How much will Fresh Direct pay back?

From the Queens Courier:

As online grocer FreshDirect is getting ready to pack up and exit Long Island City, the company is listing its massive Queens waterfront facility for sale.

FreshDirect has hired Cushman & Wakefield to sell its facility at 23-30 Borden Ave. ahead of its move to the South Bronx, which was approved last year.

Based on this article, it seems that Fresh Direct is trying to sell before they even have the rest of their subsidies in hand and opposition growing.

They agreed to stay till 2025, and the NYCIDA is supposed to have been monitoring them every year.

Funny how in 1999 in their application to IDA, they claimed more full time jobs than what's currently listed in their NYS ESD application for the $10 million.

So, will FD have to pay back the subsidies they got to fix up that space?

Fresh Direct Inc. f/k/a Gourmet Holdings, LLC
ID: 92407
Awarding Agency: IDA
Address: 23-30 Borden Avenue
Borough: Queens
Block: 68
Lot: 38
Subsidy Program: Industrial Incentive
Start Date: 12/08/1999
End Date: 06/30/2025
Jobs at the start of the deal: -
Jobs projected: 160
Current jobs FTE: 2650
Part-time permanent jobs: 76
Part-time temp. jobs: 0
Full-time permanent jobs: 2612
Full-time temp. jobs: 0
Contract employees: 0
Construction jobs: 0
Health Benefit full-time?: Y
Health Benefit part-time?: N
Percent of employees living in NYC: 78
Total value of subsidy: $5,214,191
Amount used to date: $3,149,480
Recapture amount: $0
Penalty: 0.00
Data source fiscal year: 2013
Bond Issuance: $69473
Value of Energy Benefit FY 11: $0.00
REAP FY 11: $0.00
CEP FY 11: $0.00

Giving thanks for his blessings

From CBS New York:

Despite not having cooking gas for more than a month due to a leak, 46 families of the Ravenswood Houses in Long Island City, Queens, will still enjoy a turkey with all the trimmings.

Brian McMichael, who grew up in the housing complex and just moved his restaurant to Long Island City a month ago, came to the rescue, WCBS 880’s Jim Smith reported.

“My heart goes out to these people, and some of them I actually know personally,” McMichael said, owner of Miriam’s Southern Cuisine.

Partnering with Fresh Direct for the turkeys, McMichael said he’s inspired by the values his mother instilled in him, the restaurant’s namesake.

“She would be so proud. She would just pray. Pray and be joyful,” he said.

His shop will also be whipping up an extra 30 meals for the food pantry.

AG candidate wants Parkside Group investigated

From the Daily News:

Ramon Jimenez, a Bronx lawyer and Green Party candidate for Attorney General, called on the state Joint Commission on Public Ethics to investigate the actions of a lobbying firm representing FreshDirect in its bid to move to the Bronx.

In the complaint, filed Friday, Jimenez accuses the lobbyist, The Parkside Group, of contacting Mayor de Blasio’s office on behalf of the online grocer and not properly disclosing its activities to the ethics commission.

“We want the law followed as far as them having to record all contact they have with officials,” Jiminez told The News Friday. “It’s a concern for the people of New York, and especially to everyone in the South Bronx.”

A Parkside representative said the group was well within the boundaries of New York’s lobbying laws, and chalked up the complaint as a campaign tactic.

“We are proud to be working on a project that is creating thousands of good paying jobs in the poorest Congressional district in America, and we have always complied with all requirements of city and state lobbying laws,” said Evan Stavisky, a Parkside Group spokesman. “This is just another last-ditch political stunt.”

Isn't it interesting that a political leader who purports to represent part of Queens is actively lobbying to move jobs out of the borough?

Fresh Direct really got a sweetheart deal

Very interesting post over at Atlantic Yards Report:

ESD is about to give Fresh Direct a $9 million grant and a $1 million loan to move/expand from Long Island City to the South Bronx.

That's on top of $10.5 million from the New York City Industrial Development Authority and $1 million from the New York State Department of Transportation and $5 million in New Markets Tax Credit Equity.

Add $15 million from the investment fund Brightwood Capital, $40 million in the company itself, and a whopping $84,168,000 in an EB-5 loan.

Unmentioned are previous promises (which may have been adjusted) of $18.9 million in state Excelsior tax credits; $4 million in state energy grants and incentives; up to $1 million in vouchers for the purchase of electric vehicles; about $74 million in city sales tax exemptions, mortgage recording tax deferral, and real estate tax exemptions; $4.9 million in city energy benefits; $1 million capital grant from Bronx Overall Economic Development Corporation; and a $3 million loan and $500,000 capital grant from the Borough President

Let's put aside the strangeness of the city and state subsidizing a cross-borough move based on a perceived threat from New Jersey, an unlikely base for a delivery service that needs quick access to Manhattan.

Or that Fresh Direct is moving after having gotten subsidies to stay in Queens through 2025.

Or that neighbors (see South Bronx Unite) pose some heavy concerns about the project's environmental impacts, and that if the promised job total is not reached, there's no "clawback provision" to recover subsidies. (See Good Jobs New York timeline.)

