Pepsi challenge to New York: Keeping its sign on East River.

Will New Yorkers kowtow to the Pepsi challenge by letting its bottler leave "PepsiCola" in lights along the East River forever? That's what Queens Community Board 2 wants to know.

While Pepsico Bottling is marketing its 19 acres of prime, East River land to residential developers, it is telling them they must keep the company's logo signage.

Since the Pepsico land has long been identified as an urban renewal site as part of the Queens West development plan, Community Board 2's president, Joseph Conley, doesn't think the corporate billboard should become a landmark forever. To date, it is not an official city Landmark.

"The community is saying this whole project was put together under an urban renewal plan, and what does that have to do with preserving a commercial sign? It's the most absurd thing we've ever heard," added Conley.

Rather than condeming the land outright and entering into a long fight over its value, Queens West is currently permitting Pepsico to market the property themselves, and reach an agreement on dollars with a developer.

Those dollars could include a discount on the value of the signage as a billboard, because in most instances, it's the company that pays the developer to have its product's name in lights, rather than the other way around. Any developer would also have to work out a maintenance agreement so the sign doesn't become "e Cola."

"It's a sprawling industrial building with that familiar red-neon Pepsi sign, and the sign may eventually be incorporated into the new site," said Marjorie Seaman, a principal of Seaman Realty & Management Company, who handles commercial industrial properties in the area.

Pepsico officials did not return calls for comment on the site but they are known to be shopping it to a slew of residential developers such as Related, Resnick, Rockrose, Rosen/Fuchs/Davis and Time Equities.

Carolyn C. Bachan president and CEO of Queens West, is just happy to have the development go forward. "The Governor is very committed to cleaning up the rivers, and it make it accessible," she said.

Some areas of Queens West are also brownfields. "It's another big hurdle to development and it falls on government to a large degree to deliver a clean site or make a deal such so that the developer can afford to clean it up," she explained.

Where redevelopment sites in other places have "bad acids and heavy metals" the Federal government's money is needed.

"Pepsi used to be a Standard Oil site, but petrochemicals are fairly easy to remediate," said Bachan.