Missing the Market

Surrounded by walls, secured by guards and tucked on the southern edge of the Bronx, the Hunts Point Terminal Produce Market presents a forbidding face, to the extent it’s even visible to the public. But within its gates lies a bustling city within the city, defined by brotherhood as much as business.

Vendors and customers punctuate bouts of buying or bantering over prices with jokes, laughter and, on occasion, singing. The stories of the employees are more often than not sagas of families — generations of fathers and sons who found their way into the frenzy of the market and were hooked for life.

The New York World’s interactive, seasonal map listed the origins and wholesale price of any item in the Hunts Point produce market.

“It’s kind of like a circus, but better,” explained Stu Freed, a buyer for E. Armata Fruit & Produce, where he’s worked for more than a decade.

That circus is now threatening to fold up its gigantic tents. In a move that could leave New York City with higher food prices and fewer fresh choices, the Hunts Point wholesale produce cooperative, consisting of more than 40 vendors, has threatened to move its operations to New Jersey if its landlord, the New York City Economic Development Corporation, does not arrive at a new lease agreement that satisfies the merchants. This will involve addressing one main sticking point: the role of the city’s Business Integrity Commission, which monitors industries known as magnets for organized crime.

In September, after more than a year of negotiations, the twice-extended deadline for an agreement passed with the two sides deadlocked. In October, the city and co-op agreed to yet another extension, set to end on Halloween. Then Sandy stormed in, and progress toward a deal stalled yet again.

The idea that a 45-year-old market that brings in about 60 percent of the city’s fruits and vegetables could simply vacate isn’t as preposterous as it sounds. New Jersey is already home to a number of smaller wholesale produce suppliers, like Riviera Produce in Englewood.

The city has put on the table a $332.5 million redevelopment project that would expand and modernize the Hunts Point produce market, which for lack of storage space currently spills over from roughly a dozen hangarlike buildings into refrigerated truck trailers scattered around the property; it also aims to streamline a tangle of truck traffic and improve food safety. The co-op has agreed to pay half of the $10 million needed for initial planning work, scheduled to begin in late 2013.

Hunts Point is badly in need of a shove into the future. Veterans of the produce market — the men who have worked there for decades, and the ones who used to visit the grounds with their fathers when they were children — have already watched the market fall out of dominance. In 1989, the USDA calculated that Hunts Point handled 75 percent of all the fruits and vegetables entering the region. Now, according to the Economic Development Corporation, it’s just 22 percent.

With the rise of chain stores nationwide, New York City is one of a dwindling number of cities that rely on a central market for their produce. Having dozens of wholesalers vying for customers in one place helps keeps prices affordable, notes Bob Lewis, a longtime marketing representative for the New York State Department of Agriculture and Markets.

“It is still a functioning and competitive market, and that makes it relatively unusual,” he said of Hunts Point.

Most goods arrive by truck, and a significant share originate from agricultural hot spots long distances from the New York region: almonds by truck from California, bananas via ship from South and Central America, kiwifruit all the way from, yes, New Zealand. Other items come from much closer to home. Mushrooms start out in Pennsylvania, as do greens like kale, collard and mustard. Some cucumbers, tomatoes, apples and blueberries come from the New York region year-round. Still, the locavore trend hasn’t yet fully made itself felt at Hunts Point, where low prices reign.

The Hunts Point merchants constantly adjust the prices of their products to meet the trends of the day. U.S. Department of Agriculture employees are tasked with tracking the prices of produce each morning.

On a predawn early-October Friday, watermelons were a hot item for one vendor.

The morning rush of the market is punctuated by rapid exchanges of prices between buyers and sellers:

“This is not good.”

“I know. That’s why it’s $3.”

Such bargaining opportunities are often lost for national chain stores, which have their own distribution systems and procedures.

Whole Foods outlets in New York, for example, are supplied by the chain’s own distribution center, located in Connecticut, along with direct deliveries from local producers and third-party vendors, like organic supplier United Natural Foods, according to a company spokesperson. In October, Whole Foods announced that it would be opening two new stores in Manhattan, in Harlem and the Upper East Side, bringing the total number of locations in the city to nine.

