By Katie Poppe | Investor Relations associate

In 2008, the City’s Economic Development Corporation and The Department of Health joined forces to assist the Department of City Planning in a study researching the need for supermarkets and the availability of fresh food in neighborhoods throughout New York.

The report revealed that many low and middle income NYC neighborhoods were underserved when it came to stores providing fresh fruit, vegetables, meat and dairy. These so called “fresh food deserts” are populated by increasing numbers of residents who do not consume sufficient servings of fresh fruit and vegetables and suffer at increasing rates from obesity and diabetes.

Out of this report, the Food Retail Expansion to Support Health (“FRESH”) program was born. The FRESH program aims to provide incentives for the inclusion of grocery stores in new developments in the targeted areas. A map of those areas can be seen here.

Specifically, the program provides two types of incentives: (1) zoning bonus & (2) financial incentives

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The primary zoning bonus provided by the FRESH program is a 1:1 square foot bonus whereby for every square foot of eligible grocery store, a new development can increase its permitted floor area by one square foot. This 1:1 square foot bonus is limited to a total of 20,000 square feet.

Additional zoning bonuses include a reduction in required parking and in M1 districts that would otherwise limit as-of-right stores to 10,000 sf, an increase to 30,000 sf for grocery stores to be as-of-right.

In addition to the zoning square foot bonus, the FRESH program does allow for a height waiver of up to 15 feet. To obtain such a waiver, a City Planning Authorization is necessary. This requires going through an environmental review at the Department of City Planning (to determine the environmental impacts of the additional height) and a public review process that requires a City Planning Commission vote.

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These incentives – which are discretionary and are administered on a case by case basis – include an abatement of land taxes equal to $500 per employee, an exemption of sales tax on materials purchased for constructing, renovating, or equipping the grocery facility, and a deferral of the mortgage recording tax.

The zoning bonus is administered through the Department of City Planning and the financial incentives are administered through the City’s Economic Development Corporation.

As developers look to maximize the value of their projects throughout the City (zoning & financial incentives overlap in Upper Manhattan, much of the South Bronx, northeastern Brooklyn, and part of eastern Queens), the incentives of the FRESH program are worth looking into.

HAP has been approved for the FRESH program in its HAP Ten development in East Harlem, and will partner with Super Fi Emporium to bring quality food to residents in the area.