The Real Deal New York

FreshDirect secures $85M in EB-5 financing for Bronx distribution center

The New York City Regional Center provided the funding
By Miriam Hall | April 04, 2017 03:00PM

An early rendering of 2 St. Ann’s Avenue
(Credit: Cybul Cybul Wilhelm Architects)

UPDATED, 7:12 p.m., April 6: Online grocer FreshDirect secured $85 million for its Bronx distribution center, according to documents filed with the city this week.

The financing for the online grocer’s planned outpost at 2 St Anne’s Avenue in Port Morris comes from the New York Regional Center, which provides EB-5 financing. The funding is comprised of several smaller mortgages and replaces a $42.5 million construction bridge loan, issued by Signature Bank in 2015.

Typically, EB-5 funds are provided as mezzanine loans and therefore do not always show up in property records.

In 2013, FreshDirect received $87 million in subsidies from the city to move its headquarters from Queens to the Port Morris site. The company acquired a leasehold for parcels at the site from Harlem River Yards Inc., a joint venture led by developer the Galesi Group, which acquired a 99-year lease from the city in 1991.

A community group called South Bronx Unite had tried to stop the company’s move, arguing trucks would pollute the area. The lawsuit was ultimately unsuccessful, and construction for the center started in 2014, Crain’s reported at the time.

The EB-5 program provides green cards to foreign nationals who invest in job-creating projects. Last month, The Real Deal examined how the scheme will fare are under the Trump administration.

Representatives from the New York Regional Center and FreshDirect could not be reached for comment.

Correction: An earlier version of this story misstated the amount of previous loans.