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New York City’s FreshDirect Deal – Just Doesn’t Go Far Enough

Posted Feb 24 2012 12:00am
A Bad Deal from the Start
On February 7th, Mayor Bloomberg, Governor Cuomo, and Bronx Borough President Diaz announced a deal that provides FreshDirect with $127.8 million in taxpayer money to subsidize a relocation of FreshDirect’s headquarters from Long Island City to the Harlem Rail Yard on the South Bronx waterfront.  Two days later, the NYC Industrial Development Agency (IDA) held a hearing on the FreshDirect deal to give provide community members with an opportunity to voice their opinions before the deal was sealed.   South Bronx residents have real concerns about the impact of the FreshDirect deal on the environment, promised job creation, living wages, acceptance of EBT (food stamps), and the inaccessibility of FreshDirect services to South Bronx residents.  Residents came together under the title of “South Bronx Unite: Stop FreshDirect” to speak out against the deal.  South Bronx Unite members have created quite a buzz within the city, raising awareness about the city’s failure to provide community members with a real opportunity to voice their opinions before the deal was decided upon.  South Bronx Unite members have created social media outlets ( blog , facebook and twitter ) to get the word out about their disapproval of the FreshDirect deal.  There has even been a Change.org petition created to stop FreshDirect from building its new headquarters in the South Bronx. 
The opposition to the FreshDirect deal has been covered in media outlets all over the city, from El Diario to the New York Times .  New York City Council member Melissa Mark-Viverito and NYC Comptroller John Liu have both publicly expressed their disapproval of the FreshDirect.  Despite the opposition to the deal, the IDA held its board meeting on February 14th – which was attended by members of South Bronx Unite – and the FreshDirect subsidy deal was voted on in the affirmative by all parties present except Comptroller Liu.  South Bronx Unite members are demanding to see the Environmental Impact Assessment conducted on the Harlem Rail Yards; for the City Council to demand oversight hearings of the NYC Economic Development Corporation; and for NYS Attorney General Eric Schneiderman to audit the Harlem River Rail Yards deal.  South Bronx Unite members would also like to see Bronx Borough President Ruben Diaz hold a public meeting where all South Bronx residents would be invited to express their concerns. 
These concerns are real ones, too. While the Bronx Borough President put together a Memorandum of Understanding to try and address the concerns of South Bronx residents, the MOU is non-binding and does not adequately address the concerns: ·    Lack of democracy: Since the very beginning, there was a lack of a true democratic process that would provide community members with enough time to express their opinions before the decision was made.  ·    Environmental Impact:  There has not been an adequate environmental impact assessment conducted on the site, nor has any environmental impact analysis been provided to members of South Bronx Unite.  The promise of using a small number of alternative fuel vehicles doesn’t adequately address the concerns of having an additional 130 trucks per day on the road in the South Bronx – already home to highest asthma rates in the country – nor the increased truck emissions that would come from the removal of more than 380 tons of solid waste per month. ·    Job creation:  FreshDirect is promising that almost 1000 jobs will be created over the next 10 years, which may sound like good news to Bronx county with some of the highest poverty rates in the nation.  But there are no written guarantees to ensure that a certain number of these jobs will be provided to South Bronx residents.  Further, past recipients of IDA subsidies have not have a good track record of holding true to promised job creation:  ALIGN – the Alliance for a Greater New York – has reviewed the State Comptroller’s data and found that for the NYC IDA: “Only eight of the 23 IDA subsidized projects that ended in 2009 met or exceeded their job creation promises.”  In addition, the amount of money being provided through the subsidy deal is out of proportion compared to the amount of money given for job creation in previous deals. According to Comptroller John C. Liu’s office , “A few months ago, the EDC attracted a world-class university by promising $100 million in capital for a project that by their own estimate will generate 30,000 jobs. Now the EDC is giving close to $100 million to create 962 jobs.  The cost to the City is $93,000 for each new job.”  ·    Living Wages: While nearly 40% of current FreshDirect employees make less than $25,000/year, FreshDirect would be exempted from any local living wage mandates adopted by the city.   According to the New York Times – City Room , “As it stands, the city will pour about $130 million into a modestly profitable company over a decade without requiring that it pay more than $9 an hour to workers who labor in frigid warehouses hauling 50-pound boxes. The workers get less than two weeks off a year, and that includes sick, personal and vacation days.” ·    Labor Practices:  As described in South Bronx Unite’s message to the NYS Attorney General, NYC Comptroller, Bronx Borough President, NYC Economic Development Corporation, Empire State Development, and NYS Energy Research and Development Authority: “Numerous complaints have been filed with city, state and federal agencies regarding FreshDirect’s labor practices, including 27 discrimination and nine unfair labor claims against FreshDirect in the last four years alone.  The description of wages and employment in FreshDirect’s NYCIDA application fails to provide taxpayers with enough information to gauge the quality of jobs, including with respect to salary or how many jobs are part-time or full-time.”   ·    Acceptance of EBT: As pointed out by Joel Berg of the NYC Coalition Against Hunger, the MOU does not identify FreshDirect as officially agreeing to accept food stamps: “Fresh Direct previously sought to accept food stamps, had been prevented by doing do by "the State", and that Fresh Direct and the Bronx BP would work together to ‘continue these efforts’ to try to get accept food stamps through EBT.  Unfortunately, Fresh Direct's story that they were prevented from accepting food stamps by "the State" is likely untrue. Under federal law , only USDA, not any state, has the power to decide which retailers can or cannot accept food stamps.” ·    Servicing the South Bronx:   FreshDirect has never and currently does not serve the South Bronx – only the wealthier areas of the Bronx such as Riverdale.  