(Illustration: Joel Kimmel)

In the marbled halls of a converted lobby in the Trump Building on Wall Street last week, a party was underway. Rihanna was blasting from turntables manned by D.J. Clue. A line of office workers waited for autographed photographs from baseball once-was Darryl Strawberry. Caterers in bow ties circulated trays of chicken skewers and stuffed peppers.

It almost could have been a nightclub, except that it was 11 a.m. and, in a corner, a woman presided over a table of free antifungal toenail spray samples. Despite the professional athlete and the music, this was a Duane Reade, the opening of the drug store chain’s new flagship store.

This store takes Duane Reade to previously unnecessary consumer heights: a search for contact lens solution took us past rows of gourmet chocolates and jars of chicken jalfrezi sauce, past the store’s “Look Boutique” with its shelves of antiwrinkle cream and touchscreen digital displays offering makeup consultation. Along with the refrigerated units filled with Chimay and sushi, and the station offering manicures, a hair salon offered blowouts nearby an entire room filled with perfumes. The pharmacy counter was in the corner in the back, an afterthought.

We ate a stuffed pepper from a tray, found and paid for our contact lens solution, and held out our hand out for free antifungal toenail spray and barbecue potato chips by Delish, Duane Reade’s in-house brand. Walking out the door, we were stopped one more time.

“Did you get your free gift?” asked a smiling woman. We shook our head no and dutifully put out our hand once again. “One hundred percent cotton panty liners,” she enthused. “You go, girl!”

Another day, another new Duane Reade.

Of late, the prospect of a single Walmart’s breaching New York City limits has sent local politicians into paroxysms of rage (at least those who have not received hefty donations from the company for pet projects). When the subject of Duane Reade is brought up, however, most local pols shrug. The similarities abound: ubiquity, megacorporate ownership, aggressive expansion and the drive to quash competition. Is there a difference?

Duane Reade is an inevitable retail experience for New Yorkers; a place to fill a birth control prescription when drunk at 3 a.m. on the Upper West Side or buy milk on a Sunday morning in Bedford-Stuyvesant. Universally experienced, it is less universally loved. To wit, the “I Hate Duane Reade” and “I’m Boycotting Duane Reade to Save Williamsburg” Facebook pages.

Mentioning the store at a party instantly provokes complaints about high prices (even candy has a mark-up over other stores), inattentive staff and locations with shelves half-stocked with none of the brands one wants. But despite the downsides, Duane Reade is inescapable. It is the largest drugstore chain in the city, with almost 60 more stores than Rite Aid and 138 more stores than CVS. Particularly in Manhattan, its logo is rarely absent from one’s peripheral vision.

The chain’s signs proclaim it to be “Uniquely New York since 1960.” True enough, but in the eyes of many New Yorkers, its proliferation symbolizes how New York has failed to maintain its uniqueness. And the beer bar installed when a new store opened in Williamsburg across the street from two independent pharmacies felt like an attempt to buy off the locals with a veneer of localism.

From 37 stores in 1992, Duane Reade has expanded to 257 today, and a company spokesperson confirmed that more stores will follow. It has been taken over by a private equity firm, gone public and then gone private again. Its former CEO, Anthony Cuti, and its former CFO, William Tennant, were convicted of falsely inflating the company’s financial performance. By 2006, its bond rating had been downgraded to “very weak.” With its heavy debt and tarnished reputation, Duane Reade might have been a victim of its own rapid expansion.

Then, in early 2010, Deerfield, Ill.-based Walgreens saw an easy way to capture a market where it previously had little penetration and gobbled up Duane Reade for $618 million in cash and $457 million in assumed debt. The “uniquely New York” chain is now part of the nation’s largest drugstore business, one whose fiscal year sales were $67 billion and that has 244,000 nonunion employees.

In its investor-relations materials, Walgreens boasts that 75 percent of Americans live within five miles of one of its stores. In New York City, it feels like at least 75 percent of us live within a block or two of a Duane Reade.

