In 2012, Fresh Direct, a grocery-delivery service that serves wealthier customers, threatened to relocate its new warehouse from Queens to New Jersey. In response, the New York City Economic Development Corporation (EDC) granted Fresh Direct an $87 million subsidy to instead relocate its warehouse to the South Bronx waterfront.
Public opposition erupted immediately. South Bronx residents, including the group South Bronx Unite, launched a campaign to oppose the move, due to concerns over increased air pollution and traffic, restricted waterfront access, impact on local businesses, and Fresh Direct’s history of unfair labor practices. Critics pointed to the EDC’s long history of handing out public money to large corporations to operate out of New York without binding guarantees that their developments would provide long-term job opportunities or living wages for their workers.
Despite the opposition, the project broke ground in 2014, as the NYCEDC granted Fresh Direct a total package of nearly $128 million in tax breaks, grants and loans to entice it to operate out of the Harlem River Yard, south of East 132nd Street.
Now, however, Mayor Zohran Mamdani has signaled that the EDC under his administration will take a new approach to development, starting with opening five city-owned grocery stores, one in each borough.
At a July press conference, Mamdani described how the NYCEDC will subsidize the N.Y.C. Groceries program with $70 million in capital funding for the construction and fit-out of these stores, to be located on property owned by the city and operating with mandates for lower prices. Mamdani’s decision to use the EDC as a tool to provide cost-effective public options for New Yorkers, rather than as an agency that subsidizes corporate interests, could turn out to be a very different application of public money.
Origins of the EDC
The Economic Development Corporation was created in 1991 as a quasi-governmental agency to arrange public-private partnerships for development projects that aim to create jobs and capital investment in New York City. Its approach relies heavily on government subsidies to the private sector, such as discretionary tax incentives, low-cost bond financing, and federal tax credits, in the belief that this investment will eventually bring jobs and economic security.
The EDC touted the Fresh Direct project as successful for preserving jobs in New York, even though it did not lead to substantial job growth. “You see a lot of fuzzy accounting when it comes to what benefits are actually coming out,” said Avi Garelick, coauthor of “Abolish the EDC,” a 2021 article in New York Focus that criticized the EDC for deals that “avoid democratic control over what should be public money” and “allow already wealthy lessees to underpay the city for valuable property.”
Mamdani’s decision to use the EDC as a tool to provide cost-effective public options for New Yorkers, rather than as an agency that subsidizes corporate interests, could turn out to be a very different application of public money.
“What we have learned over time is that when public investment just focuses on growth and jobs, the distribution of that public investment does not lead to material, economic gains for most people,” Anisha Steephen, a member of Mayor Mamdani’s economic development transition team, told The Indypendent. “I think we’ve neglected that the public [sector] should be working on behalf of the people.”
The EDC operates as a state-created nonprofit 501(c)(3) corporation and not an official branch of city government. Thus, as a nonprofit, it is not beholden to the city’s procurement rules. It derives its budget from managing all revenue-generating city-owned land, such as the Brooklyn Army Terminal and swaths of Times Square. With over 64 million square feet of real estate in its portfolio, a reported $1.1 billion in total operating revenue in 2025, and around $6 billion spread amongst its capital division’s 100 active projects, the EDC has immense power in dictating development across the five boroughs.
Despite the EDC operating with a high level of autonomy from city government, the mayor does have substantial power in shaping its leadership. Garelick described it as “the mayor’s private company,” saying that “he controls the hiring and the board and the CEO, and besides that, it’s basically structured like a private company, so it doesn’t have all the checks and balances of a government agency.”
In July, after months of speculation, Mamdani appointed former deputy mayor Anthony Shorris as CEO and president of the EDC and former Federal Trade Commission chair Lina Khan as chair of its board of directors.
Shorris, who brings more than 40 years of experience in government, nonprofit institutions and the private sector, noted at the press conference that “the direction, the vision is going to be the mayor’s vision, and my guess is that may change some of the direction of the EDC.”
Lina Khan fought corporate monopolies as the head of Biden’s Federal Trade Commission. She is now the Chair of the Board of the NYC Economic Development Corporation.
As President Joe Biden’s FTC chair, Khan challenged powerful corporations by pushing for antitrust laws and antimonopoly enforcement. The EDC board has historically been helmed by leaders from real estate or banking backgrounds. “Having Lina [as] the board chair [is] a really good signal that it’s not going to be business as usual at the EDC,” Steephen says.
Mamdani’s Grocery Stores
Mamdani’s municipal grocery-store plan presents an early test for how the EDC could invest public resources to bridge the gap between high operating expenses for grocers and affordable, accessible prices for customers, in a city where rising food prices are outpacing income growth.
This program will be implemented through a partnership between the city and private grocery-store operators that will have a mandate for lower prices and be open to all New Yorkers. The stores will price select items in the “core basket” 30% below market rate, but will allow for price increases as the market changes. The discounted items will include produce, meat, seafood, deli meats, yogurt, cheese, milk, eggs, butter, tofu, pasta, sandwich bread, cereal, canned tuna, soup, non-hydrogenated cooking oil, nuts, rice, flour and legumes.
Erion Malasi, a leading national expert on public-option grocery stores and the Illinois director of policy and research at the Economic Security Project, views the core basket of goods as advantageous for addressing grocery affordability. “The municipality running a grocery store can get really specific and respond to community needs about what they are discounting and what they’re offering at a higher price to ensure people get exactly what they need,” he told The Indy.
