Read Mayor Bloomberg’s FRESH Announcement.
A 2008 study by the New York City Departments of Health and Mental Hygiene (DOHMH), City Planning (DCP) and the New York City Economic Development Corporation (NYCEDC) found that many low- and moderate-income neighborhoods across the City are underserved by grocery stores offering a full line of grocery products, including fresh fruits and vegetables, fresh meats, dairy and other food and nonfood products.
The Food Retail Expansion to Support Health, or FRESH, program will facilitate the development of stores selling a full range of food products with an emphasis on fresh fruits and vegetables, meats and other perishable goods. The proposed action will provide zoning incentives for neighborhood grocery stores to locate in some of the most underserved neighborhoods in the City with primarily pedestrian-oriented, local shopping districts. These areas encompass portions of Community Districts 9-12 in the Borough of Manhattan, portions of Community Districts 1-7 in the Borough of the Bronx, portions of Community Districts 3, 4, 5, 8, 9, 16 and 17 in the Borough of Brooklyn and the Special Downtown Jamaica District in Queens.
In addition, financial incentives through the EDC will be targeted toward the development of grocery stores and supermarkets in the FRESH program areas and other underserved areas in all five boroughs. The addition of more grocery stores will enhance local retail amenities, offer better access to fresh, nutritious foods, and provide local jobs, improving the quality of New York City’s neighborhoods.
2008 Study Findings
The 2008 study, Going to Market, used an index to identify need for additional grocery stores and supermarkets for all New York City neighborhoods. The index indicates a widespread shortage of grocery stores and supermarkets but a concentration of high need areas in Northern Manhattan, the South Bronx, Central Brooklyn, and small portions of Queens and Staten Island. High need areas generally fall within dense residential neighborhoods where the retail environment offers limited opportunities to purchase fresh foods and DOHMH data show consumption of produce is low and the rates of the twin epidemics diabetes and obesity are high among area residents. Low income households may be adversely affected if affordable fresh food is not widely available in their neighborhoods. The consequences include more time and money being budgeted for grocery shopping.
Existing and potential developers and operators of grocery stores face significant barriers that hamper viability and profitability. Grocers must earn a reasonable return on their investment. Many retailers decide not to sell fresh produce, meat and fish because there are higher business costs associated with selling these products. A produce manager, butcher or fish monger’s skill set usually commands higher salaries and the food must be refrigerated in equipment that is costly to purchase and operate. Even if successful in operating a store, grocers face outside pressures for large format retail space that is in short supply. Grocery store operators are often unable to compete for the limited number of large, ground floor storefronts against more profitable businesses, such as retail bank branches, drug stores and discount variety stores.
Other regulations can drive up the cost of developing grocery stores. The Zoning Resolution currently applies a higher parking requirement for food stores over other types of neighborhood retail and service uses. The current regulations also restrict grocery stores to 10,000 square feet in M1 Districts. These regulations have cost implications and reflect outdated assumptions about the impacts of new food stores. New grocery stores may be required to purchase more land to accommodate parking than would be justified by the demand, in commercial districts where prevailing market rents are high and larger tracts of land are scarce. In M1 Districts where development costs are lower than commercial districts and larger tracts of land are more available, full-line grocery stores are subject to a time-consuming and costly public review process at a very low size threshold. These M1 Districts encompass light manufacturing areas in Mixed Use Districts where residential uses are permitted and light manufacturing areas directly adjacent to underserved residential districts.
The FRESH Program – Purposes and Benefits
FRESH seeks to incentivize the establishment of neighborhood full-line grocery stores in low-income and underserved communities. When a full-line grocery store is included in a new building or expansion or conversion of an existing building, the program offers additional floor area in mixed use buildings, reduces parking requirements and allows larger stores to locate as-of-right in light manufacturing areas.
The financial and zoning incentives offered through FRESH aim to address some of the disincentives facing food store development and operation, and promote the positive influences that these stores have on the neighborhoods in which they operate.
Influence of Neighborhood Supermarkets and Grocery Stores on Quality of Life
- Grocery stores are a fundamental resource for neighborhoods. Grocery shopping consumes a large portion of most household budgets. In addition, shopping for food is an activity that is performed frequently. It is important that New Yorkers in pedestrian-oriented neighborhoods live within a comfortable walking distance of a grocery store. It is also important that an adequate selection of fresh food exists at competitive and affordable prices.
