NEW YORK CITY — The Multicultural Business Coalition filed two lawsuits against New York City Mayor Zohran Mamdani in New York State Supreme Court on Monday. The legal challenge targets the city's plan to open five municipally owned grocery stores by 2029, with one in each borough.

The coalition alleges that the city-owned grocery store plan violates the civil rights of smaller, immigrant- and minority-owned businesses. One of the lawsuits is a class-action complaint filed on behalf of hundreds of store owners who are members of groups historically discriminated against. The lawsuits argue that the mayor's plan violates state civil rights laws and the equal protection clause of the State Constitution.

Mark Jaffe, general counsel for the Multicultural Business Coalition and president of the Greater New York Chamber of Commerce, outlined the economic disparity created by the municipal model. "You cannot expect hard-working small business owners to compete with a supermarket that isn’t going to pay rent, won’t have to pay an electric bill and won’t have to buy their products at full price," Jaffe said. The coalition argues that smaller stores would be unable to match the discounts offered by city grocery stores and will be put out of business.

One lawsuit argues that the city did not conduct any serious analysis of how the new stores could affect smaller neighborhood grocers before launching the initiative. Another suit contends that the city does not have the legal authority to create the stores. The Multicultural Business Coalition represents hundreds of small supermarkets, bodegas, and grocery store owners through 50 chambers of commerce representing ethnically diverse businesses. The organization was formed in May 2026 and is registered as a 501(c)(4) nonprofit organization.

Frank Garcia, chair of the Multicultural Business Coalition, connected the current dispute to his family's history in the city's food retail sector. "My grandfather opened up one of the first bodegas in the late 1960s when East Harlem was burning and the A&Ps and Waldbaums were leaving," Garcia said. He noted that his grandfather established the first Latino Grocery Association to protect the rights of immigrant store owners. I am proud to be following up in his tradition because what Mamdani is doing is disgracing his memory, he added.

Ken Roldan, president of the Multicultural Business Coalition, characterized the municipal store plan as contradictory to the mayor's stated values. "Make no mistake about this plan. It is a direct assault on minority business by a mayor who claims to be a champion of disenfranchised poor and working-class New Yorkers," Roldan said.

Jairo Guzman, president of the NY State Mexican Chamber of Commerce, described the diversity of the city's food retail landscape. "The Puerto Ricans were the bodega pioneers, and they were followed by the Dominicans, the Arabs, the Koreans, the Chinese, and finally my Mexican business members," Guzman said. He called food retailing from bodegas to supermarkets New York City’s great mosaic. "Mamdani needs to withdraw his disastrous plan and work with us to find different ways to bolster and sustain what so many NYC immigrants have created," he added.

Mamdani proposed introducing city-owned, subsidized grocery stores during his mayoral campaign. The New York City Economic Development Corporation is overseeing the rollout of the program. Waverly Neer serves as senior vice president of groceries.

The city-owned grocery stores will offer produce, meat, seafood, pantry staples, dairy, and other refrigerated goods at prices 30% below typical retail prices. Mamdani stated that the program is projected to cut New Yorkers’ average grocery bill by 15%. City Hall projects the discount will save shoppers an average of $90 a month or $1,000 a year.

The project is anticipated to cost $70 million for five stores across the boroughs, with $30 million slated to build a shop on an East Harlem vacant lot. A city-owned grocery store is planned for East Harlem at La Marqueta, scheduled to open in 2029. City-owned grocery stores are planned for Brooklyn, Queens, and Staten Island, but specific locations have not been disclosed.

Under the proposal, private grocery operators will manage the stores’ day-to-day operations, including staffing, merchandising, and product sourcing. The city sets pricing requirements and operating standards, provides the locations, and absorbs major occupancy costs for the municipal stores.

"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," Mamdani said. He framed the initiative as a response to rising costs. "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 said.

He also noted the scale of the existing market. "We’re also talking about delivering five city-run grocery stores in a city of 8.5 million people that has more than a thousand grocery stores," he said.

Mamdani stated that the city has subsidized groceries on Essex Street in Manhattan and Moore Street in Brooklyn. He argued that the subsidized markets on Essex Street and Moore Street have not had a negative effect on bodegas or grocery stores around them. A spokesperson for the New York City Economic Development Corporation disputed the suggestion that the municipal stores would hurt neighborhood grocers.

The agency said the administration expects the stores to generate additional foot traffic and ultimately benefit nearby businesses. The spokesperson stated that the administration is not currently considering any grant programs for existing grocers. However, the city is looking at the potential for tax abatement, incentives, and zoning benefits through existing city programs to alleviate cost pressures for small businesses. The agency cited the city’s FRESH program, which offers tax incentives and zoning benefits to qualifying grocery stores, as a specific assistance under consideration. It also cited the OPEN for Small Business initiative, a package of more than 50 reforms aimed at reducing fines, fees, and bureaucracy for small businesses.

