New York wholesalers continue to relocate - The Packer

New York wholesalers continue to relocate

01/22/2010 12:30:58 PM
Doug Ohlemeier

NEW YORK — Work continues to relocate New York’s produce wholesalers into modern distribution facilities.

Under discussion with the city the construction of new market buildings adjacent to current Hunts Point Terminal Market on land east of the market’s aging buildings.



Doug Ohlemeier

Rail cars and trailers occupy space  east of the Hunts Point Terminal Market. The market is in discussion with the city of New York to build new facilities on this large tract of land.

Presently up to 800 refrigerated trailers used for produce storage and rail cars setting on railroad tracks occupy the 40-acre parking lot east of market building D.

Under the plan, a new facility would be constructed at the site of building D, which would be razed. Market buildings A, B and C would remain standing for as private storage.

Up to 500,000 square feet of new construction would be built, bringing total market operation space to around 1 million square feet.

Market co-chairman Matthew D’Arrigo, vice president of D’Arrigo Bros. Co. of New York Inc., said the market and the city are working on a final design for the new operation.

The real question, however, is where the money to build the facility will come from, D’Arrigo said.

“What mix of money, government versus what the market merchants will have to pay is the key to getting a deal made with the city,” he said. “It will be an interesting negotiation. Whether something will be done remains to be seen.”

Ongoing negotiations

Negotiations have been occurring and the two sides planned to resume talks with the new year, D’Arrigo said.

The process has been going on for years.

D’Arrigo said construction of the new produce terminal in Philadelphia hasn’t gone unnoticed by New York’s distributors. He said the Philadelphia wholesalers are constructing a market that is as big as New York wants to build but at substantially less cost.

New York has certain handicaps that hinder construction and escalates building costs, D’Arrigo said.

The predominant methodology of the New York City Economic Development Corp., the governing body that deals with the market construction, on how it plans, prepares and performs for jobs is different and brings additional costs, D’Arrigo said.

Labor costs and the handicap city government imposes on itself to build jobs help increase costs too, he said.

D’Arrigo said a deal has to be made within the next six to 12 months.

“We are already five years into the future,” he said. “Today, the soonest we will get something new is five years from now, at 2015. The more we delay, it could be 2020. If a deal isn’t made, we will be sacrificing another four to five years on the timeline, which puts us to 2020 before we have a new market. Then you will miss the opportunity with this mayor.”

Time running out

If the market doesn’t reach agreement soon with the Mayor Bloomberg administration, the whole city government would change and the market would have to start anew with educating the politicans, bureaucrats and others on the need for a new facility.

If a deal falls through, the market would have to consider other options, which include talking with New Jersey, which has made overtures to relocate the market across the Hudson River.

Another option is to wait another four to five years for the new city administration or, in the worst case scenario, witness a general fragmentation of the market’s marketplace.

Neither of the alternatives are favored, D’Arrigo said.

“There are forces at work nationally and at the federal government level that are changing the rules on how the produce game is played,” he said. “Those of us in obsolete, 40-year-old facilities will be at a disadvantage.”



Doug Ohlemeier

Produce being sold on the Hunts Point Terminal Market. Market vendors continue to look to construct new and more modern distribution facilities.

Some market wholesalers remain skeptical of seeing a new facility.

“I will believe it when I see it,” said Richard Cochran, president of Robert T. Cochran & Co. Inc. “It needs to be done if we will have any kind of food safety. Everyone wants to be certified.

“New York being the biggest and premier market, we ought to have the best market in the world, but we don’t. The city can build a Yankee Stadium, but it can’t build us a market.”

Skepticism

Carlos Garcia, general manager of Krisp-Pak Sales Corp., said he doesn’t think he’ll see a new market anytime soon.

“I will be retired by the time they open that new market,” he said. “I don’t see it happening in the next few years, especially under the economy we are under now. I don’t think anyone will be looking to spend the kind of money it will cost to build it.”

John Garcia, Krisp-Pak’s president and father of Carlos Garcia, served as president of the market’s board in 2000.

Carlos Garcia said he has seen the blueprints of what the vendors wanted to build.

“All the way back then, they had ideas,” he said. “I don’t know how far it has come since then. It is a nice place they plan on building.”

In general, Garcia said everything has become a bigger struggle than things were nearly a decade ago.

Rene Gosselin, operations manager for Coosemans New York Inc., said time after time he’s seen city politicians tour the market and then in front of the media talk about how a new market is needed. After a while, nothing happens.

“This market is controlled by the city, so a lot of the money has to come through the city,” Gosselin said. “If the city doesn’t put it up, it won’t happen.”



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