BP Diaz, Bronx Business Leaders Defend Fresh Direct Funding

Bronx Borough President Ruben Diaz, Jr., is looking to appease critics of online grocer FreshDirect, which was granted $127.8 million from the city last week in exchange for staying in New York. The company had been considering another lucrative offer to relocate to New Jersey, prompting the Bloomberg administration to counter with an even bigger package of tax breaks and subsidies to convince it to move its headquarters to the Bronx’s Harlem River Yards instead. FreshDirect is currently based in Long Island City, Queens.

Some have lashed out against the deal as too generous to a company that pays 38% of its workers less than $25,000 a year, and doesn’t offer services to most neighborhoods in the Bronx.

“For the cost of this benefits package the city could give 4,385 students full, four-year scholarships to CUNY or hire 1,458 new teachers or pay for 350,000 GED test-prep programs or launch a micro-lending program for minority and women entrepreneurs,” City Comptroller John Liu said in a statement. “The EDC has not clearly justified why this much money should be used to subsidize this company.”

Diaz, who is allocating $1 million in capitol grant funds under his control toward the project, sent out a press release Monday announcing a “Memorandum of Understanding” between his office and FreshDirect, saying the company will make an effort to see that at least 30 percent of its new hires are Bronx residents, that it meet with Diaz by the end of June to discuss expanding its delivery services to more areas of the Bronx and continue efforts to get approval from the state to accept food stamp benefits, along with other provisions (you can read the whole thing here).

“FreshDirect’s decision to stay in New York City, right here in the Bronx, is a win-win for everyone,” Diaz said in a statement. “FreshDirect is a real home-grown success that will now continue to grow, creating almost a thousand new jobs in our borough, which is not only a victory for the Bronx but also the entire City.”

In the living wage bill compromise struck last month between City Council Speaker Christine Quinn and supporters of the Fair Wages for New Yorkers Act, including Diaz, Fresh Direct would be exempt from the mandate required of other publicly subsidized companies, should the bill get passed–-that direct workers get paid $10 an hour with benefits, or $11.50 an hour without.

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