Whole Foods Drama: Trump Palace Condo Sues, Demands Construction Halt

UPPER EAST SIDE, NY – In March 2024, news broke that a new Whole Foods concept would be opening on Third Avenue at E. 69th Street, potentially occupying the site of the former Food Emporium.

Also planned for the space? A Five Below.

Both would be located in the base of the Trump Palace Condominium and construction is ongoing – or was, depending on how a new lawsuit plays out.

The Lawsuit

The Board of Managers of the Trump Palace, a luxury high-rise located at 200 E. 69th Street, has filed a lawsuit against Whole Foods Market Group, Five Below, and Regency Centers – the owner of the commercial unit at the base of the condo which the two stores will occupy – alleging that ongoing construction in the building's commercial spaces has caused significant damage to the property and created a major disruption for its residents.

The lawsuit, which was first reported by Crain’s, was filed on Aug. 12 in the New York Supreme Court.

It seeks to halt construction, enforce a requirement for written consent before any further alterations to the building, and recover at least $500,000 in damages for repairs and disruptions caused by the defendants' actions.

The suit outlines a series of grievances and accuses the defendants of reckless and negligent construction practices.

Work being done by Whole Foods and Five Below, the suit claims, has led to severe issues including flooding, electrical outages, and a gas shutoff.

Gas Leak

Trump Palace hadn’t previously experienced any issues with its gas lines, the claim notes, until a day on which defendants performed “core drilling.” Following the drilling, the suit claims, one or more gas lines began to leak, leading Con Edison to shut off service to the entire building.

As a result, the suit claims, Trump Palace must undergo a “mandated testing and recertification process, which will require work in every apartment in the building and will take many months.”

Meanwhile, residents “have lost all use of their stoves and cooktops” as well as the building's laundry dryers, according to the suit.

No Tenant Protection Plan

The Board of Managers is also accusing Whole Foods of failing to comply with the New York City Department of Buildings' requirements for a Tenant Protection Plan (TPP), which is mandatory in buildings with occupied residential units during construction.

The lawsuit claims Whole Foods falsely represented that the building did not contain any occupied units in its filings, despite the presence of nearly 300 apartments. As a result, the lawsuit claims, construction work has been carried out without proper safeguards to protect the health and safety of residents.

In addition to the construction-related damages, the lawsuit accuses the defendants of installing unauthorized signage on the building’s exterior, despite explicit rejection of their proposals by the condo board. According to the lawsuit, this damage may be “impossible” to repair, given the difficulty of matching 34-year-old granite.

A final straw moment may have occurred on Aug. 7, 2024, when the building’s manager spoke with a foreman regarding the granite. “Get the f*** out,” the manager was told, according to the lawsuit.

Whole Foods is being represented by Eversheds Sutherland.

The company is not able to comment on pending litigation, a spokesperson told Patch.

September Opening?

An email included in court filings appears to indicate that the new location was scheduled to open in September, per correspondence regarding that troublesome signage.

“This is a HUGE impact to our tenant’s ability to open for business which is a Grand Opening in mid-September," a project manager at Regency wrote, in an email regarding the disputed signage.

"This is a national retailer opening its first new concept store nationally at this location. [It] is imperative the scaffolding upgrade starts on Monday and new signage shortly after on August 1st in order for the tenant to meet deadlines for an effective opening date to the public.”

Depending on how litigation unfolds, that opening may be delayed.

The Trump Palace, a 55-story building designed by Frank Williams, was constructed in 1990. Currently available units are start at just under one million dollars, for a lower-floor one-bedroom.

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