The first two locations will be in Hunts Point in the Bronx and La Marqueta in East Harlem, both historically food-insecure neighborhoods. The other three will be in Brooklyn, Queens, and Staten Island. The program will fund “affordability payments” to operators in order to sustain the 30% discount on the core basket.
Dr. David Ortega, a professor of food economics and policy at Michigan State University, calls for transparency in the affordability payments and the benchmark used to define the 30% below-market discount. He notes that the EDC will pay “part of the food bill on the shopper’s behalf, with tax dollars,” so these numbers are important in determining how much shoppers will actually save.
However, as the city calls for operators to provide an estimated annual payment in their Requests for Proposals, a concrete number has yet to be provided publicly. The city is accepting bids from experienced food-retail operators to manage one of the five stores until October 16, but so far none have been named yet.
More Than Hoping for the Best
Malasi believes that utilizing taxpayer dollars to subsidize a program that offers a public good, such as grocery affordability, can be beneficial when larger crises beyond New York’s borders arise, such as COVID or the slashing of SNAP benefits. Throughout his work with the Economic Security Project, he has emphasized the importance of public options, which are government-run programs that deliver the same services offered on the private market.
Malasi believes that utilizing taxpayer dollars to subsidize a program that offers a public good, such as grocery affordability, can be beneficial when larger crises beyond New York’s borders arise.
He says, “I think the beauty of a public option is that there are taxpayer dollars at play, and when the community is in need… we can make decisions to support our people through those crises, using our tax dollars in an extremely effective way, rather than just offering tax credits to corporations and hoping that they care enough to take care of our communities.”
In addition to subsidizing the core-basket items through affordability payments, the NYCEDC will provide the capital support, low-cost or no-cost rent, and property-tax relief for all grocery-store locations, according to the EDC. These measures will greatly reduce the operating expenses that often prevent grocery stores from lowering prices.
In “Zohran Mamdani’s Promise and the Reality of Supermarket Prices,” an August article in Vital City, Dr. Ortega discussed the national and global forces that determine the price of groceries on the shelf. The “EDC’s advantage is not that it can control the price of food,” he told The Indypendent. “It is that it can solve some of the local problems that make grocery retail expensive in New York. It can provide and prepare public sites, run a competitive process for experienced operators, help coordinate development, and use the contract to require a discounted core basket.” Dr. Ortega maintains that the city grocery stores should be understood as a place-based intervention, not as a sweeping citywide solution to food prices.
When the N.Y.C. Groceries plan was announced earlier this year, Mamdani’s administration framed it as a complement to other retailers and benefits, such as SNAP, and not a standalone solution to grocery affordability or food insecurity. As federal programs like SNAP, which provide aid for low-income people to buy food, are slashed by the Trump administration, city-led initiatives can address these shortfalls.
Two, Three Many Public Options
The N.Y.C. Groceries initiative provides a glimpse into how the NYCEDC can be reoriented to provide economic development for a public good. Merici Vinton, coauthor of the article “NYC’s Economic Development Corporation Can Build Public Options,” published in Jacobin this May, said in a statement that the infrastructure for building out the public option already exists through the EDC’s control over various commercial enterprises, such as the New York ferry system, the Hunts Point produce market, and the city-owned land in its portfolio. She observed that “what’s been missing is a mayor with a different theory of what all that power is for.”
In her article, Vinton envisions the various ways that Mamdani can utilize the EDC to fund the buildout of broadband in public housing, equip small businesses with payment infrastructure, or build heat pumps or green infrastructure across New York. She says that wielding the power of the EDC will lead to “everyday New Yorkers [seeing] lower prices, better services, and a city government that’s responsive to its people.”
Malasi argues for a similar transformation of the EDC. “The role of government in providing for our families is one that is a reckoning long in the making, and I’m glad that we’re finally having conversations about what to do with our tax dollars, and how we make life better,” he says.
Now, with Lina Khan and Anthony Shorris at the helm of the EDC, the agency could redirect its approach to economic development toward utilizing public investment and the city’s real-estate portfolio to benefit everyday New Yorkers. Steephen, who worked at the EDC during the Bloomberg administration, acknowledges that altering its vision for public investment is a monumental undertaking, but says Mamdani’s administration is “the first that I’ve seen that has taken a true step to change the mission and value through the idea of a public grocery store.”
Steephen contends that economic equity should be at the forefront of the EDC’s vision. By providing city land and resources when investing in programs, policies, and real estate, they hope that under Mamdani’s administration the EDC will rethink some of the tools that it has and make sure “that they are not exploited or captured by actors that are not really supporting good jobs with good wages, but are providing opportunity for New Yorkers where the benefits of the city’s investment are not broadly shared and felt.” It’s time, that is, for the EDC to benefit everyday New Yorkers directly, rather than through the conventional trickle-down model.
Anthony Shorris is the new president and CEO of the NYC-EDC (Photo credit: Mayoral Photography Office).
Specifically, Steephen hopes to see a change in how the city conducts real-estate transactions, and that it will take a more direct approach to assisting small businesses through real estate and public investment, much as the EDC has supported big business in the past.
In the past, both the city government and the EDC prioritized making economic development easier for the private sector, but “if we spent enough time thinking about the challenges of everyday New Yorkers,” Steephen says, “I’m sure there would be [even more] brilliant ideas.”
Dining and Cooking