The Hunts Point merchants have felt the rising dominance of chains, which has forced them to a customer base that has shifted away from larger stores and is increasingly dominated by small businesses making scaled-down purchases. These changes are hard on smaller vendors, and a handful have had to close completely, said Arthur DePinto, who works in sales for M&R Tomato Distributors.

“We’re not even on the same playing field anymore,” he said.

The market was once populated by businesses characterized by different specialties. A.J. Trucco — a vendor with roots that go back to downtown Manhattan’s Washington Produce Market of the late 1880s — was mainly an Italian chestnut distributor until a little more than a decade ago, when it added other nuts and fruit into the mix. These days, merchants offer a little bit of everything, and there are fewer vendors overall.

“It’s empty compared to what it used to be,” said Freed.

The remaining clientele pulls from a diverse range of businesses and ethnic groups. Vendors have shifted their merchandise to cater to new demands, like tropical items, which have become more popular as Hispanic communities have grown, said Joe Palumbo, the CEO of Top Banana.

Joe Fierman, who sells from a window at Fierman Produce Exchange — a business that also employs his two uncles and two cousins — said he has picked up Korean and Spanish along the way.

“It’s not your everyday office job,” he said. “This is all street knowledge.”

But the street has become more orderly in recent years. The city’s Business Integrity Commission monitors industries with a history of organized crime, the food wholesaling business included. The commission employs about 10 agents who operate out of an office near the markets, tasked with checking IDs, issuing citations to idling trucks, and generally keeping an eye on things.

Vendors must undergo an extensive application process detailing their financial, tax and criminal histories and shell out a $4,000 registration fee before they are allowed to operate at any of the Hunts Point markets or surrounding areas. Reviews of those applications take months. Companies loading or unloading trucks must be licensed as well, and everyone working at the markets is required to apply and pay for a photo ID.

In the past year, the Business Integrity Commission has denied a handful of applications to wholesale businesses attempting to set up shop in the area adjacent to the Hunts Point Terminal Produce Market because of alleged ties to organized crime — among them River Produce Corp. and ADJ Produce, a successor of C&S Produce, which had previously been denied registration for the same reasons. In September, the commission closed another wholesale company, Jaraq Produce, for operating without proper registration.

“BIC’s role is to ensure that the city’s wholesale markets are competitive and free of corruption,” said Shari Hyman, the agency’s commissioner and chair, in an emailed statement. “We ensure that businesses play by the rules so that everyone has an open and fair marketplace. Most businesses in the city’s markets are run honestly, and as our recent investigations demonstrate, BIC’s work helps them prosper.”

Many wholesalers have a less positive view of the commission, and are holding off on a lease renewal until it becomes less meddlesome. The agency sometimes goes beyond simply ferreting out criminals and intrudes on legitimate companies’ ability to operate, contends Matthew D’Arrigo, co-president of the produce market’s cooperative board. He charges that inspectors interfere unnecessarily in various aspects of business, from traffic management to clean-up procedures, and makes the market less inviting to customers.

“It’s supposed to be like walking into Macy’s,” he said.

D’Arrigo acknowledged the commission has been less intrusive since the lease negotiations began last summer, but he and his fellow vendors are still wary about the power the commission could wield in the future, after the cooperative is locked into a lease agreement. 

If the city and wholesalers can’t reach an agreement, they’ll leave on the table $172.5 million in city, state and federal funding already secured for the market’s redevelopment. The market outgrew its facility years ago and is facing competition from a new wholesale produce market that opened in Philadelphia last year, which bills itself as the “world’s largest fully-enclosed, fully-refrigerated wholesale produce terminal.”

Bringing the market into the 21st century will be central to the future of food in New York City, according to Karen Karp, president of food and restaurant consulting firm Karp Resources. The role of the market in upcoming decades will be more important than it was in the past, she says, as the city’s population continues to increase. The produce co-op established the entire Hunts Point area as a food distribution center in the first place, she noted, and a move away would leave the other wholesale businesses there stranded.

“It’s a little bit like what happens when a department store leaves a mall,” she said.

Supermarket chains have located their distribution centers outside of New York, but small business and bodega owners continue to rely heavily on Hunts Point. They can go to a supplier like Jetro for some items, but there is no equivalent produce wholesaler. If the market were to move to New Jersey or go away completely, it would be a huge setback for those grocers and the neighborhoods they serve.

“It just can’t happen,” she said.

This story originally appeared on The New York World.