BACKGROUND

A study (in PDF) conducted for the Mayor's Food Policy Task Force by the New York City Departments of Health and City Planning and the New York City Economic Development Corporation shows that many neighborhoods across the city are underserved by grocery stores. The resulting lack of nutritious, affordable fresh food in these neighborhoods has been linked to higher rates of diet-related diseases, including heart disease, diabetes and obesity.

In response, the City has established the Food Retail Expansion to Support Health (FRESH) program. FRESH provides zoning and financial incentives to promote the establishment and retention of neighborhood grocery stores in underserved communities throughout the five boroughs.

FRESH PROGRAM ELIGIBILITY

The FRESH program is open to grocery store operators renovating existing retail space or developers seeking to construct or renovate retail space that will be leased by a full-line grocery store operator. FRESH benefits are available to stores within the designated FRESH-eligible areas, shown below. Tax incentives are discretionary and will be assessed on a per-case basis for eligibility.

Stores that benefit from the FRESH program must also meet the following criteria:

1. Provide a minimum of 6,000 square feet of retail space for a general line of food and nonfood grocery products intended for home preparation, consumption and utilization;
2. Provide at least 50 percent of a general line of food products intended for home preparation, consumption and utilization;
3. Provide at least 30 percent of retail space for perishable goods that include dairy, fresh produce, fresh meats, poultry, fish and frozen foods; and
4. Provide at least 500 square feet of retail space for fresh produce.

FRESH INCENTIVES

Zoning Incentives

The following zoning incentives are available to eligible grocery store operators and developers through the New York City Department of City Planning:

Additional Development Rights

• One additional square foot of residential floor area will be available for every square foot provided for a grocery store in a mixed-use building, up to a 20,000 square foot limit.

Reduction in Required Parking

• Up to 40,000 square feet of grocery retail space will be exempt from parking requirements in commercial districts that permit residential buildings with ground floor retail.
• Up to 15,000 square feet of grocery retail space will be exempt from parking requirements in other commercial and light manufacturing districts.

Larger Stores in Light Manufacturing Districts

• Grocery stores up to 30,000 square feet will be permitted as-of-right in M1 districts.

Visit the New York City Department of City Planning website to learn more about FRESH zoning incentives.

Financial Incentives

The following financial incentives are available to eligible grocery store operators and developers through the New York City Industrial Development Agency (NYCIDA)*:

Real Estate Tax Reductions

• A 25-year land tax abatement may be offered, equal to $500 multiplied by each full-time equivalent employee at time of application (or the full value of the land tax for project sites located within Empire and Empowerment Zones).
• A 25-year stabilization of building taxes may be offered, based on the pre-improvement assessed value.
• A phase-out of the real estate tax benefits begins in year 22 and continues through year 25 at 20 percent each year. In year 26, real estate taxes increase to full amount.

Sales Tax Exemption

• An exemption from the 8.875 percent sales tax may be offered on materials to construct, renovate or equip facilities.

Mortgage Recording Tax Deferral

• A deferral of mortgage recording tax relating to the project's financing may be offered, equal to 2.05 percent of the mortgage amount for mortgages of $500,000 or less, and 2.80 percent for mortgages greater than $500,000.

*All NYCIDA benefits are discretionary. Companies requesting assistance from the NYCIDA will be evaluated by NYCIDA staff individually to determine specific eligibility. All benefits are, by statute, subject to the approval of the NYCIDA’s Board of Directors. Companies must request NYCIDA assistance prior to entering into any property lease, acquisition or renovation contracts, unless such contracts are contingent upon NYCIDA assistance.

Visit the New York City Economic Development Corporation website to learn more about FRESH financial incentives.

OTHER INCENTIVES

New York Healthy Food & Healthy Communities Fund
Grocery store operators and developers in underserved communities may be eligible to apply for pre-development grants and loans, acquisition loans, equipment financing, and construction and permanent loans through the New York Healthy Food & Healthy Communities Fund. For more information, please visit the Low Income Investment Fund’s website.

NYSERDA Energy Efficiency Benefits
Grocery store operators and developers can independently access energy efficiency benefits through the New York State Energy Research and Development Authority’s (NYSERDA’s) Existing Facilities, New Construction, Energy Audit, and FlexTech programs. For more information, please visit NYSERDA’s website.

FOR MORE INFORMATION

For additional FRESH program details and application information please email fresh@nycedc.com or call 311.