FreshDirect has only discussed expanding to “new Bronx neighborhoods.”  The Bronx Borough President’s office created a facebook page to “illustrate to the company just how many Bronx residents are willing to not only use their service, but have the technical capabilities to do so.” (FreshDirect is an entirely online grocery ordering and delivery system. As the Bronx includes one of the poorest Congressional districts in the nation, many residents do not have readily available Internet access.)  So far, the Borough President’s facebook page has accumulated more opposition than support for the FreshDirect deal.  So has a Crain’s poll . ·    Misuse of public land: As described by South Bronx Unite, “The proposed site at the Harlem River Yards in The Bronx is owned by New York State Department of Transportation and has been leased for 99 years to Harlem River Yard Ventures II (HRYV), which is 95% owned by the Galesi Group.  The purpose of the Harlem River Yards project (together with its partner project, the Oak Point Link) was to reduce air pollution by decreasing truck traffic and to help avoid $500 million in public road improvements through development of a Full Freight Access Program, which has not been developed in the more than 20 years that HRYV has held the lease.  Instead, the Bronx community has had 1.9 miles of waterfront made inaccessible to the public.” ·    Greenway and Waterfront Access:  As described in South Bronx Unite’s message to the Borough President, “Harlem River Yards is essential to a Harlem River Greenway as a necessary Bronx West - East connection from High Bridge and the Harlem River Greenway to the South Bronx Greenway and Randall’s Island.  The New York City Economic Development Corporation (EDC) has been negotiating for some time with HRYV to create access to a pedestrian bridge, currently under construction, that will link the South Bronx Greenway to Randall’s Island and then to Queens and Manhattan (the “Connector”).  The Connector will provide a safe and legal means to cross an important waterway that unites the Bronx with the open space and green playing fields of Randall’s Island.  EDC is now granting more than $100 million in public subsidies to FreshDirect, some of which will be allocated to Harlem River Yards, when HRVY has so far refused to grant an easement to complete the vital Connector project through the Harlem River Yards.  Equitable land use, in accordance with the public trust doctrine, includes meaningful waterfront access and recreational opportunities in addition to the swift completion of the Connector.”  With all of these concerns, members of “South Bronx Unite” would prefer “a community-led development plan that makes efficient use of nearly 100 acres of public waterfront land and incorporates sustainable development, living wage jobs, clean air and waterfront access for South Bronx residents.”   A Better Solution As for improving access to healthy food, this is something that Paul Lipson, a former public servant for the South Bronx and founder of THE POINT , has been working on for a number of years.  Paul, who presented at Bronx Health REACH’s February 2012 Nutrition and Fitness Workgroup meeting, has developed a vision for a regional food campus at Oak Point in the South Bronx, that would provide access to “locally grown, locally raised, locally made” food for South Bronx residents and the larger NYC area.  According to Paul: A 2003 study gauged the unmet demand for local and regional agricultural products at upwards of $1 billion in the New York metropolitan areas.  This new 130,000 sq ft regional food hub would house GrowNYC’s Wholesale Farmers Market and would serve as a non-profit aggregator of growers so upstate and regional growers can have a space to access markets.  There would be an opportunity for store owners and community members to access produce directly. Co-located next to the largest wholesale grocery and restaurant supplier in the New York metro area, it would be convenient for middlemen and store and restaurant owners to do all their shopping in one location. The operation would include a “market within a market” allowing products to be sold directly to Jetro and Restaurant Depo, as well as bodegas, small to medium-sized grocery stores, and small (10-20 table) restaurants. There would be a kitchen on the second floor, which would create many jobs for artisanal food manufacturing.  There would be a wash and chop facility – something sorely needed in the city – which would allow everyone – from bodegas to institutions such as the NYC Department of Education Office of SchoolFood – to make more direct use of local produce. There would be a rooftop hydroponic greenhouse operation serving grocery and grocery delivery chains in the New York metro area; an agricultural cooperative aggregating over 60 regional growers and producers; a borough-based brewer of beers and ales (the Bronx Brewery currently brews in Connecticut); a Bronx-based caterer and institutional food service providing meals for charter schools and senior centers; and a produce distributor serving NY metro area. Moreover, there would be a lot saved on carbon emissions, fuel and transportation costs due to streamlining of operations and logistics. Individual farmers would not have to send their trucks to the city, but rather the Oak Point facility would send its trucks to them to pick up their produce and then deliver “tropicals” and other items available only in the city to them on the return trip.  Located on 9.6 waterfront acres, a ½ mile east of the Triborough Bridge and ½ west of the Hunts Point Food Distribution Center, there would be rail and deep water access, thus creating a means for a true regional food hub.  This whole project is dependent on subsidies – albeit, a tenth of the price of the subsidies the City is planning on giving to FreshDirect.  While it may not “promise” as many jobs as the FreshDirect deal, the jobs would provide workers with living wages, and the regional food campus would have many benefits and implication for public health, including air quality benefits, improvements to institutional food, etc.Paul Lipson is currently looking to connect with small food businesses and growers cooperatives that would like to share a food kitchen.  He is seeking support from the City Council and other elected officials to provide public subsidies for the project.  He can be reached at paul (at) barrettobay (dot) com
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