Fresh Direct Ponders Move
Fresh Direct, an online grocer that delivers to residences and offices in the New York City metropolitan area and one of the largest employers in Long Island City and Queens as a whole, has become a prize in a bidding war between New York City and New Jersey. The business, which bowed in New York City in 2002, is rapidly expanding and expects to outgrow its Long Island City facility in a few years.
Fresh Direct has significant relationships with wholesale food markets and companies based in Hunts Point, The Bronx, making the city’s one mainland borough a logical choice for a new site. What’s more, the company seeks to expand outside New York City, and Harlem River Yards in the Port Morris section of The Bronx, the largest facility served by CSX rail south of Albany, will help it to reach such cities as Chicago and Boston. The company has also expanded into suburban areas in New Jersey, Connecticut and Nassau and Westchester Counties over the past several years, and The Bronx offers quick access to highways connecting to these locations. Fresh Direct is estimated to be about to spend some $113 million to build a new headquarters at the Harlem River Yards.
Part of the deal to lure Fresh Direct to The Bronx would exclude the online grocer from a proposal aired at City Hall on January 13 by City Council Speaker Christine Quinn to introduce legislation next month mandating a “living wage” of $10 an hour with benefits, or $11.50 an hour without benefits for employees of businesses that directly receive city subsidies, as well as for employees of on-site contractors and subcontractors in city-subsidized developments.
The proposal, a compromise, would exclude employees of commercial tenants in subsidized developments, such as retail workers.
Fresh Direct has some 1,800 employees on its payroll currently and expects eventually to add approximately 1,000 more in the course of its move and expansion. Fresh Direct drivers joined Local 348S of the United Food and Commercial Workers in 2006 with a five-year contract that includes no minimum starting wage and has a maximum that caps the highest wages the company must pay at $12 to $18. Warehouse workers voted against affiliating with the International Brotherhood of Teamsters in 2007.
The recipient of more than $2.5 million in cash and tax breaks from the city and state in the last 10 years, Fresh Direct is being encouraged by New York City and state officials to stay within city limits, even if not in Queens, with a package of cash and tax benefits reported as worth $112 million.
Fresh Direct has been offered some $100 million in public benefits to move to New Jersey. Garden State Governor Chris Christie made a $200 million offer to the Hunts Point Terminal Produce Cooperative when the cooperative was negotiating a new lease with the city; it chose to stay in The Bronx, and would be a good fit with Fresh Direct. Fresh Direct may well set up a distribution facility in Southern New Jersey to store non-perishable items and some perishable groceries such as bagels, yogurt and other dairy products but still would keep meat, fish and produce at its main facility, a 500,000 square foot warehouse that would be built with a $125 million private investment on The Bronx site near the Willis Avenue Bridge.
A representative of the city Economic Development Corporation (NYCEDC) termed Fresh Direct “an important city employer” that NYCEDC wants to continue creating jobs in New York City.
“At a time when job creation is the single biggest priority throughout the nation, the possible loss of a local business in Long Island City highlights the need to remain welcoming to businesses locating here,” state Senator Michael Gianaris said. “I encourage Fresh Direct to remain in New York City and keep its jobs in our neighborhoods.”
“While it is good to know that Fresh Direct, a company with a record of growth in Queens, is a victim of its own success and now needs more space, we are not happy about a possible move out of state,” Queens Borough President Helen Marshall declared. “We would like these 1,800 jobs to stay here. Wherever Fresh Direct lands, we would like to hear that no jobs are lost and the company continues to grow.”