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Hunts Point negotiations remain at a standstill

Stand inside at one end of any of the four main rows of the Hunts Point Produce Market and look toward the far end. You will be looking into one-third of a mile from where you stand. There are four such rows, in addition to two smaller units at the market. It sits on 113 acres in the South Bronx section of New York and has 1 million square feet of interior space. The market opened in 1967.

About two decades ago, the market began operating as a cooperative with an elected board of directors representing the approximate 50 produce companies whose businesses are on the market.

Produce that runs through Hunts Point comes from around the world and across North America by plane, train, boat or truck, and that produce then goes to about 23 million clients, primarily in the Northeast.

Hunts Point, which also houses the Fulton Fish Market, is the largest food distribution center in the world, with revenues exceeding $2 billion annually.

Tenants in the facility and building management have worked hard over the years to keep the interior and exterior spaces updated. But after more than 45 years, tenants and their clients are facing new food-safety and traceability requirements.

Cold storage in the building is inadequate, causing many tenants to keep refrigerated trailers running at their docks to compensate. There is also a major need for additional space.

Rebuilding, renovating or moving the terminal market to a different location have been ongoing themes resulting in negotiations with New York City over the past decade. And in the past year, many thought that a final solution was close at hand.

New York City, which owns the land, has been negotiating with the cooperative in a plan to rebuild. But a couple of years ago New Jersey decided to make a bid to have the terminal market relocated there.

Last year, New York City and the Hunts Point board of directors agreed to cease negotiations with New Jersey or any other outside parties for a specific period of time to allow negotiations with the city to proceed.

On Sept. 5, The New York Times reported that the market finally got the subsidy it wanted from the Bloomberg administration to revamp and expand its longtime home in the Bronx.

But there is something else that the cooperative wants, aside from the $172.5 million in cash and tax breaks from the city: The Hunts Point Terminal Produce Cooperative notified city officials that it had reached an impasse over the continuing role of the Business Integrity Commission, a city agency created to root out organized crime in the carting industry. The produce operators say that the commission has overstepped its authority and is interfering with business by setting operating hours and showering delivery and storage trucks with parking tickets.

The Times' story further noted that the cooperative has not broken off talks with the city, but it said in a letter to Seth W. Pinsky, president of the city's Economic Development Corp., that it was "discontinuing the exclusive negotiations with the administration."

"They feel they have an open-ended power to oversee everything done by the management of this market," Matthew D'Arrigo, co-president of the cooperative, said in an interview with the New York Times. "We fundamentally disagree. Their mission begins and ends with organized crime."

Mr. D'Arrigo said that cooperative members did not want to abandon Hunts Point for New Jersey, but they believed that the commission had usurped the cooperative's role and had created an intolerable situation. The wholesale market makes about $2.3 billion in annual sales and employs more than 3,500 workers.

Matthew D'Arrigo told The Produce News earlier this month that "all is quiet on the Hunts Point negotiation front," noting that the cooperative had not met with New York City officials for a couple of months, and that at the last meeting the city had pitched its deal to extend the cooperative's lease at a fairly advantageous rental term.

"But basically there has been no movement on our main concern, which is the relationship between the market and the Business Integrity Commission," said Mr. D'Arrigo. "The city made it clear that they were not going to move on the issue at all in our direction, and so we did not feel the inclination to continue with the rental deal that they proposed — or the extension lease deal — to be exact. And so now we're free to do what we want."

Mr. D'Arrigo expressed disappointment that negotiations are now at a standstill.

"Things are very quiet regarding negotiations, and for the moment we are working on things that we should be working on — our businesses," he said. "Still, where and how this all ended is a bit disappointing because there was a tremendous amount of work done by both the city government and the cooperative. I suspect that the city is equally disappointed that a deal was not made."

Despite the disappointment on both sides of the negotiating table, Mr. D'Arrigo said that he feels that the city fundamentally has the wrong idea regarding those who work in and run the market for the merchants.

"For them to even think that we would ever take the deal that they're offering, regardless of what the financial terms were, if there was not a corresponding change in terms of the Business Integrity Commission, is absurd," he said. "My main fear has always been that they were just not getting our message about this, and I don't believe they gotten it yet."