With a Duane Reade on every block, and with its diversification beyond mere pharmacy and into the realm of the bodega and small grocery, a few questions start to nag: the first, why is everybody so worried about Walmart? The second, is there another retail villain closer at hand? And, more important, will the Duane Reade-ization of New York City continue indefinitely?

The day after the boisterous opening of Duane Reade’s Wall Street megashopping emporium, a rally was taking place a few blocks away from the new store. New York state assemblywoman Inez Barron and union leader Rich Whalen stood outside the New York State comptroller’s office on Maiden Lane to announce their request for an audit of a controversial land deal: the purchase by the Related Group of what is the rumored future site of a Walmart in East New York. Protesters wearing “Wal-Mart Sucks” buttons mingled with union members and representatives of the Living Wage NYC campaign.

The difference, said City Councilman Charles Barron of East New York after the rally, is that when Duane Reade moves into a neighborhood, it’s “not going to create any competition, it’s not going to create any loss of jobs. It’s not big enough. It’s not powerful enough; they don’t have it like that.” It’s also not cheap enough.

Walmart, he went on to say, deals with sweat shops, hires only part-time workers and pays between $7.53 and $8.53 an hour. It also does not use local distributors. “Walmart is a rotating plantation looking for slaves to pay some low wages and continue to exploit communities to maximize its profits,” said Mr. Barron.

In many ways, Duane Reade is not comparable to Walmart. You can’t buy a BMX bike at Duane Reade, or a deck umbrella, or the latest Nora Roberts novel. Unlike Walmart, Duane Reade did not globalize retail. And aside from a short time seven years ago—when the now-convicted felon Anthony Cuti was running Duane Reade and tried to break the union—even labor has been on Duane Reade’s side.

“Duane Reade and Local 338 have a great working relationship; we’re prospering,” said Jack Caffey Jr., a union director. “Walmart is in its own league—they don’t respect their workers, they discriminate, they don’t pay their workers properly; but Duane Reade, they’re the definition of a company working with labor in place.”

The union got an employee, Juliette Richardson, who has worked at Duane Reade for 22 years, on the phone. “During the struggle when the former CEO Cuti did not want to renew our contract, that was a struggle,” she said. But once their contract was renegotiated, well, she said, “there has been a lot of improvements.” Walgreens does not have unionized employees, but the local New York union thinks that as long as Duane Reade remains a somewhat independent entity, its contract will be renewed when negotiations begin next year.

Duane Reade was started in 1960 by Abraham, Eli and Jack Cohen. The name came from the two streets in lower Manhattan that bordered its first warehouse, now represented as an intersection in publicity materials (“Yes, we know they don’t intersect … it makes for a better picture!” says a parenthetical qualifier on the company website). In 1992, the family sold the company for a reported $230 million, in a highly leveraged buyout to Mitt Romney’s Bain Capital. According to an article in the New York Post, the chain had 37 stores at the time.

In 1996, Bain hired Cuti, the former president of Pathmark, shortly before it sold Duane Reade, reportedly for $350 million, to another buyout firm, DLJ Merchant Banking Partners, which took the company public in 1998. With the profits from the I.P.O., Mr. Cuti took over other New York City drug store chains—Love’s, Rock Bottom, Value Drug—and passed the hundred store mark.

In 2000, according to federal prosecutors, he started cooking the books, making the company more attractive to buyers and misrepresenting company finances when it went private again, purchased by Oak Hill Capital Partners for $750 million in 2004. Oak Hill fired Mr. Cuti a year later and redesigned the company logo, changing its color scheme from blue and red to lilac and black. It also set about remodeling stores, widening aisles, improving the lighting and adding levity to the once-oppressive Duane Reade atmosphere. The effect was to make the store feel more like drug stores in the suburbs.

