City Council will hold a hearing on the collapsed $650 million Hunts Point Produce Market deal

The City Council plans to hold an oversight hearing on why a roughly $650 million plan to modernize the Hunts Point Produce Market in the South Bronx fell apart, Gothamist reported. The hearing has not been scheduled yet.

"We're having a hearing on it because we believe this project is mission critical," Speaker Julie Menin said Thursday on WNYC's "The Brian Lehrer Show," adding that the Council wants the administration, the federal government and the market to work out a solution. Council Member Virginia Maloney, who chairs the Economic Development Committee, said she would chair the hearing.

What was supposed to happen

The city owns the more than 100 acres where the market operates. Its warehouses date to the 1960s and lack enough refrigeration, so roughly two dozen operators rely on about 1,000 diesel-powered refrigerated trailers on the site, according to Gothamist. In the South Bronx, one in five children develop asthma.

Former Mayor Eric Adams announced the plan on Dec. 30, one of his last days in office. It would have replaced four existing warehouses with two new buildings, eliminating the need for the diesel trailers, The Real Deal reported, putting the cost at more than $635 million. Construction was slated to begin in late 2026, and Aurora Contractors and Primus Builders had been conditionally selected for the design-build work.

Why it fell apart

The Hunts Point Terminal Produce Cooperative, which runs the market, voted the plan down over the summer. In August, Council Member Justin Sanchez told NY1 the sides were several million dollars apart on a lease, with the city seeking to raise rent from $4 million to $14 million a year. A co-op spokesperson said the redevelopment plan itself was the problem, because it would not have let operators keep up their volume of produce during construction. The market has 26 businesses and supplies about a quarter of the city's fresh produce, according to the city figures NY1 cited.

The funding package included $145 million in federal grants and a $225 million loan from the U.S. Department of Transportation, which has since removed Hunts Point from its list of funded projects, Gothamist reported in September. Some former officials have pointed to the nearly seven months it took Mayor Zohran Mamdani to appoint a head of the Economic Development Corporation.

Mamdani has blamed his predecessor. "The term 'deal' is an overstatement," he said this month, arguing the framework would have renewed the existing lease if it was rejected and weakened the city's leverage. He said the city is looking to "create a new path forward" but did not address the federal funding.

What officials are saying

Sanchez, who represents the area, called the project "the most significant environmental justice investment in our city." City Comptroller Mark Levine told Gothamist that running 1,000 diesel trailers around the clock as refrigeration is not acceptable. A market spokesperson did not respond to Gothamist's request for comment this week.