Contact: Colleen Roche (212) 788-2958 or Dwight Williams (212) 788-2972
The Mayor will submit legislation to the New York City Council which would authorize the City to regulate all of the City's public wholesale food markets in the same manner that the City now regulates the Fulton Fish Market. Under the proposed legislation, the City will be authorized to conduct full background reviews and to license both individuals and businesses on "fitness" standards in order to do business in the City's public wholesale food markets. In addition to the Fulton Fish Market, the City's other major public wholesale markets include the Hunts Point Produce Market in the Bronx, the Gansevoort Meat Market in lower Manhattan, the Brooklyn Wholesale Meat Market and the Brooklyn Terminal Market.
The legislation will be sponsored by Speaker Vallone, and Council members Kenneth Fisher, Jerome O'Donovan and David Rosado, all of whom attended today's announcement.
Mayor Giuliani said, "We now have a model for reform that we are successfully implementing at the Fulton Fish Market and in the private carting industry. Through this initiative we aim to address the corruption problems that have historically plagued our City's public wholesale food markets, to increase competition there, and to reduce consumer costs. That's a 'win-win' situation for honest businesses and consumers."
Speaker Vallone said, "We support this initiative, the intent of which is to increase competition, lower costs and root out corruption. We are very pleased that all sides involved -- from the City and law enforcement officials to the wholesale operators -- have cooperated in this endeavor."
Also supporting this proposal at today's announcement were Manhattan District Attorney Robert Morgenthau, Bronx District Attorney Robert Johnson, Brooklyn District Attorney Charles Hynes, U.S. Attorney Mary Jo White of the Southern District of New York, U.S. Attorney Zachary Carter of the Eastern District of New York, New York City Police Commissioner Howard Safir, and James Kallstrom, Special Agent in Charge of the Federal Bureau of Investigation's New York City Field Office or their representatives.
Under this legislative proposal, the City's Commissioner of Business Services, whose department regulates public wholesale food markets, will be authorized to:
This initiative, like the Fulton Fish Market plan, will involve a task force of City agencies, including the Department of Business Services, the Department of Investigation, the New York City Police Department, the New York City Economic Development Corporation and others. Because the resources for this initiative will come from participating City agencies, the initiative will not require any new City resources.
Among the City's public wholesale food markets, the Hunts Point Produce Market in the Bronx is by far the largest, with 65-70 wholesale businesses operating more than 270 store stalls, 4000 to 5000 employees, and $1.2 - 1.5 billion in annual gross revenues. It is the nation's largest wholesale produce market. The Gansevoort Meat Market in lower Manhattan has approximately 80 wholesale businesses, 1000 employees and $700 million in annual gross revenues. The Brooklyn Wholesale Meat Market has approximately 25 wholesale businesses, 300 employees and $300 million in annual gross revenues, and the Brooklyn Terminal Market has approximately 36 wholesale businesses, 1000 employees, and $400 million in annual gross revenues. Over the past decade, law enforcement officials have investigated and prosecuted racketeering and other corrupt practices at each of these markets.
Mayor Giuliani also today announced that Hunts Point Produce Market consummated a new 15-year agreement with the Hunts Point Cooperative Association that provides for: increased rental revenue for the City; the Cooperative's repayment of rent arrearages; and outstanding utility obligations; the City's commitment of capital funds to renovate the Market's existing facilities; and the Cooperative Association's support for the regulatory reforms embodied in this new legislative proposal.
Under this agreement, the Cooperative Association, which represents the Hunts Point Produce Market's wholesalers, will have to pay $4 million per year in rent, to be phased in over the next four years. The Cooperative Association paid only $2.4 million per year for at least the past six years and failed to pay any rent increases. Its rent will immediately increase to $3.1 million and increase annually up to $4 million after the fourth year, with subsequent increases thereafter tied to a wholesale market price index. To settle past arrearage issues, the Cooperative Association has agreed to pay the City an additional $1 million in outstanding rent and at least $600,000 and as much as $1.6 million in outstanding utility bills (the precise amount to be determined in binding arbitration). Moreover, the City will be receiving $1 million in rent arrearages from the adjoining Hunts Point Meat Market.
In addition, the City has agreed to spend $25 million to make capital improvements at the Hunts Point Produce Market over the next five years in a long-term commitment to that market's future. That capital funding is already provided for in the City's capital budget, as recently passed by the City Council.
Finally, in the spirit of cooperation that marked these negotiations, the Hunts Point Cooperative Association has agreed to support the regulatory reforms embodied in this new legislative proposal and to permit the City to license businesses and individuals working at that market on "fitness" standards of "good character, honesty and integrity."