Under Walgreens’s watch, Duane Reade has continued both its expansion and its remodeling. The store that opened on Wall Street is exemplary of the company’s new look, and its forays into luxury brands echo the layout of stores like Sephora and, strangely, New York’s independent drug stores, which set themselves apart by stocking posh cosmetics, soaps from Europe, specialty toothbrushes and other high-end items.

“The way insurance works these days it’s almost impossible to stay in business as an independent pharmacy,” said Ian Ginsberg, who owns C.O. Bigelow, a pharmacy that has been in Greenwich Village for 173 years and in Mr. Ginsberg’s family since the 1930s. He said that pharmacies all over New York City have had to increase their retail offerings to survive. But, he added, “the chains feel the same pain, which is why they’re in the food business. You look at the assortment there—frozen food, packaged food, dog foods—they can’t survive just being a pharmacist either.”

He said the chains have been around since he entered the business in the 1980s—there’s a Duane Reade down the street, he added (there’s always a Duane Reade down the street)—and that he does not worry about it too much. “Chains, no matter whether its Walmart or Duane Reade, they’re in the empty-box business,” he said. “I don’t think the experience matches the advertising.”

And independent pharmacies are not just the legacy of an older Manhattan. Chris Tsioros, an owner of Bridge Apothecary in Dumbo, opened his store four years ago. “I’ve always worked for an independent. I’ve never worked for a chain because there’s no service,” he said. “Nobody gives a damn when you go into a chain.”

Nevertheless, the chains dominate, and will likely continue to do so. Just last week, Crain’s New York Business pointed out an ingenious way that Walmart could infiltrate the New York market: buy Rite Aid.

ewitt@observer.com

Barbaro, who the Times hired from the Washington Post, had his telephone bugged by Wal-Mart after he demonstrated a knack for breaking news about them.

The move to City Hall isn't official yet -- a formal announcement should be made shortly.

There will be an opening at the desk when City Hall bureau chief Diane Cardwell leaves in September to study at Stanford.

It's a major boon for Bloomberg, who has faced obstacles getting government agencies to record and share similar information, thanks in part to opposition from the N.RA. and nation’s gun lobby.

Wal-Mart, which according to this site, no longer stocks handguns, may have good reason for teaming up with the pro-business New York mayor. The company has been unable to find a way to open an outpost in the five boroughs. Despite several aborted attempts, they're still trying.

“Shareholders need full and complete disclosure of companies’ political expenditures to fully evaluate the political uses of the corporate assets,” Bill Thompson said in a public statement.

The companies targeted include Halliburton, Wal-Mart, Entergy and Charles Schwab.

More info over here.

[Crain's]

[NY Sun]

[NY Sun]

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[NY Sun]

[NY Sun]

[NY Sun]

[NY Sun]

[NY Post]

[NY Post]

[NY Times]

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Did we miss any New York City real estate news this morning? Please send along tips and links.

But muddle-headed thinking is never so irritating as when it’s deployed on behalf of a cause to which one is sympathetic.

The book consists of 14 pieces by academics, writers, artists and New Yorkers. A few are smart, fact-based essays that tackle a particular aspect of the city’s transformation, such as the loss of industrial jobs; a couple more are light nostalgia pieces, describing, say, the slow decline of the Lower East Side garment district. The rest are emotional rants that collapse the thorny issues embedded in gentrification and concomitant suburbanization into a simple dichotomy between good and evil.

Good is represented by artists, activists and poor people (so long as they don’t like to shop at Wal-Mart and other low-cost, big-box retailers), and evil comes in the guise of real-estate developers, the vaguely ominous-sounding “global capital” and, naturally, Rudy Giuliani. Oh, and don’t let me forget “identically styled college girls and boys with Gap clothes and perfectly blonded [sic] hair.” (No cliché is too clichéd to find a home in these pages.)

