Republican gubernatorial candidate Bruce Blakeman aims to use a little-known clause in the state Constitution to try squashing NYC Mayor Zohran Mamdani’s taxpayer-funded, $70 million city-owned grocery store scheme.
The “Gift and Loan Clause” prohibits municipalities from giving and lending public money or property to private entities.
“This unconstitutional subsidy poses a direct threat to long-standing, tax-paying businesses, risking widespread closures and job losses within the community,” Blakeman told The Post.
The 150-year-old law — which was created to stop local governments from diverting public funds to private railroad companies and other favored individuals and entities — also mandates municipal funds be used for a public purpose or benefit.
Mamdani’s plan to open a city-owned supermarket in each of the five boroughs, run by select private companies, violates the law because it undermines other private-market competitors by using public funds to keep prices down, the Nassau County executive contends.
“Local independent supermarkets and bodegas, which operate on razor-thin margins, cannot compete with a government-backed entity that faces zero overhead costs,” said Blakeman, who trails Gov. Kathy Hochul by 6 points in the latest gubernatorial race polls
Hochul, who endorsed Mamdani for mayor, has expressed indirect criticism of the HIzzoner’s plan, telling business leaders at an August 2025 breakfast in the Hamptons: “I favor free enterprise.” Since then, she has not made any public comments on the plan.
Any legal challenge to Mamdani’s Soviet-style supermarket plan would likely end up in court, as it is not certain it meets the clause’s public benefit standard.
The mayor would likely contend that lowering grocery costs for New Yorkers qualifies, legal experts say. Blakeman argues the opposite — that publicly run stores would drive out competition, eliminate jobs and shrink consumer choices.
James M. McGuire, a former state appellate judge and chief counsel to Republican ex-Gov. George Pataki, said Blakeman “may have a difficult time” having his argument hold up to any legal challenges based on “precedents” set by the state Court of Appeals.
Gristedes supermarket CEO John Catsimatidis said he’s unfamiliar with the Gift and Loan Clause, but he hopes “common sense prevails” and that Mamdani’s supermarket plan is spiked — no matter who wins the gubernatorial race.
The billionaire WABC-AM radio owner also said that if Mamdani is serious about driving down grocery costs he should simply subsidize grocers who buy milk, eggs and bread in bulk on the condition they pass the savings on to customers.
The Mayor’s Office didn’t return messages.
Blakeman called Mamdani’s plan “an incredibly expensive socialist pipe dream that forces local mom-and-pop shops — who already pay astronomical state taxes — to compete against a government monopoly subsidized by those very same tax dollars.”
“We are literally forcing neighborhood grocers to fund their own demise,” he continued. “New York runs on fiscal responsibility, free enterprise, and the grit of local entrepreneurs — not bottomless government spending on Soviet-style supermarkets.”
