July, 2004

Cover & Feature Stories

A New Market For New York

There is talk about building a new terminal market for New York. My great-grandfather had a spot on the old Wallabout Market in Brooklyn; my grandfather and father both worked out of the old Washington Street Market in Manhattan; and my family was an original tenant when the New York City Terminal Market opened in Hunts Point in the Bronx back in 1967.

I, of course, have fallen into journalism, and my family sold their units over ten years ago. Still, it was in Hunts Point that I cut my eyeteeth learning about the produce industry. I learned a lot on that market and appreciate the color and energy of working in a very unique place. With thought that it may come tumbling down, I had a little conversation with myself about the possibility of a new market:

Why would New York need a new market?

When the current market opened in 1967, a wag commented that it was the newest antiquated market in the world. The problem was that the market had been discussed for a half century and seriously engineered and designed for over a decade. On opening day, the market did not leave enough room for tractor-trailers to back in and turn around.

So that’s it — the trucks find it hard to maneuver?

Not by a long shot. Even things that were properly designed for the late ‘60s aren’t working today. For example, every warehouse has rail siding directly behind the house. This was very convenient for rail cars to be delivered to each wholesaler. But today most wholesalers don’t even use rail cars — they use piggybacks or over-the-road trucks. As such, most wholesalers have their back doors filled with trailers. But every single day, every single trailer has to be moved so the railroad can move in rail cars for the few wholesalers who handle items suitable for rail cars. This represents millions and millions of dollars spent each year, closing the trailers, stopping work loading and unloading and moving the trailers while the railroad does its thing.

OK, so the trucks can’t maneuver and the railroad sidings are antiquated and lead to great expense — is that all there is?

How about the fact that the market is just too small? There have been only inconsequential additions to the facility in past 37 years. Today firms at the Hunts Point Market can have over 1,000 trailers being used as storage, or additional warehouse space, at any given time. The place is bursting at the seams.

So a bunch of produce wholesalers need a more modern, larger facility — why is this a matter of public concern?

Traditionally terminal markets, along with port facilities, have been considered matters of public interest — and much for the same reason. All these facilities are open to all interested parties for the transaction of business. Privately owned airports and warehouse facilities are only open to those the owner chooses to do business with.

Yeah, but is there a real public interest involved?

In effect, a wholesale produce market serves as the produce receiving and warehouse facility for thousands of greengrocers, bodegas, independent supermarkets, foodservice operators, etc. To the extent the facility has adequate capacity and can operate efficiently, those small vendors can compete with large “big-box” stores that can build their own distribution facilities. To the extent the market is capacity-constrained or antiquated, smaller independent retailers and foodservice operators are rendered non-competitive.

In fact, the importance of the market goes well beyond the buyers. Today the Hunts Point Market is a linchpin of sustaining a rural agricultural economy, both in the northeast and around the country — even the world. Most major chains dictate to farmers what they are willing to buy — the size, the grade, the variety. If the farmers happen to have something else to sell, they are out of luck.

These big chains are also bureaucratic. For the most part, they can’t respond to supply and demand quickly enough to help farmers out. But the wholesalers in New York, almost uniquely in the country, can work their clientele to get a surplus product put on sale in thousands of venues, almost instantly. This helps farmers as it gives them an outlet for crops that otherwise would be dumped or left in the field.

So a new market would help the rural economy, be bigger, designed to accommodate modern transportation modalities and could help keep New York distinctive by allowing small retailers and foodservice operators to compete effectively. Have I got it?

Yes, but there is a lot more. When the Hunts Point market was built, words like Food Safety, HACCP and Food Security weren’t even considered. Starting with a clean piece of paper, we can build a world-class facility — one that meets and exceeds the standards of every chain retailer in America and sets a standard for the world in food safety and food security.

Anything else?

A related issue is maintaining the cold chain. This impacts on safety, but also has a lot to do with quality. The current market wasn’t designed to make this easy; it will be integral to the design of a new facility.

Wow, this is great. A new market will be efficient and spacious, preserve small business, provide safer food more securely — and even offer better quality fruits and vegetables to consumers. You guys are going to do everything but clean the air!

Uh, actually, the new market will cut down on air pollution too.

What?

Yeah, well, first the larger warehouses means we won’t need all those storage vans burning diesel day and night. Then the new rail design means we won’t need jockeys moving every trailer every time the railroad makes a delivery. A better traffic pattern will combine with adequate docking and warehouse capacity to reduce the average length of time a truck is in Hunts Point, whether for drop off or pick up. Quicker turnarounds mean less pollution. Finally docks throughout the market will be equipped with special jacks that allow trucks to plug in to a clean electrical system and keep their cargo and the cab cold with AC — no need for trucks to keep their motors running.

It really sounds too good to be true. Still, the market has managed to inch along. Why take this step now?

The customers need a more efficient distribution point because competition with out-of-town “big box” stores has become so intense. The wholesalers need larger facilities to serve their customers with the growing panoply of fruits and vegetables. They also need more modern facilities to reach out to those interested in RFID, Food Security plans, etc. And there also is new competition.

Where?

Philadelphia is building a new market and it threatens to win a lot of business away from New York. Due to inefficiencies of design, The New York Terminal Market can take hours for customers to navigate. For many, rather than waiting on line for two hours in New York, they can just drive down quickly to Philly. It could actually take less time. And remember, Hunts Point employs over 9,000 people directly — with many tens of thousands more employed as a result of the secondary effects of having the nation’s largest produce market in New York City. So there are a lot of jobs at stake. In fact, New Jersey is quietly talking to local industry leaders wondering if they can woo the market over the Hudson.

Can they?

Everyone at the market sings “I Love New York” — but they really need a new market. Right now, the City is working hard on the project, with the idea being to build a new market right on the 120-acre site that holds the current market. But if things get mired in bureaucracy — well, the new facility is the priority.

OK, I’m in. We need to build a world-class facility in the City of New York. It will save jobs, assist farmers, help small retailers and restaurants flourish and make the city, the state, the tri-state area better fed with a safer, more secure food supply. Just two little questions: How much will this cost and who will pay it?

Without final plans, it is difficult to say what the cost will be — but preliminary estimates are from $200 to $300 million dollars. It’s a lot of money, but an innovative private/public partnership is envisioned to make it feasible.

The basic outline being discussed is that the City of New York will, with help from state and Federal funds, handle all site preparation, including demolition of the old market and preparation of the soil (much of the market is built on landfill and has posed a problem through the years). The city would also fund public highway work to insure a dedicated food center route is built from the local highway. The city will also build parking, security gates and other infrastructure.

The merchants would either build or pay rent to the city to occupy the actual warehouses. Rent for these facilities will be kept reasonable, as the city will, in addition to providing the core infrastructure, also provide low-cost financing to build the warehouses. In addition, merchants will be able to finance the move to a more modern and much larger facility through the efficiency gained by not having to operate in an antiquated manner.

Final Thoughts?

This is really going to be something extraordinary. It won’t just be the old Hunts Point modernized — we will build a cross-docking facility, a farmers market to help regional growers; we will welcome wholesalers from the now defunct Bronx Terminal Market and those operating throughout the city. We anticipate a school to train students to work on the market and in the produce and food industry. It will be a terminal market, but also a shining city on a hill, another sign of New York’s post 9/11 comeback.  pb