Take contributor Maggie Wrigley, described as a writer, photographer and artist, who strings three sentences together in a paragraph. The first recalls Amadou Diallo, the African immigrant who was shot 41 times by police officers in 1999. The second tells of Timothy Stansbury, a teenager who was killed by a police officer in 2004. The third and final sentence? “My friend’s landlord went to jail in 1998 for hiring a hitman to kill her neighbor living in a rent-controlled apartment.”

What connects the first two sentences to the third? Nothing but a hysterical sense that police brutality, greed and murderousness are subsets of the same larger evil that has beset the city, and that is physically manifested in the Starbucks on the corner.

Would that it were so, and the issue of gentrification were as black-and-white as the contemptuous photographs of tourists, shoppers and chain stores that illustrate this volume. In reality, the problem of gentrification is far from simple, but is rather the surprisingly tart fruit of something for which liberals once yearned: the reversal of middle-class urban flight and dwindling tax rolls.

Who would have guessed, in 1990, when Time magazine ran a cover story entitled, “The Rotting of the Big Apple,” that today New York would be the safest big city in the country? Most New Yorkers would probably say that’s a good thing. (In contrast, contributors Neil Smith and Deborah Cowen rather mindlessly see crime reduction as part of the problem—emblematic of “the suburban fetish for safety.” Tell that to the families of the 2,262 people—largely non-white—who were murdered in 1990, compared to 596 last year.)

Of course, even those urbanites who appreciate the drop in crime realize that it’s come at a cost. Increased safety has made the city a more desirable place for many people, and that in turn has made it more expensive. Higher property values, great for owners, aren’t so great for renters, both residential and commercial.

The latter has given deep-pocketed national retailers a leg up over local businesses in the bid for space. To deny the adverse consequences of the city’s newfound prosperity is to have one’s head as deeply in the sand as those for whom safe streets appeal only to white-bread folks in split-levels.

Certainly, some policies aimed at promoting development cater to chains at the expense of other businesses, and that’s worth exploring, as a few of the book’s more incisive contributors do, particularly Columbia anthropology professor Robin D.G. Kelley, who writes thoughtfully about gentrification in Harlem. He notes that when African-Americans move into white neighborhoods, whites fear that property values will drop, but the reverse is true when whites move into black neighborhoods. “It’s funny how we never call this process integration; instead, we use the presumably race-neutral ‘gentrification,’” he writes.

This observation gets to the heart of what makes this issue so very perplexing; it’s the problem of unanticipated consequences again. In a very real sense, gentrification is integration—that is, what was envisioned by liberals in the 1960’s and 1970’s. Back then, the idea was that mixed-income, multi-racial neighborhoods would mean poorer residents would gain access to amenities that had been traditionally reserved for the middle classes. Well, that’s actually happened; here we’ve got these amenity-laden, mixed-income neighborhoods aplenty, but, as we’ve learned, this has brought its own set of problems.

Mr. Kelley’s piece, which looks soberly at both the positives and the negatives, stands out amid so much fuzzy thinking—if, indeed, “thinking” isn’t too generous a characterization for some of these diatribes.

One contributor, decrying the upscale gaucheness of the Time Warner Center, writes that, “the violent feng shui of the AOL [sic] twins fairly taunts passing jetliners to make their day. These $2-billion babies won’t just kill planes, they’ll castrate ’em.” What!?

You certainly don’t have to be a fan of the Time Warner Center to wonder what this guy is on.

Adelle Waldman is a writer living in Manhattan.

And maybe he could. But more so than a Sandy Lindenbaum or Ross Moskowitz?

