July 19, 2012 / 2:33 PM / in 7 years

Can urban farming go corporate?

Farms have sprouted in cities across the country over the past several years as activists and idealists pour their sweat into gritty soil. Now Paul Lightfoot wants to take urban agriculture beyond the dirt-under-your-nails labor of love. He wants to take it corporate.

An artist's rendering shows BrightFarms proposed facility in Sunset Park, Brooklyn. REUTERS/BrightFarms/Handout

In June, Lightfoot’s company, BrightFarms, announced a deal with The Great Atlantic and Pacific Tea Co., or A&P, to provide New York City-grown vegetables to the local chain’s supermarkets year-round. The goods will grow in what the company says will be the country’s largest rooftop greenhouse farm, a high-tech hydroponic operation that will boost yields, allowing the company to face-off with organic vegetables trucked from California, cutting thousands of miles from the supply chain while aiming to provide a fresher product at a competitive price.

With similar deals announced for St. Paul, Minn. and Oklahoma, BrightFarms is looking to tap into the local-food zeitgeist nationwide and create a more efficient produce mass-market. With some notable exceptions, urban farms have largely been non-profit, community-based endeavors, aiming to provide healthier food as a public good. The few for-profit operations have been mostly small and local. Lightfoot has grander ambitions.

“We’re not trying to change the fringes of the supply chain,” he said. “We want to change the supply chain itself.”

The idea to grow more food within city limits has spread in recent years along with increased awareness about the quality of our food and where it comes from. Advocates say urban farms can also provide important green-space and, when built on roofs, help reduce energy use and storm-water runoff. In dense cities like New York, with high real estate prices, rooftops represent enticing, unused space. Several cities, including New York and Seattle have revised zoning and building codes to help encourage the practice.

In New York, two startups have already begun growing vegetables from the city’s large commercial rooftops. One company, Gotham Greens, operates a greenhouse similar to the type BrightFarms is planning. The company grows herbs and leafy greens year round, selling to restaurants and grocery stores, including Whole Foods. Brooklyn Grange, which started operating in 2010, runs a more low-tech, open-aired operation. Both companies report modest profits and are expanding to additional, larger roofs.

“New York is really at the forefront of this,” said Kubi Ackerman, of the Urban Design Lab at Columbia University’s Earth Institute. Ackerman released a report last year demonstrating the potential for urban farms to improve access to vegetables in poor neighborhoods in New York. The report identifies more than 2,700 acres of rooftop space across the city that is suitable for agricultural use, arguing that urban and rooftop farms could improve the local environment and benefit public health while providing jobs.

If that sounds too good to be true, it may be. The biggest challenge for urban farms, and particularly rooftop farms, Ackerman and others say, is money.

A couple of years ago, enthusiastic news articles greeted announcements of rooftop greenhouses in San Francisco and Brockton, a Boston suburb, both planned by a company called Sky Vegetables. Today, the company has shelved the San Francisco project and has yet to break ground on the Brockton greenhouse, all for lack of funds.

“Green people don’t write checks so fast in this economy,” said Bob Fireman, CEO of Sky Vegetables. He said he supports BrightFarms’ project, but noted that two years ago, his company was in a similar position. Sky Vegetables is currently building a smaller greenhouse project in the Bronx, which Fireman said will open in Fall 2012. By then, he hopes to have begun building the Brockton greenhouse, which, unlike BrightFarms’ project, is fully approved.

There’s little data on the scale of urban farming, but Ackerman’s report found 15-30 farms in New York, depending on what you count as a farm. Notable non-profit farms have opened in Milwaukee and Oakland, among other cities, but it remains a niche market. A&P said the BrightFarms project will provide enough vegetables to feed 5,000 people, but it only pays to grow high value, highly perishable crops like tomatoes and baby greens.

“I don’t think by any means that these are going to be offsetting big chunks of our food supply,” Ackerman said.

Viraj Puri, CEO of Gotham Greens, also cautioned whether rooftop farming can go mainstream.

“I’m not going to sit here and tell you this is the agriculture of the future,” he said. Urban farming, and rooftop farms in particular, he said, can play a role in creating a more sustainable food system. But Puri is skeptical of claims that it can change the system on its own. “I think everyone’s just drinking the Kool-Aid a little bit,” he said.

It’s also unclear whether urban farming can thrive without public money. Brooklyn Grange’s new project, in Brooklyn’s Navy Yard, benefited from nearly $600,000 in city grants aimed at reducing storm-water runoff, which can overwhelm the city’s wastewater system during heavy rains, sending untreated sewage into waterways. The planned BrightFarms greenhouse, also in Brooklyn, is part of a larger renovation of a vacant warehouse that has benefited from $37 million in tax exemptions, though Lightfoot said his company has not directly received any public money.

The company’s model is “somewhat unique,” Lightfoot said, allowing it to grow bigger and faster than its peers. BrightFarms secures long-term deals with customers like A&P, which he said provides better access to capital markets. The company raised $4.5 million in equity last year, he said, and is aiming for another $6 million this year.

Another question is whether a greenhouse farm provides all of the environmental benefits that urban agriculture advocates hope for. Unless a rooftop greenhouse can tap into waste heat from the building below, heating the facility through New York winters can use as much energy or more than shipping food from California or Arizona, Ackerman said. Lightfoot said the project will still provide environmental benefits, such as collecting storm-water and improving land-use. He hopes to access waste heat from the building, but said it’s too soon to say whether that will happen.

Still, whatever the limitations, urban agriculture advocates say a project of BrightFarms’ scale would only help the movement’s profile and everything it stands for. And, Lightfoot said, turning a profit is the only way to do that.

“I am a capitalist,” he said. “If you really want to change a market you have to have a lot of capital to invest in making these changes happen. And if you want to raise a lot of capital you have to be able to provide returns on the capital.”

(The author is a Reuters contributor)

Editing by John Peabody and Brian Tracey

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