in a scheme involving stolen food stamps." During the 1960s, he served four years in prison for bankruptcy fraud. In the 1970s, he lied to the Securities and Exchange Commission almost the full scope and growing financial struggles of his business concern. And in 1981, he was charged with extortion afterward his employees threatened to break the legs of two small-time meat suppliers over an outstanding debt.
Like other mobsters of his generation, Peter Sr. sought to move beyond this history with generous donations and gifts to those in need. He gave to his church and dropped off turkeys to homeless shelters on Thanksgiving. A onetime law-enforcement official remembers Gambino dominate John Gotti calling upon the Castellanas to provide costless food for his almanac July 4 blowouts in Ozone Park. "[Gotti] would phone call Western Beef to ship over, you lot know, 1,000 pounds of hot dogs, and all the works," he said.
His son, Peter Jr., began unloading meat trucks for his begetter at historic period 12. He intended to go legit and began the Western Beef grocery chain in 1976. His commencement store operated out of his male parent's Flushing warehouse, which meant free space and cheap meat, just besides risked linking him to his mobster male parent. In the mid-'90s, as Mayor Rudy Giuliani made it his mission to interruption the mob'due south grip on food distribution, Peter Jr. cut his begetter out of the business, hired former FBI and NYPD officers to work security positions, and contracted with an auditing firm that employed Bart Schwartz, one of Giuliani's former U.S. Attorneys. In 1997, the firm announced that it "did non notice any evidence of organized crime influence or suspicious corporate affiliations or activities" at Western Beefiness.
Peter Jr. swears he never witnessed his begetter's unsavory practices, but plant that New York (and its major lending institutions) deemed him a tough guy nonetheless. "I understood it'due south gonna have my lifetime to possibly articulate upwardly a name for the next generation," he said.
He operated only in poor neighborhoods in Brooklyn, Queens, and the Bronx. National grocery chains were and then afraid to bear on these Nil Codes, and there was no contest. "The pockets we were going into didn't have supermarkets," explained Santino Montalbano, Western Beef's former real-estate director. He said that they didn't have the luxury of Google World dorsum then, and would instead spring in the car and bulldoze "street past street, block by block." The visitor often set up shop nearly customers in public-housing projects. To save money, they'd scoop up lots just off major thoroughfares, and fabricated ambitious offers for parcels they liked, fifty-fifty if they weren't on the market.
From left: Some of the properties owned by Cactus Holdings include empty lots like 994 Myrtle Avenue. Photo: Google Maps Another property owned by Cactus on Metropolitan Artery. Photo: Google Maps
From left: Some of the backdrop owned by Cactus Holdings include empty lots like 994 Myrtle Avenue. Photo: Google Maps Some other property owned past Cact... From left: Some of the properties endemic past Cactus Holdings include empty lots similar 994 Myrtle Artery. Photo: Google Maps Another property endemic past Cactus on Metropolitan Avenue. Photograph: Google Maps
This strategy, born out of necessity, made Western Beefiness into a $300 1000000 concatenation with profit margins that were well higher up manufacture norms, and today information technology operates xx stores in the New York area alone. Past the early on 1990s, Charlie'southward face had popped upwardly in more than a dozen food deserts in the urban center. Where the company saved coin was in the stores themselves, where lower-quality products and poor weather condition prevailed. Shortly later on Peter Jr. took over Western Beef, the company was failing 60 per centum of its sanitary inspections, compared to a high of 40 percent at other supermarkets.
The company's sprawling 140,000-foursquare-foot headquarters in Queens, which features offices, a wholesale wing, and a store, has an impressive view of the Manhattan skyline and is now worth more than $16 1000000, according to the city's property-assessment database. The family has likewise scooped up many smaller properties across the five boroughs, from empty lots to modest residential and commercial spaces that bring in passive rental income. Ane is a three-story building located only nether the Brooklyn-Queens Expressway in Carroll Gardens. At present worth nigh $three million, it has 1,560 foursquare anxiety of residential space on the offset floor, plus 2 brightly renovated apartment units above information technology. To this day, Peter Jr. still drives effectually neglected neighborhoods, making offers on cheap parcels of state or buildings, even if he's unsure exactly how he'll use them. Cactus Holdings, the property arm of Western Beef, now claims to own more than 2 million square feet of real estate in the urban center.
Unlike his male parent, Peter 3 never actually wanted to join the family business. He was drawn first to tech, then real estate. He ran a computer-chip business while attending NYU, and after used the profits from that venture to provide loans and investment to hard-upwardly existent-estate developers after the 2008 financial crash. While Wall Street firms once sneered at Western Beefiness, Peter 3 snagged a college internship at Morgan Stanley. But he e'er knew that the family unit expected him, as the oldest son, to stride up and run the business. When, in 2009, his father invited him inside the visitor, he believed that he could bring the business out of the quondam world. "I can't help myself," he told me. "I see something that could exist improved, and I meliorate it."
