Fresh Direct Deal Blasted by South Bronx Residents and Activists

By Patrick Wall on February 9, 2012 6:45pm 

Rob Konrad, a critic of the Fresh Direct deal, holds up a sign at a public hearing Thursday.
Rob Konrad, a critic of the Fresh Direct deal, holds up a sign at a public hearing Thursday.
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DNAinfo/Patrick Wall

BRONX — Armed with jeers and a banner reading “Rotten Deal,” South Bronx residents and activists blasted a package of public incentives worth nearly $130 million designed to entice Fresh Direct, the online grocer, to move its operations from Queens to the Bronx.

Thursday's hearing came two days after city and state officials announced that Fresh Direct had rejected a similar offer from New Jersey in favor of New York’s subsidy package, part of which must still be approved by a city oversight board. In return, the company promised to create nearly 1,000 new jobs and invest $112.6 million to build a new headquarters at the Harlem River Yards in Port Morris.

At the meeting, proponents of the plan said the move would boost the economies of the city and the Bronx. But critics denounced the deal, which they said offered few rewards but real risks for the South Bronx, and had been arranged without residents’ input.

“It has been a steamrolling,” Corrine Kohut, an attorney from Mott Haven, said to members of the New York City Industrial Development Agency, which will vote on the city’s portion of the deal, which includes nearly $90 million in tax breaks, equipment, energy benefits and loans.

“I would ask you to put the brakes on this process,” Kohut said.

Several speakers questioned the quality of the jobs that Fresh Direct said it will create at its new 500,000-square foot facility in the South Bronx.

For instance, Fresh Direct pays 38 percent of its workers less than $25,000 a year, according to records it is required to file with the city, said Bettina Damiani, project director for Good Jobs New York.

Sandy Pope, president of the Teamsters Local 805 union, which has filed unfair labor practice complaints against the company, said Fresh Direct “terrorizes workers when they try to form a union.”

Other speakers pointed out that the company currently does not accept food stamps and only delivers its groceries and fresh produce to three northern Bronx zip codes — 10463, 10470, 10471 — which includes the affluent Riverdale section.

Members of the public who attended a public hearing on Thursday, Feb. 9, 2012 regarding a public benefits package for Fresh Direct.
Members of the public who attended a public hearing on Thursday, Feb. 9, 2012 regarding a public benefits package for Fresh Direct.
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DNAinfo/Patrick Wall

Meanwhile, the company’s fleet of 230 mostly diesel-powered delivery trucks would be stationed at the new facility in the South Bronx, which has some of the city’s highest rates of asthma.

“Why would this agency agree to provide tremendous subsidies to a project that increases truck traffic in an area with alarmingly high asthma rates?” Damiani asked.

At one point, a Fresh Direct executive took to the public podium to defend his company and the generous benefits package it is poised to receive.

Larry Hickey, the company’s senior vice president of business affairs and general counsel, said that 400 of the company’s nearly 2,000 existing jobs belong to Bronxites and that more would follow the move.

Marlene Cintron, president of the Bronx Overall Economic Development Corporation, added that Fresh Direct agreed to provide 90 jobs to residents of two zip codes that include Mott Haven and Port Morris in exchange for a $3 million loan and $500,000 grant from her office.

The average wage for hourly workers is about $12, not including benefits or tips, Hickey said, though starting pay for warehouse workers is $8.50 an hour. Benefits, which begin after six months, include subsidized health care, annual bonuses, paid lunch break and product discounts, he said.

Hickey said food stamps users are currently not permitted to make purchases online, but that Fresh Direct is working with the state government to change this. He added that the company’s current delivery zones are based on customer interest as measured by website visits, but that the company hopes to expand its service.

“We are committed to making sure our fresh food and produce is readily accessible to the Bronx community,” Hickey said.

He also said that the company plans to buy 10 new electric trucks from Smith Electric Vehicles and, within five years, to use only vehicles that run on green energy sources, such as electric or natural gas.

Hickey did not respond to comments about the company’s labor practices, and a Fresh Direct spokeswoman, Maria Coder, did not immediately respond to a request for comment. But Coder told the Daily News on Wednesday, “We strive to maintain compliance with all labor laws and regulations."

Several Fresh Direct workers praised the company at the hearing. Meanwhile, several Bronx residents and supporters heckled members of the Industrial Development Agency, who they predicted would "rubberstamp" the proposed benefits deal next week.

Larry Hickey, Fresh Direct's senior vice president of business affairs and general counsel, defended his company's practices and the incentives package.
Larry Hickey, Fresh Direct's senior vice president of business affairs and general counsel, defended his company's practices and the incentives package.
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DNAinfo/Patrick Wall

At one point, Richard Marshall, the agency's vice president of legal affairs, asked a man who had shouted out, "This is a shakedown!" to provide his name for the record.

The man, Rob Konrad, an electrician who is a member of various South Bronx community groups, replied, "Write, 'the 99 percent.'"  Later, as Konrad walked out during the meeting, he held up a sign that read, "No To Fresh Direct — Rotten Deal."

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