Atop an industrial building in Greenpoint, Brooklyn, the crew at Gotham Greens can harvest the equivalent of six acres of salad greens and herbs without getting their hands dirty. Bibb lettuce, basil and other leafy plants spout from a stream of recirculated, nutrient-rich water in the company’s 15,000-square-foot hydroponic greenhouse.
The process actually uses 20 times less water than a soil-based farm, according to Viraj Puri, Gotham Greens co-founder and CEO. “It’s a very efficient, productive way to grow,” he said.
Mr. Puri and his partners are confident that Gotham Greens hyperlocal business model will help change the way New Yorkers get their veggies. “We can harvest something in the morning and have it on the supermarket shelf or restaurant plate that same afternoon,” he said. “That is very compelling for retailers and chefs.”
For consumers here, “local” produce has meant fruits and vegetables from farms upstate, on Long Island or in New Jersey. Urban farmers are trying to shift that expectation.
Gotham Greens, with 25 employees, had its first harvest in June. Two soil-based operations—Eagle Street Rooftop Farm, in Greenpoint, and Brooklyn Grange, in Long Island City, Queens—have started up within the past two years, selling their crops to restaurants and markets throughout the city.
Prove the model
But it remains to be seen whether these rooftop farms can compete in a system dominated by national growers.
“They will have to prove the economic model and show that they can deliver at a lower cost,” said Christian Haub, chairman and president of Emil Capital Partners and former executive chairman of AP supermarkets.
The cost of a hydroponic rooftop is about $2 million to $2.5 million, says Paul Lightfoot, CEO of Manhattan-based BrightFarms, a firm that finances hydroponic outfits.
Though Mr. Puri would not disclose startup costs for the 0.3-acre farm, he said it was financed by himself, co-founder Eric Haley and managing partner Jennifer Nelkin, with help from bank loans and private investors.
The urban farm’s strategy is to focus on growing items that are highly perishable and expensive to ship. “Food goes bad while people own it,” Mr. Lightfoot said.
Eagle Street co-founder and head farmer Annie Novak says keeping labor costs low is essential to its success. The 6,000-square-foot farm relies on volunteers, apprentices and a partner organization, Growing Chefs, to assist its four paid employees.
The farm focuses on leafy greens and herbs, which provide the best return, says Ms. Novak. “An herb is perfect, because it has a high price and requires zero labor,” she said.
Eagle Street breaks even on crops, with annual revenues of about $1.25 to $1.50 a square foot. The business makes an additional $2,000 from sales of T-shirts and nonperishables such as honey, Ms. Novak said. Building owner Broadway Stages paid for the $60,000 roof, which was designed and installed by New York-based Goode Green. The cost—amounting to about $10 a square foot—was significantly lower than that of many similar projects.
Because Gotham Greens can achieve a denser yield and harvest year-round, Mr. Puri forecasts first-year revenues to be higher “by a factor of hundreds” than those of the average soil-based rooftop farm.
Demand for Gotham Greens items already outstrips supply. Mr. Puri is in talks to open another Brooklyn facility next year and expects to establish several more in the next five years.
“We definitely have plans to scale up,” he said.
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