For Peter Iii, the gentrification remaking New York City'south poor neighborhoods was a threat to Western Beefiness'south depression-income client base of operations, but too an opportunity to test a new business concern model. He believed that the company was worth far more as a real-estate portfolio than as a grocery chain. Some of those unassuming apartment buildings, modest shopping centers, and warehouses — not to mention the grocery stores themselves — are attached to air rights more valuable than the property'south initial purchase price.
Before he was appointed CEO in 2013, his father sent him to Florida to turn effectually an underperforming store in Boca Raton. When the store succeeded, his male parent handed him the keys to the company, then semi-retired to the Sunshine Land.
In one case in charge, Peter III put his real-estate-beginning strategy into activity right away. He shuttered 7 Western Beef stores, nearly all of which he tried to convert into upscale residential developments. At a store in Long Island City, he found a residential developer to charter the property. They tore downwards the store and erected the Astor, a glistening apartment complex with rooftop views of the Queensboro Bridge. He also purchased a holding in the Bronx, partnered with a developer, and hired an architectural firm to programme a nine-story, 159-mixed-unit development, which would have been one of the biggest projects in the borough.
After he emptied out the Queens flagship in 2018, Peter Three pushed for one of the store'due south two commercial lots to be rezoned for residential use, hoping to put up a 100,000-square-human foot apartment building. (He envisioned that the 2d lot could host a national outlet or a major Chinese grocer, perhaps with more apartments on top.) "I had a business concern programme, all the numbers worked out," he told me. "I had some of the best economic minds available to me."
He too, curiously, started a now-shuttered security business firm. Called ISF Security and co-founded in 2016 with veterans of the Israel Defence Forces, the coiffure seemed to operate mostly inside Western Beef stores. A 2018 YouTube video shows a beefy ISF baby-sit roughing upwardly a Black client who'd manifestly stolen some bread. "It's for my baby," the human says before beingness roundhouse-kicked in the face. Similar stories of violence and intimidation have plagued Western Beef's internal security staff, which is run by law-enforcement veterans. (In a 2011 lawsuit that was later dismissed, a customer declared that a guard knocked him unconscious only for whistling in a store to find his children.)
This new management didn't line up with his father's, who remained board chairman and oftentimes popped into company headquarters. Mike Harkins, a erstwhile FBI amanuensis and Western Beef'due south recently retired security director, told me that Peter III's short-lived security firm was indicative of a broader strategy that "didn't brand a lot of sense." Santino Montalbano, Western Beef'due south old real-estate director, said he didn't want to "go into the politics of the family," simply added that, under Peter 3, the company "was bleeding."
Peter Jr., for his office, felt his son was neglecting Western Beefiness, the family unit's bread and butter, while rushing into high-toll, high-adventure ventures. Peter Jr. told me he'd always known his son was passionate about existent estate, simply said that this aspect of the business could only be expanded with profits from the grocery business. He as well said he shut downward ISF Security, but declined to explain why. "That's some other whole story," he said. "You'll demand another two days."
When Peter Jr. took dorsum control of Western Beefiness, he halted the high-end residential projects that his son was planning. At the site of a recently reopened Western Beef outlet well-nigh the Marcy Projects in Bed-Stuy, developers had "offered u.s.a. big, big money for the real estate," Peter Jr. said. "They wanted to put huge condominiums over there, like they're doing in the whole expanse." But he rejected their offer, and similarly backed out of his son's Bronx residential project.
Peter 3 denied that the business had declined nether his tenure, and said that he left the visitor to focus on real estate and be his own boss. "I tin do it on my ain," he said. "I am doing it on my ain." A yr afterward his father's return, he started a real-estate firm, Cactus Asset Direction, with his brother, Andrew. They manage more than than 25 mixed-use developments and Western Beef backdrop where he is a role- or full-fourth dimension owner (he is nonetheless a major shareholder in Western Beefiness). He expects his company volition continue to develop residential projects that are anchored past Western Beefiness grocery stores and other retail businesses in "ripening" areas like Carroll Gardens and the Bronx. Most of all, he'south relieved at his newfound autonomy. "In that location's something about going home on a Sunday and having dinner with my family and not talking almost business that is pleasant," he said.
He's also open up to retaking his sometime championship at some point down the road. However, as nosotros toured one of his commercial properties in Prospect Heights, success equally a programmer still seemed to be out of reach. The three-unit of measurement infinite had just one tenant, Shining Smiles Daycare, though he said he'd soon announce others, as well as more ambitious projects with more than foursquare feet. "Real estate is a time business," he explained.
