FreshDirect Job Vows: At Odds with Environmental Claims?

Sometime in the next few weeks, a state supreme court judge could issue the first of several rulings on a legal challenge to FreshDirect’s plan to open an 11-acre headquarters in the Port Morris section of the Bronx, which would cost $112 million to build but receive $128 million in city and state subsidies.

The suit, filed in March, charges that the project violates a bevy of rules for government-aided development projects, not least by ducking the requirement for a full environmental review.

But the idling-delivery-truck giant’s attempt to push the project through with minimal public review could turn on a curious detail: When it comes to pushing its project in public, FreshDirect is crowing that its relocation from Queens to the Bronx would allow it to expand its operations and create 1,000 new jobs. Yet the expansion plans — and those new workers — seem to have disappeared when it was time to determine whether the project will bring additional truck traffic to the diesel-choked South Bronx.

Using a 1993 study

The backstory in brief: Since FreshDirect is seeking to use state land for its new headquarters — in this case, a railyard along the Harlem River previously targeted for a rail-to-truck offloading station that never materialized — it would normally need to conduct an environmental impact study to gauge the effect of setting up a major trucking station in a Bronx neighborhood already nicknamed “Asthma Alley.”

Either FreshDirect or the city Economic Development Corporation, though, hit upon a loophole: Because the state department of transportation had done an EIS of that intermodal train station back in 1993, FreshDirect could simply stipulate that their project wouldn’t add more traffic than that two-decade-old plan would have, and dispense with any need for a new EIS.

There are several problems with this maneuver, explains Gavin Kearney of New York Lawyers for the Public Interest, which is working with local residents opposed to project. The most glaring is that FreshDirect apparently played bait-and-switch with its future plans when it came to environmental impact, instead basing its traffic study on the same 2,072 workers that it currently employs in Queens.

“They don’t consider business growth at the site, which is the whole ostensible purpose of their relocation,” says Kearney. “So all their vehicle claims, you can bump by about 50 percent — it’s no longer 936 trucks a day [as stated in the FreshDirect traffic study], it’s 1400 trucks a day.” (Kearney’s filing also cites other problems, such as that the EDC’s paperwork only looked at a snapshot of additional traffic during rush hours, when most of FreshDirect’s trucks hit the streets at 5 a.m.)

FreshDirect spokesperson Tenley Allen confirmed that “we plan on adding 1,000 new jobs over the next 10 years,” but didn’t respond to questions why those jobs weren’t included in the traffic analysis.

The city agency, meanwhile, refused to comment on the discrepancy between the two sets of job figures, citing the pending litigation. Instead, EDC forwarded court affidavits that repeated the job number gap: EDC vice president Art Aguilar’s testimony confirmed that the city’s traffic study was based on “traffic levels expected at project completion, in late 2013, when the Facility is expected to employ 2,072 workers,” while the main EDC memorandum on the case approvingly notes that “Fresh Direct expects to employ approximately 3,000 full time equivalent employees by 2018.”

Too many trucks

All this quibbling over numbers matters, say the Bronx locals who oppose the project, because trucks are the main quality-of-life concern in Port Morris and neighboring Mott Haven, which is already the site of a much-derided waste transfer station.

“You see endless garbage trucks coming towards you off the bridges, and then going right back on the bridge to go back to Manhattan,” complains A. Mychal Johnson, a Bronx Community Board 1 member who helped found South Bronx Unite to oppose the FreshDirect project. At Millbrook Houses alongside the Major Deegan, he says, you can see the air pollution marked on the walls: “The top of the building is maybe three shades darker than the bottom.”

That a major city development project got preliminary approval — the project is still awaiting a vote of the state Empire State Development Corporation, which is in turn awaiting resolution of the lawsuits — despite not getting its numbers straight may seem disconcerting, but it’s par for the course, says Kearney.

“The intent of SEQRA, the statute that compels the environmental review, is let’s have a robust decision making process,” he says. “The reality in our experience is you dispatch it as quickly and as efficiently as you can. And because of the sheer volume of environmental reviews in New York City, and because the only recourse you have is litigation, it happens all the time.”

Moreover, since the FreshDirect plan doesn’t involve any zoning issues that would require the city council to weigh in, the only public hearing on the project was one in early 2012 at the city Industrial Development Agency, at which most of the IDA board members weren’t even present.

Jobs gained, jobs lost

Meanwhile, even if the Bronx ends up with 3,000 FreshDirect workers, there’s still no guarantee how many of those jobs will be new to the city as a whole: 2,000 of them will be shifted from Queens, and no one has studied how many of the other thousand may be cannibalized from existing city food retailers that lose market share to an expanding FreshDirect. (This is another bone of contention in the legal challenge, in fact, which notes that the $18.9 million in state Excelsior tax credits that FreshDirect is applying for are supposed to be barred for retail establishments — something that ESDC plans to get around by classifying FreshDirect’s fleet of direct-to-your-home delivery vehicles as a “distribution facility.”)

The IDA has in the past attached job-creation requirements for commercial projects, but the FreshDirect project is exempt because it is considered an industrial development deal, says Bettina Damiani of Good Jobs New York (which has compiled a handy chart of the bevy of public subsidies the project is set to reap).

“There’s no clawback provision on this deal — none — so they don’t even have to create any jobs,” says Damiani. That’s potentially good for the Bronx’s traffic woes, but it would be less of a satisfying payback for the public’s $128 million.