Adam Lehodey, a policy analyst at the Manhattan Institute, criticized the financial structure of the plan. "The 30% savings that Mamdani announced on his government-owned stores are an illusion," Lehodey said. He argued that public funds would cover the operational gaps.

"Taxpayers will foot the bill for millions of dollars in subsidies, and they will operate on government-owned land with rents waived," Lehodey said. He added that "New Yorkers will still be paying the full price, just indirectly." He warned that pricing goods significantly below market price creates an additional problem of people purchasing them to resell elsewhere. He stated that shortages are also likely as people buy more than they otherwise would due to artificially low prices. E.J. Antoni, chief economist at the Heritage Foundation, analyzed the profit margins involved. "A 30% discount at stores with a 2% profit margin is simply a loss for taxpayers who will have to make up the difference," Antoni said. He added that these artificially low prices will also harm small businesses which will lose sales to taxpayer-subsidized grocery stores.

Why It Matters

The litigation brings together allegations of civil rights violations and questions of municipal legal authority regarding the operation of commercial enterprises. The Multicultural Business Coalition asserts that the plan threatens the livelihoods of immigrant- and minority-owned businesses that form a part of the city's retail infrastructure. The outcome will determine whether the city can proceed with its plan to subsidize grocery costs through direct municipal ownership and operation.

The dispute shows differing views on how to address food affordability and support small businesses. The city argues that the stores will provide relief during a cost of living crisis without harming existing retailers, pointing to previous subsidized markets as evidence. Critics and coalition members contend that the subsidies distort the market and impose costs on taxpayers while endangering independent grocers. The courts will need to address whether the city conducted sufficient analysis of the impact on small businesses and whether it possesses the legal authority to create these stores.

Timeline

On October 22, 2003, the Supreme Court of Rhode Island issued an order in In Re Court Order Dated October 22, 2003, with Justice Goldberg concurring in part and dissenting in part. In January 2025, Mayor Zohran Mamdani proposed introducing city-owned, subsidized grocery stores during his mayoral campaign. The Multicultural Business Coalition was formed in May 2026. Earlier in August 2026, a group of homeowners filed suit to stop the rollout of Mayor Mamdani’s pied-à-terre tax.

On the same day, he argued that the subsidized markets on Essex Street and Moore Street have not had a negative effect on bodegas or grocery stores around them. Also on August 24, 2026, Mayor Mamdani said, "We’re also talking about delivering five city-run grocery stores in a city of 8.5 million people that has more than a thousand grocery stores." The Multicultural Business Coalition filed two lawsuits against New York City Mayor Zohran Mamdani in New York State Supreme Court on Monday, August 24, 2026.

What's New

Additional reporting includes statements from critics and coalition leaders regarding the financial and social implications of the plan. Adam Lehodey stated, "The 30% savings that Mamdani announced on his government-owned stores are an illusion." Frank Garcia said, "I am proud to be following up in his tradition because what Mayor Mamdani is doing is disgracing his memory." Jairo Guzman added, "Mayor Mamdani needs to withdraw his disastrous plan and work with us to find different ways to bolster and sustain what so many NYC immigrants have created." E.J. Antoni noted, "A 30% discount at stores with a 2% profit margin is simply a loss for taxpayers who will have to make up the difference." Garcia also stated, "He established the first Latino Grocery Association to protect the rights of immigrant store owners." Antoni further commented, "These artificially low prices will also harm small businesses which will lose sales to taxpayer-subsidized grocery stores." Garcia recalled, "My grandfather opened up one of the first bodegas in the late 1960s when East Harlem was burning and the A&Ps and Waldbaums were leaving." Ken Roldan asserted, "Make no mistake about this plan. It is a direct assault on minority business by a mayor who claims to be a champion of disenfranchised poor and working-class New Yorkers."

How Sources Differ

Sources differ on the composition and representation of the Multicultural Business Coalition. New York State Supreme Court filings state that the coalition filed two lawsuits against Mayor Mamdani, while other reports indicate the coalition says it represents around 65 organizations in and around New York City. Organizational descriptions note the coalition is comprised of 50 chambers of commerce representing ethnically diverse businesses, whereas filings allege the plan violates the civil rights of smaller, immigrant- and minority-owned businesses.

Professional biographies identify Mark Jaffe as general counsel for the coalition and president of the Greater New York Chamber of Commerce, creating a distinction between the coalition's internal structure and its external legal representation. Reports on the coalition's reach vary, with some citing 65 organizations and others stating it represents hundreds of small supermarkets, bodegas, and grocery store owners.