The 10-month-old newspaper is about to come out with "The Land Use Power List: 10 People Who Can Make Sure Your Project Gets Built--or Stop It." Mr. Fisher was on an early version of the list that The Real Estate obtained. The others, with The Real Estate's annotations, are below:

Dan Doctoroff (a shoo-in)
Amanda Burden (of course)
Melinda Katz (if you are Wal-Mart)
Robert Tierney (unless you are Tom Wolfe)
Avi Schick (maybe in five months)
Joshua J. Sirefman (maybe five months ago)
Joe Bruno (so long as he stays in office)
Eliot Spitzer (time will tell)
Sheldon Silver (if your project involves or competes with Madison Square Garden in any way whatsoever, then yes)

Manhattan Media President Tom Allon and City Hall Editor Edward-Isaac Dovere told The Real Estate that the list above is already out of date and will likely change before it is published March 12. Mr. Sirefman--who left the Economic Development Corporation in January--has been cut. Mr. Fisher, a real estate lawyer and lobbyist, may or may not be.

City Hall is still taking suggestions, so feel free to write them in below. You could even nominate yourself and no one would know. Hey, it's the blogosphere!

- Matthew Schuerman

After all the banter denouncing "poverty-wage jobs" died down around 1:48 p.m., some fired-up protesters blew off steam by dancing to Outkast's 2003 smash-hit "Hey Ya!" which blared over the activists' PA system amid appropriately "ice cold" temperatures.

The crowd had gathered outside Washington Mutual Bank in Brooklyn's Albee Square on Thursday afternoon to protest the world's largest "gender-biased" retailer's rumored interest in coming to the location.

"Grand Opening" signs at Jay Jewelers and M&M Beauty Supply seemed rather ironic on this day, given the clouds of doom hanging over storefronts across the whole retail complex.

Wal-Mart or not, bulldozers are headed to the outdoor mall site, which sold for a whopping $125 million this week, to make way for a "high-rise housing, retail and office complex," according to Thursday's NY Post.

At least one retailer is already moving out. Music Factory on Fulton Street was advertising "over one million dollars in inventory" available at huge liquidation-sale discounts, though a manager there suggested the shop's closing next week had more to do with the general downturn in CD-store business.

And he said he hadn't even heard about the mall's forthcoming destruction.

-- Chris Shott

Local Wal-Mart-resistance forces will gather in Albee Square next week to protest the world's largest retailer's apparent plans to "destroy everything that Brooklyn stands for."

That's according to Thursday's letter from the group Wal-Mart Free NYC, which includes a statement from staunch anti-smiley-face-logo activist and graffiti-artist-turned-shopkeeper Leo Gulfam:

The rally is scheduled for Thursday, Feb. 8, at 1 p.m.

More anti-chain-store rhetoric after the jump.

- Chris Shott

Dear WMFNYC Members,

As you have all read and heard about, Wal-Mart continues to have an enormous interest in Brooklyn. It's not even a question of if Wal-Mart will do damage to the community and the local business owners throughout the borough, the the question is How much damage will they do to Brooklyn. They will destroy everything that Brooklyn stands for or listen to what one Brooklyn resident had to say:

"People come here on tour buses when they want to see what real New York is like," said Leo Gulfam, a former graffiti artist who rents a storefront where he customizes clothing, jewelry and Air Jordan sneakers with everything from Pakistani flags to pictures of Tweedy Bird.
"Our people are crazy about bling," he said. "They aren't crazy about Wal-Mart."

We're holding a rally on February 8th at 1 PM at Albee Square (the site of the potential Wal-Mart) We strongly encourage all of you to come and show Wal-Mart that they are not welcome in Brooklyn or our city...Head to our blog (www.nywalmart.blogspot.com) to view the flyers we've been distributing... Thanks a lot for all the support we have been getting, We hope to see you all there

Please join Walmartfreenyc,the U.F.C.W, Change To Win, the NYC CLC, Brooklyn City Council members and Community groups to tell Wal-Mart they are not welcome in downtown Brooklyn or in any Borough of New York City. We will join together on Thursday, February 8, 2007 at 1 PM at "The Gallery at Fulton Street"....Allbee Square.

For additional information contact Ed Lynch at edwinelynch@aol.com or 646-280-8377