FreshDirect, the fast-growing online grocer whose expansion
plans sparked a border war between New York and New Jersey, isn’t
checking out of New York City, but it will be leaving Long Island
City, which it has called home since 1999.
Gov. Cuomo and Mayor Bloomberg announced Tuesday that the
grocer, which has outgrown the Queens headquarters, will move into
a 500,000-square-foot facility in Harlem River Yards in the
Bronx.
To enable FreshDirect’s expansion, state, city and Bronx
officials pieced together a $100 million package of tax breaks,
grants and loans.
The board of the city’s Industrial Development Agency will vote
on its piece of the city’s incentive package — adding up to $74
million in tax exemptions and another $15 million in other benefits
— on Feb. 14, and will hold a public hearing on Feb. 9 to discuss
the project.
In addition to grants and loans from the Empire State
Development Corp. and other state agencies, FreshDirect’s package
also includes a $3 million loan and $500,000 capital grant from the
Bronx Overall Economic Development Corporation and a $1 million
capital grant from the Bronx Borough President.
New Jersey had been trying to woo FreshDirect across the Hudson
River with incentives worth about the same amount. In a prepared
statement about the company’s decision to stay in New York City,
chief executive Jason Ackerman said the relocation will allow
FreshDirect to keep doing business with “vendors, local farmers and
purveyors and continue our long track record of growth and job
creation in New York.”
The company, which employs more than 2,200 people — 1,666 of
them full-time — expects to add 1,000 new jobs by 2020, according
to its application. When asked whether FreshDirect would take all
its employees now working in Queens with it to the Bronx, Maria
Coder, a spokeswoman for the company, said, “FreshDirect is looking
to grow,” and added that the move is “not a layoff.”
“Beyond that, we’re not going to comment.”
The IDA estimates the Bronx project will generate more than $254
million in economic activity for the city.
Since it received $2 million in city subsidies for its Queens
facility a decade ago, FreshDirect’s popularity has steadily grown
among New Yorkers. Customers place orders online for groceries and
schedule deliveries at their convenience.
FreshDirect’s application to the IDA indicates that it intends
to lease an undeveloped piece of land on East 132nd Street from
local real estate developer Galesi Group. Through an investment of
more than $118 million, it will construct a new building to house
its corporate office and manufacturing and production facilities;
truck facilities and a parking garage also will be included.
The company estimates that construction will begin in the fall
and should be finished within two years. It intends to increase
employment by an average of 190 new full-time employees each year
over the next five years.
A history of friction between the company and some of its
workers has union-affiliated groups demanding more specifics about
FreshDirect’s employment obligations under the deal. The company
has rebuffed efforts to unionize many of its workers; only truck
drivers are unionized, through United Food and Commercial Workers
Local 348S. The drivers, who represent about a third of its
workforce, make between $11 to $16 an hour depending on seniority
and experience level, said Eduardo Cordero, a union
representative.
“What are the wages and benefits?” asked Bettina Damiani,
director of Good Jobs New York, a watchdog group. “If we are first
subsidizing jobs but people then have to rely on things like food
stamps or subsidized housing and child care, then that affects that
quarter of a billion dollars that the city expects to get
back.”
