By JOSEPH DE AVILA
The online grocer FreshDirect has decided to remain in the city, announcing Tuesday that it plans to move its headquarters and 2,000 employees to the South Bronx from Long Island City.
The company had been weighing a relocation to New Jersey, which offered about $100 million in tax breaks and other subsidies. New York countered by offering FreshDirect up to $127.8 million in subsidies to build a 500,000-square-foot headquarters. It was the latest tug-of-war in an increasingly competitive battle between the states.
With the additional space, FreshDirect said it can add 1,000 new employees and expand its operations in New Jersey, Connecticut and Philadelphia. The new facility will cost about $112.6 million and could open in 2015, FreshDirect said.
The company’s decision was first reported by the New York Daily News.
While New York won this latest fight with New Jersey, some question whether such battles will result in meaningful, long-term employment gains for the tri-state region.
“It’s easier to steal jobs from your next-door neighbors, but the benefits are much less,” said Timothy Bartik, senior economist with the W.E. Upjohn Institute for Employment Research, a think tank.
Kathryn Wylde, president of the pro-business group Partnership for New York City, agreed that the regional competition ends up hurting the tri-state metro area. “We basically have been very successful in growing our own companies in our own industries and the region has benefited,” she said. Relocating jobs within the region is “not going to represent long-term economic growth for any us.”
Some critics of the FreshDirect deal questioned the timing of the announcement—before $83.5 million of city tax breaks and other incentives have been approved.
“It doesn’t give us a lot of faith that these tax dollars are being invested wisely,” said Bettina Damiani, project director at Good Jobs New York, a nonprofit that monitors economic development projects in the city.
In a statement, city officials said the $83.5 million was contingent on the deal’s approval. The New York City Industrial Development Agency, which oversees much of the city’s subsidy program for economic development, will vote on that portion of funds on Tuesday.
Write to Joseph De Avila at [email protected]
