Earlier this month, Dan Katz, part owner of the Foodtown supermarket in Norwood that burned down in a horrific fire in late December, gushed to members of Community Board 7 about how much bigger and better the replacement store will be once it’s completed.

“I’m telling you, you’re going to love it,” Katz said after enumerating the store’s new features. “This is a monumental project.”

With funding help from a new city initiative, the Katz family is building a brand new supermarket that will be 35 percent bigger and increase the number of employees from 40 to 65.

It will offer more produce options, an increase in variety and organic products, wider aisles, three more checkout lanes, and a brand new seafood section, Katz said.

Sounds like a good deal for a community that is still struggling to regain its footing after two recent fires — one on Bainbridge Avenue, the other on East 204th Street, where Foodtown was located — wiped out 13 businesses (see story, page 5) and left residents without a local supermarket.

But some longtime residents say the Katz family caused the neighborhood’s supermarket void in the first place by chasing away competitors and is now soaking up valuable taxpayer funding as a result.

In its defense, the Katz family says it’s simply running a business in a tough industry with razor-thin profit margins and would be foolish not to take advantage of programs like the city’s FRESH initiative.

The city created the FRESH (Food Retail Expansion to Support Health) program last summer to “make it more advantageous to open new stores and upgrade existing stores so that New Yorkers in underserved neighborhoods can put healthy food on the table for their families,” Mayor Michael Bloomberg said in statement announcing the program.

Foodtown is one of the first two supermarkets to reap the program’s benefits, which, over the course of several years, will amount to about $3 million in real estate and other tax breaks, which were approved last month by the city’s Industrial Development Agency (IDA). Foodtown will invest $3.7 million of its own money to build the new 11,000-square-foot store. 

After the Dec. 21 fire, Dan Katz said their landlord agreed to allow them to expand to take over the space occupied by the burned-out commercial building’s two other occupants — a dentist’s office and a diner. (The owner of the diner was charged with arson in connection with the fire. He has pleaded “not guilty” and is awaiting trial.)

The Katzes were eligible to receive the tax breaks because all of Community Board 7, which includes Norwood, Bedford Park, North Fordham and University Heights, was deemed “underserved” in terms of access to fresh foods and vegetables.

Fernando Tirado, the district manager of Community Board 7, wouldn’t comment about the tax breaks, but said, “I know that it’s badly needed by the community because I continue to receive complaints and inquiries, especially from seniors, about their problems accessing supermarkets and fresh food.”  

Elda Bertagna, who moved into the neighborhood near East 204th Street in 1953, is incensed about the tax breaks. “Are you kidding me? [The Katzes] have to be billionaires by now,” she said.

She remembers a time when there were half a dozen grocery stores in the area. There’s a reason why Foodtown was the only one standing until it burned down, she said.

“[The Katzes] were instrumental in getting us to this point [of being without a supermarket],” said Laura Filacchione, who said there were at least five or six grocery stores in the area when she moved here 40 years ago.

Over the years, the Katzes have bought up the leases or property of at least three supermarkets nearby. The spaces were converted into two discount stores and what is now a CVS. In 1997, the Katzes bought a Bedford Park C-Town supermarket and then closed it down. Two years later, after intense community protests, they reopened it as a Foodtown. (They have since sold that store and it’s now a C-Town again.)

At the community board meeting, Katz was reluctant to discuss the family’s reputation for icing out the competition, but offered no apologies and said they were simply doing their best to survive in a cutthroat industry.

He added that the company has done its best to serve the community and be a good neighbor. After the fire, they offered jobs to all of Foodtown’s 40 displaced employees and has tried to meet the neighborhood’s needs by offering online shopping and delivery services.

In the end, regardless of how it gets built, Filacchione said, “We absolutely need our supermarket.”