The really strange thing is the reliance, according to ESD Board Materials (p, 51ff.), on the EB-5 immigrant investor program, in which foreign millionaires, mostly from China, park $500,000 in a purportedly job-creating investment, get green cards for themselves and their families, and later get their money back. (In this case, they're getting a relatively high--for EB-5--rate of 4.5%.)

The developer gets cheap capital. The public is supposed to get 10 jobs for each investor.

According to promotional material supplied almost surely by the New York City Regional Center, the private investment pool set up to market EB-5 investments (and reap fees), the project would not be $166 million in total, but $208 million.

That's not the only misleading part. EB-5 funding is said to make up just 40% of the project, rather than more than 50%.

And Fresh Direct is said to be providing the rest of the funds, which is clearly not true.

Fresh Direct to get $130M to move from LIC to the Bronx

Fresh Direct deal under fire

From the Daily News:

Two months after the Bloomberg administration approved $82 million in subsidies for the company to move to the South Bronx, two City Council members have asked the Cuomo administration to halt the deal.

Melissa Mark-Viverito and Maria del Carmen Arroyo want Albany to delay the move pending an audit of the Harlem River Rail Yards, the state-owned, privately-controlled waterfront site where FreshDirect plans to build its new headquarters.

"We need greater transparency," Mark-Viverito said Tuesday.

The city, state and the Bronx have already committed about $120 million to the online grocer, with some caveats, but the Cuomo-controlled Empire State Development Corp. has yet to approve an additional $9 million. It expects to vote on the grant this summer.

"We are concerned that this property has been and continues to be used in a manner that is causing severe harm to the residents of the South Bronx and that undermines nearly two decades of rezoning and development," the councilwomen wrote in a May 3 letter to Joan McDonald, state Department of Transportation commissioner.

When Harlem River Yard Ventures leased the site from the state DOT in 1991, the company vowed to develop a new rail system that would reduce local truck traffic.

But Mark-Viverito and Arroyo claim it has done the opposite, inking subleases with heavy truck users such as FedEx, the New York Post and now FreshDirect.

Fresh Direct deal's collateral damage

From the Daily News:

Fresh Direct’s government-subsidized move to the Bronx could spell the end to one Queens businessman’s American dream.

Gus Kaloudis, 36, poured his life savings into the New York Deli in Long Island City when he bought it three years ago. The busy eatery seemed like it would be a dependable cash cow since it was the only nearby lunch joint for Fresh Direct and other workers in the industrial area.

But when news hit that the online grocer would pack up and move to the Bronx in 2015, Kaloudis, a father of three, knew his livelihood was in jeopardy.

“How would you feel if 50% of your customer base disappeared,” he said in between ringing up customers at his Borden Ave. deli.

“I haven’t been able to catch my breath.”

He doesn’t know how he will stay afloat without Fresh Direct drivers, corporate staffers and vendors stopping by his store every day for their morning newspaper or a pack of cigarettes.

Queens to lose 2,000 jobs to the Bronx

From GlobeSt:

After considering a move to New Jersey, Fresh Direct will be establishing its new headquarters and operations center in the Bronx. The fresh food Internet grocer will invest $112.6 million in a new 500,000-square-foot facility on the 16-acre Harlem River Yards site, retaining nearly 2,000 existing jobs and creating almost 1,000 new jobs, the city announced Tuesday morning.

The construction of the new facility will also result in the creation of approximately 684 construction jobs in the Bronx and an overall economic impact to the city of nearly $255 million. It is expected to open in 2015.

“Making sure that companies like Fresh Direct can grown and invest in New York City is a key part of our strategy to rebuild and diversify our economy,” says Mayor Michael Bloomberg, in a statement following the deal. “A thousand new jobs at the Harlem River Yards is great news for the Bronx and a welcome boost to our city’s economy.”

Fresh Direct—founded in 1999 and currently based at 23-30 Borden Ave. in Long Island City, Queens—purchases produce, meat and dairy from over 60 New York State-based farms and serves a customer base of over 100,000 people. Its new headquarters will expand its service area to regions surrounding New York City, as well as New Jersey, Connecticut and Philadelphia.

Union-busting homeless men set to invade LIC

"Dear Crappy,

I'm pretty much of the mind this is a fait accompli. Nonetheless, I imagine some folks in LIC would be VERY interested to know they'll be getting some new neighbors soon...

Fresh Direct has been busted for hiring illegal immigrants; now they're endeavoring to bust unions by hiring men from homeless shelters. A Department of Homeless Services representative at one of the prior Town Hall Meetings said the residents of 400 McGuinness would be expected to work and that Fresh Direct was one such employer.

In other words: 400 McGuinness will be a nice dormitory for that nice big Fresh Direct depot on Borden Avenue. In Queens." - anonymous

In a nutshell, an outfit is opening a new homeless shelter in Greenpoint and shipping their residents (who by and large are not Greenpointers) to LIC. I can just hear those property values crashing now!

Maybe if the unions got their collective heads out of Walmart's ass for a minute, they would wake up and realize that the rug's being pulled out from under them at Fresh Direct...