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FreshDirect Defends New Bronx Facility Against Legal Challenge

By Patrick Wall | March 4, 2013 7:54pm

BRONX SUPREME COURT — Lawyers for FreshDirect and several government agencies appeared in court Monday to defend the company’s plan to build a new base of operations in the South Bronx against a lawsuit filed by a group of residents determined to block it.

The online grocer announced its relocation plan, which is set to receive nearly $130 million in public subsidies, just over a year ago, but has had to suspend construction at the Port Morris site while the lawsuit, which was filed in June, is pending.

The lawsuit claims that the plan violates the site’s original lease, that the project was ineligible for certain subsidies it has been offered and that FreshDirect did not properly analyze the potential impact of the planned 500,000-square-foot distribution center and the truck traffic it will create.

The members of South Bronx Unite, the local group that filed the lawsuit, “are mothers and fathers worried about their own health, but more importantly, the health of their children,” said the group’s lawyer, Gavin Kearney, an attorney with New York Lawyers for the Public Interest.

The center's opponents say the facility would worsen already high rates of asthma in the area and close off local access to the waterfront.

If Bronx Supreme Court Justice Mary Ann Brigantti-Hughes sides with South Bronx Unite, FreshDirect may have to conduct a new environmental impact study and could lose some of its subsidies, Kearney said.

If the judge rules in favor of FreshDirect, the company can proceed with its planned move.

“We look forward to getting past this final hurdle so we can move forward with making the South Bronx our new home and creating 1,000 new jobs along the way,” FreshDirect CEO Jason Ackerman said in a statement.

In the lawsuit, residents claim FreshDirect downplayed the likely impact of its planned facility and truck routes on the surrounding neighborhood, which allowed the company to rely on a 1993 environmental impact analysis rather than conduct a thorough new one.

The lawsuit adds that the area around the site has changed dramatically on account of rezoning and an influx of new residents in the two decades since the old analysis was done.

The lawsuit’s second major claim is that the FreshDirect facility would interfere with the intended use of its waterfront site, a stretch of state-owned but privately controlled land called the Harlem River Yards.

A 1991 lease between the state and Harlem River Yard Ventures, the private company that runs the site, stipulated that part of the 96-acre industrial yard must be used as an intermodal rail hub that would reduce truck traffic and pollution.

A full transportation hub has yet to be built and, if FreshDirect moves in, one likely never will be, the lawsuit says.

The lawsuit’s other main charge is that FreshDirect is a direct-to-consumer retail company that should not have qualified for $19 million in tax credits through a state program intended for manufacturing, agricultural and other such firms.

“It seems like a public gift to a private company,” said Mychal Johnson, a Mott Haven resident and one of the petitioners. “Where is the public benefit from that land?”

In addition to FreshDirect, the lawsuit names several city and state agencies that were involved in the subsidy deal, as well as Harlem River Yard Ventures.

Lawyers for those groups have filed motions to dismiss the lawsuit’s claims regarding the Harlem River Yards lease and the state tax credits, mainly on technical grounds, which the judge will now consider.

An attorney for the city’s Industrial Development Agency, which approved $84 million in city subsidies for FreshDirect’s move, argued in court Monday that the agency complied with state law when evaluating the company’s environmental impact assessment.

In particular, because the 1,944 estimated daily vehicle trips that the FreshDirect project would generate do not meet a threshold that requires a new impact study, the city was right to permit FreshDirect to use the 1993 analysis, said IDA attorney Kathleen Schmid.

The respondents’ lawyers also argued that the FreshDirect facility would not affect future construction of an intermodal hub at the site. And they noted that some of the subsidies are tied to company actions, such as hiring some Bronx residents and developing a "green" truck fleet.

Six groups that are based or do business in The Bronx have filed an amicus brief on behalf of FreshDirect citing their desire for the new jobs, tax revenue and access to fresh food that the relocation would spur, according to a statement released by FreshDirect on Monday.

Over the past year, South Bronx Unite members have disrupted a FreshDirect subsidy hearing, led a boycott campaign, teamed up with grocers who oppose the subsidies and hosted a forum to propose alternative visions for the Harlem River Yards.

Before Monday’s hearing, about a dozen FreshDirect opponents huddled outside the courthouse, where they hoisted a “Stop FreshDirect” banner and joined in a group prayer.

“Anytime we come together to fight against injustice,” said Johnson, one of the petitioners, “we’ve already won.”