Statement on IDA’s Approval of Subsidies for FreshDirect

 

South
Bronx Unite (SBU), New York Lawyers for the Public Interest (NYLPI), and Good
Jobs New York (GJNY) Condemn New York City Industrial Development Agency’s (IDA’s)
Approval of Subsidies to FreshDirect
 
New York, NY – July 23, 2013 – This morning the Board of the New York City Industrial Development Agency voted to approve the issuance of tens of millions of dollars in City subsidies to FreshDirect to help facilitate the company’s proposed relocation to the South Bronx. South Bronx Unite (SBU), New York Lawyers for the Public Interest (NYLPI), and Good Jobs New York (GJNY) issued the following statements in response:
“Hospitalization rates for asthma in the South Bronx are 21 times higher than those of more affluent parts of New York City,” said Libertad Guerra, professor, resident and South Bronx Unite petitioner.  “IDA’s approval of this subsidy for FreshDirect makes the City directly complicit in exacerbating the devastating health crisis in the South Bronx, implicating every New York City taxpayer with them. We urge the entire city to boycott FreshDirect until it stops its plan for the South Bronx.”
“Offering FreshDirect an enormous subsidy to build a diesel trucking facility in an area with the highest rate of asthma in the
nation is criminal. And to add an enormous warehouse, underground parking lot and fueling station in a South Bronx waterfront flood zone is a gross misuse of taxpayer money, particularly in the wake of Hurricane Sandy,” said Harry Bubbins, Director of Friends of Brook Park and South Bronx Unite lawsuit petitioner. “This is an out-the-door extravagance of an out of touch Mayor wasting our tax money. The IDA approval of this subsidy undermines all the efforts that went into Bloomberg’s multi-billion dollar plan to protect our coastline and better utilize open space to absorb storm surges. The site on which FreshDirect proposes to build is directly next to two power plants on our vulnerable coastline.”
Gavin Kearney, Environmental Justice Director at New York Lawyers for the Public Interest, added, “Today the IDA voted to waste millions of taxpayer dollars to subsidize a project that will bring 1,500 diesel truck trips every single day to the South Bronx—a community already suffering from high rates of asthma, cardiovascular disease and numerous other health problems created by diesel exposure. The health and quality-of-life impacts of this project will be severe. The vague promises of jobs and clean trucks made to justify this massive hand-out are just that—promises made to put an appealing public relations veneer on a rotten proposal. FreshDirect squeezed tens of millions of dollars out of the City without obligating itself to hire residents of the South Bronx or obligating itself to run clean trucks. While today’s vote is unfortunate, it is nowhere near the final word. Numerous government approvals remain and we continue to seek justice for South Bronx residents through the courts.”
Bettina Damiani, Project Director of Good Jobs New York, stated, “Today, FreshDirect was approved for one of the largest corporate
giveaways of city subsidies during the Bloomberg Administration. Despite its multi-million dollar price tag and rhetoric from officials, there are no job related recapture provisions from the IDA that requires FreshDirect to create any good jobs for Bronx residents. In what is possibly the last major action by the IDA board of this Mayoral administration, taxpayers and Bronxites are again expected to fork over subsidies for an unaccountable and environmentally
destructive subsidy deal in one of our poorest neighborhoods.”***************************
NYC COMPTROLLER LIU STATEMENT ON CITY’S
$127 MILLION FRESH DIRECT GIVEAWAY

Details Small-Biz Tax Cut to
Spur Economic Development

***************************
NEW YORK, N.Y. – City Comptroller John C. Liu today cast the lone “no” vote on the Industrial Development Agency’s $127 million subsidy for Fresh Direct, which received final authorization. He stated the following:
“This was a bad idea when it was first voted on a year ago, and it’s an even worse one today. New York City needs jobs, particularly in the Bronx, but this is a wasteful way to do business that picks taxpayers’ pockets in order to reward fat cats.
“During the Bloomberg Administration, the Economic Development Corporation has doled out hundreds of millions of dollars in corporate welfare to companies that fail to deliver on their promise of jobs for New Yorkers, and we have no reason to believe this will be any different.
“Even if the EDC’s dubious projections turn out to be accurate, the Fresh Direct deal will go down as yet another Bloomberg big business boondoggle. Spending roughly $127 million to create 964 new jobs—$131,397 per job—just doesn’t make economic sense.
“Instead of these big corporate giveaways, our tax dollars would be better spent helping level the playing field for a truly vital engine of job growth in New York City, small businesses.”
At a press availability, Liu spoke about his proposals to end subsidies for big corporations and instead create $400 million in savings for small businesses. In particular, he called for:
  • Eliminating the City’s General Corporation Tax for the 240,000 businesses with annual tax bills under $5,000
  • Exempting businesses that make less than $250,000 in annual income from the City’s Unincorporated Business Tax
  • Reducing fines on small businesses
Background
In April 2013, Comptroller Liu released The People’s Budget, which details his proposals to eliminate giveaways for big corporations and cut taxes and fines for small businesses by $400 million. More info is available here (particularly on pages 5 – 8 and 41 – 42):
In March, 2012, Comptroller Liu released an audit that found the EDC gave $318 million to companies that didn’t deliver the promised jobs:
In February 2012, Comptroller Liu’s Office voted against approving the Fresh Direct subsidy:

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