The pandemic-fueled grocery-store boom has made Western Beef extremely profitable over the by 2 years, and Peter Jr. wants to continue growing. Recently, he paid $xx million to buy a defunct gym in the Bronx to develop into another grocery shop, which will largely serve nearby residents of Section viii housing.
Merely in a city of increasingly upscale-grocery and specialty-food stores, not everyone is in favor of that ethos. In December 2020, a Western Beef shop on the Upper West Side that largely served residents of the Amsterdam Houses projects lost its lease. Local assemblymember Linda Rosenthal tried to save it, arguing that "the community desperately needs a full-service supermarket with lower price points to ensure that depression-income New Yorkers can continue to afford food in the neighborhoods they live in and helped build." But the landowner, Brodsky Holdings, replaced it with Brooklyn Fare, a gourmet grocer that agreed to pay far more hire.
"When yous see a shop like Western Beef replaced by Whole Foods, the household costs to a poor family unit go upwardly significantly, which can button them somewhere new," said Matthew Kwatinetz, a professor of real manor at NYU and director of the school'due south Urban Lab. Moreover, when an anchor store similar Western Beefiness shutters, information technology likewise sends signals to nearby property owners to either jack up rents or flip their buildings. He believes that the family unit'due south deep and expanding roots in the metropolis are, on the whole, positive.
"Who would think that a in one case-mobbed-up family would terminate powerful market forces and, quite often, exist for the people?" Kwatinetz asked me. "It'southward confusing, just it kind of makes sense." The Castellanas' healthy skepticism of outsiders has kept their massive portfolio out of the hands of developers. One could almost say that Western Beef provides a bulwark against gentrification in the depression-income areas where it has set up shop.
Like his father, Peter Jr. insists that this is all role of the family unit'due south mission to feed the poor and support the community. Merely for customers of Western Beef, that rhetoric does not always mean fresh food. For decades, customers have complained about mislabeled seafood, rotten meat, and unsanitary store conditions. The visitor has been accused of tax tricks, wage theft, fifty-fifty intimidation. Despite Western Beef's troubled history, the city selected it in 2011 equally the inaugural partner in the Food Retail Expansion to Support Health (FRESH) program, which aimed at establishing more grocery stores in food deserts. While the plan'south track tape in achieving its goals was less than stellar, according to The City, Cactus Holdings' ambitious lobbying of Eric Adams, and then Brooklyn borough president, seemed to assistance the company get some other circular of FRESH subsidies in 2018. On a contempo trip to the company's Prospect Avenue store in the Bronx, I saw rotten produce, expired yogurt, and smelly, questionable meat. Peter Jr. argued that quality is always improving. "If nosotros see a problem, we clean it up, we set up it," he said.
Last twelvemonth, more 100 local customers petitioned Peter Jr. to practice ameliorate. "Give u.s. a pick," the petition reads, "or leave our neighborhood!" When the Flushing location airtight, in 2018, some residents lamented its loss, only one posted on Facebook, "I'd rather swallow a city rat [than] that garbage depression-quality beef." "Sometimes I've had to bring [the meat] dorsum because it'south no good," one elderly client told me. Food activist Marilyn Moore, who organized and submitted the Bronx petition, accused Western Beef of "food apartheid." But she also noticed that the visitor had listened to some of her demands. The Bronx outlet was freshly stocked with organic options, including various oats and flours from Bob's Red Mill. "I am so happy they have this as an oatmeal option," Moore said enthusiastically. "This is what joy looks like."
In late December, Peter Jr. was buoyant equally he walked the aisles of his Flushing flagship on its thou reopening on a dank Saturday. Equally Christmas music was piped in over the store's intercom system, customers, most of them Asian and Latino, perused shelves of fruit, vegetables, beef (of course), and, for the first time, alive seafood in water tanks.
Peter Jr. told me he'd invested roughly $1.two meg to become this store back in shape, a tribute, of sorts, to his late father. Information technology was the building that his dad had bought and first developed, the place where Peter Jr. learned the family business, then launched his own venture while sleeping on a weathered couch in the building'southward back office. (As he'd overseen the finishing details of the relaunched grocery store, Peter Jr. often wore one of his male parent's favorite jackets.)
He told me that family unit members planned to drop by for the opening, including his son, who'd shut down the store 4 years agone. He reiterated that Peter 3 has a "expert mind for the existent estate and developing," but also that his business concern strategy had been "premature." He farther made clear that he has no plans of relinquishing company command any time before long. "I only want to go our concern back," he explained. "This is my baby. This is what I alive for."
Source: https://www.curbed.com/2022/05/western-beef-real-estate-cheap-meat-luxury-rentals.html
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