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FreshDirect's Bronx Move Hits Snag as Congressman Opposes $3.5M Subsidy

By Alice Speri | December 20, 2013 12:28pm
 FreshDirect wants to relocate to the South Bronx in the face of opposition. 
FreshDirect wants to relocate to the South Bronx in the face of opposition. 
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DNAinfo/Julie Shapiro

THE BRONX — FreshDirect’s proposal to relocate to the South Bronx hit a setback this week, after Rep. Jose Serrano announced his opposition to the company’s request for $3.5 million in public subsidies for the move.

Securing the funding would require the unanimous approval of the New York Empowerment Zone Board, which provides incentives for private investors revitalizing poor communities. FreshDirect removed its application for funding from the board’s agenda after Serrano made clear Wednesday that he would vote against it.

“I, along with several other elected officials and many community residents, have had deep misgivings about this project because of its impact on the health of Bronx residents,” the Bronx congressman said in a statement following the board meeting. “My understanding is that this project was removed from the agenda in light of my concerns.”

FreshDirect was slated to receive a much heftier package in public subsidies and tax breaks, including from state and city sources.

“Fresh Direct has already received more than $100 million in government subsidies, and when the project was announced, everyone was told that this was sufficient,” Serrano said in his statement. “I cannot understand why further government subsidies are now needed.”

It was not immediately clear how the congressman’s opposition would impact the Queens-based online grocer's plan to move its operations to the waterfront site in Port Morris, but a FreshDirect spokesman said the company’s plans have not changed.

“FreshDirect has not yet had a chance to meet with all of the board members but we look forward to briefing them on this project,” the spokesman said in a statement. “We are continuing to move forward with plans to create 1,000 new jobs in the nation’s poorest congressional district and generate even more tax revenue for New York.”

On Thursday, the company partnered with Bronx-based food pantry Give Them To Eat to host a holiday dinner for local residents. “We’re proud to work with these local organizations and look forward to continuing to do so as a member of the community,” FreshDirect CEO Jason Ackerman said in a statement.

But community members, who have opposed FreshDirect’s move to The Bronx for months, said the company has no interest in improving the lives of local residents and hailed Serrano’s rejection as a victory.

“What happened yesterday is an example that the more information people receive about this project, the more questions they ask,” said Mychal Johnson, a member of South Bronx Unite, the group that has spearheaded local efforts to stop FreshDirect’s move. “Congressman Serrano’s advocacy yesterday was overwhelmingly needed; what he did really brought back a lot of faith in our system.”

South Bronx Unite has criticized the proposed subsidy package as a taxpayer giveaway to a company that they say would bring traffic and pollution to the neighborhood.

The group filed a lawsuit against the company last June, claiming that the project was ineligible for certain subsidies it had been offered and that FreshDirect did not properly analyze the potential impact of the planned 500,000-square-foot distribution center. The company cannot move forward with the project while the lawsuit is pending.

Opponents also hope Serrano’s opposition might be the first of more to come — as FreshDirect still needs to secure additional approvals, including support for public funding and zoning overrides for its planned construction.

“FreshDirect got a very powerful message yesterday that they are not to consider themselves welcome in the South Bronx,” said Christina Giorgio, an attorney at New York Lawyers for the Public Interest, which represents community members in the lawsuit. “The money is meant for employers that are going to benefit the community rather than burden the community like FreshDirect will.”

FreshDirect has tried to ease critics’ concerns by touting its green initiatives and detailing potential benefits for The Bronx, such as easier access to healthy food and new jobs. But critics said those jobs — mostly low-wage and non-unionized — would only reinforce the cycle of poverty in the neighborhood.

Mayor-elect Bill de Blasio has criticized the proposed subsidies for FreshDirect as a “mistake” and opponents hope action by Serrano and other public officials will put the rest of the benefits package up for reevaluation.

“They are trying to rush this approval through before the New Year,” Johnson said. “We’re saying, hold off on giving them any agreement or subsidy until the new mayor-elect comes in. Slow down, let’s look at how this project affects our community.”