- DOHMH research shows that, in the areas identified as being in high need of more full-line grocery stores, 16 to 26 percent of residents reported they did not eat a single serving of fresh fruits or vegetables the day prior to being surveyed. These areas also suffer from high rates of obesity and diabetes. Increasing the availability of fresh foods in these neighborhoods is one means to reverse these health trends.
- Rates of obesity and diabetes have dramatically increased in New York City. A recent study by DOHMH determined that nearly 1 in 4 adult New Yorkers is obese, an increase of 17 percent in a two year period. Diabetes now affects over 700,000 people in New York City, and over 3 million New Yorkers have body mass indexes classifying them as either overweight or obese.
- More studies are demonstrating that access to food retail has a direct bearing on health. In 2006, a study published in the American Journal of Preventive Medicine found the presence of a supermarket within a Census Tract alone or in combination with a grocery store was associated with lower prevalence ratios of obesity and overweight residents1. More recently, a study of New York City’s food environment found that a higher density of retailers offering opportunities for healthier food purchases is associated with a lower prevalence of obesity in area residents2.
- In areas with a shortage of grocery stores and supermarkets, an increasingly large share of establishments that do not sell fresh foods are selling other food products, such as discount stores, drug stores and convenience stores. More neighborhood grocery stores would increase convenience and the availability of fresh foods, and ensure competitive pricing for those foods, empowering consumers to make healthier decisions about what to buy and eat.
Influence of Neighborhood Supermarkets and Grocery Stores on Economic Development
- Nationally, grocery shopping represents the largest segment of retail activity after automobile and automobile part sales, accounting for more than 16 % of retail sales3.
- There is enormous financial capacity for new supermarkets throughout the city. The city has the potential to capture approximately $1 billion in lost grocery sales to suburbs. The loss in sales alone is enough to support more than 100 new neighborhood grocery stores and supermarkets.
- The importance of having nearby food retail is often used as selling point in real estate listings. New Yorkers without access to an automobile rely on neighborhood stores that are close to their homes for everyday shopping needs.
- Grocery stores provide a wide range of economic development benefits for neighborhoods. Grocery stores require a broad range of workers, from those new to the workforce to skilled department managers. The number of jobs a new grocery store may add depends on its size and sales volumes; however, a grocery store typically employs dozens of people. More grocery stores may increase property values and expand the City’s tax base. Full-line grocery stores are high-value magnets that attract complementary stores and services, creating opportunities for additional private sector investment. New stores also contribute to the physical revitalization of communities.
The FRESH program, a joint effort sponsored by the Department of City Planning and the Economic Development Corporation offers an array of incentives for potential and existing food store developers and operators. The program will include:
The financial benefits of the FRESH program would be available to any store that meets the FRESH food store definition within FRESH Food Store Areas or other underserved areas eligible for Industrial Development Agency benefits. For more information on the financial incentives available for FRESH food stores click here.
1. Zoning Incentives
- Additional Floor Area in Mixed Residential and Commercial Buildings
- Reduction in Required Parking
- Larger As-of-right Stores in Light Manufacturing Districts
2. NYCIDA Financial Incentives
- Real Estate Tax Reductions
- Sales Tax Exemption
- Mortgage Recording Tax Deferral
1Kimberly Morland, Ana V. Diez Roux, Steve Wing, Supermarkets, Other Food Stores, and Obesity: The Atherosclerosis Risk in Communities Study, American Journal of Preventive Medicine, Volume 30, Issue 4, April 2006, pages 333-339.
2Andrew Rundle, Kathryn M. Neckerman, Lance Freeman, Gina S. Lovasi, Marnie Purciel, James Quinn, Catherine Richards, Neelanjan Sircar, and Christopher Weiss, Neighborhood Food Environment and Walkability Predict Obesity in New York City, Environmental Health Perspectives, Volume 117, Number 3, March 2009, Pages 442-447.
3U.S. Census Bureau, Estimated Annual Sales of U.S. Retail and Food Services Firms by Kind of Business: 1992 Through 2007, accessed at http://www.census.gov/svsd/www/artstbl.html.
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