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There is Nothing Innovative About Displacement


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Industry City courtyard development (photo: Industry City on Instagram)


Sunset Park is at a crossroads. With one of the city’s few remaining industrial waterfronts in a heavily, working-class Latino-Asian neighborhood, its development looms large in shaping the future of New York City and, dare I say, the city’s soul.

Since the March announcement of a $1 billion investment by Industry City’s owners – a consortium of commercial real estate titans - the most dramatic changes along the waterfront have not been the building upgrades, bicycle racks, summer dance parties, or high-end artisanal purveyors. Rather, it is the stupefying number of speculative sales of industrial real estate.

Jamestown Properties is working hard to rebrand Industry City as a site for cutting edge, modern manufacturers in technology, media, design, and high-value added fashion and food production. The developer is working to placate community concerns that the Williamsburg experience of massive displacement and gentrification will not be repeated.

To this end, Jamestown Properties announced the establishment of an “Innovation Lab” in collaboration with CUNY; Southwest Brooklyn Industrial Development Corporation, which manages Sunset Park’s Industrial Business Zone; and several community non-profit social service and workforce organizations. Largely funded by public dollars, the Innovation Lab seeks to connect the neighborhood’s immigrant, non-English speaking labor force with low levels of formal education to the innovation economy.

While Andrew Kimball’s success at the Brooklyn Navy Yard should reassure us that his expertise is preserving and promoting industrial jobs and small businesses, Mr. Kimball’s employer is no longer a non-profit organization that manages city-owned properties.

The redevelopment of Industry City is not about modern manufacturing. Industry City is a commercial real estate venture and its rezoning proposal will make that crystal clear. Most of Industry City’s 16-building complex is in a heavy manufacturing M3-1 zone which prohibits retailers and hotels (unlike light manufacturing M1-1 zones). Industry City’s “unprecedented” development proposal entails designating a “special innovation zoning district” to permit a hotel, university facility (some say dormitory), conference center, and retailers.

Industry City’s consortium of owners has hired Fox Rothschild LLP to prepare its rezoning proposal. A website search of Fox Rothschild LLP’s recent projects lists one for New York City – Ian Schrager’s ultra-luxury, condo-hotel at 215 Chrystie Street on the Lower East Side.

Referencing the area’s industrial past, Schrager describes his 28-story, Public Hotel project as “refined gritty” and “tough luxe.” While one journalist described this branding as “enough to make you lunge for the barf bag,” the transparent and cavalier manner in which the lives, experiences, and neighborhood spaces of an everyday public, made up of working-class people and communities of color, are erased and then commodified for a new “public” elite is astounding.

Fox Rothschild LLP secured the necessary permits and zoning changes for its client’s “refined gritty” condo-hotel project on a former urban renewal site.

Mr. Kimball’s participation in numerous real estate conferences, including the Commercial Observer’s recent “Brooklyn’s Renaissance” event held at Industry City, has helped fan real estate speculation and small business displacement in industrial Sunset Park.

A late September Crain’s New York Business article announced the sale of two Sunset Park warehouses by New Jersey-based Hampshire Companies. Approximately two years ago, Hampshire Companies purchased the pair of buildings from Brooklyn Commercial Realty Corporation and Commercial Associates LLC for $18.5 million dollars.

At the time of the sale in June 2013, based on my research of the New York State Department of Labor’s database of registered apparel contractors and manufacturers, there were 35 garment shops located at 341 39 Street employing hundreds of workers. These small businesses included Sew Wonderful US Inc., NYC Fashionwear Inc., and MM Pleating & Sewing Inc. Today, Hampshire Companies is selling the “warehouses” for $50 million dollars having made no physical improvements or changes except for the displacement of numerous small business tenants and their employees.

The Hampshire Companies is marketing the pair of industrial buildings, which are located a few blocks away from Industry City, “as conversions to hip, creative office space or residential units.” In addition to Industry City, there are now several new property owners in Sunset Park’s industrial waterfront anticipating a rezoning to commercial and possibly, residential uses. Sunset Park’s working waterfront is being eviscerated by real estate speculators who see great profits in branding the industrial infrastructure as part of an innovation economy district.

In this hyped real estate context, Mr. Kimball will go to extremes to portray Industry City as a site of modern manufacturing. For example, the Brooklyn Flea and Smorgasburg are great additions to Industry City because, according to Mr. Kimball, they have long-served as “a platform for Brooklyn’s makers.”

Sunset Park is at a crossroads and its future depends on Mayor Bill de Blasio and Deputy Mayor Alicia Glen recognizing that protecting industrial and maritime-related jobs and land uses are as critical as affordable housing in sustaining the vibrant, diverse neighborhoods that have always made New York City a place of possibilities for working-class families.

While “Brooklyn players (were) mingling and gnoshing on a lucrative breakfast spread” at the Brooklyn Renaissance event at Industry City, UPROSE and Protect the Working Waterfront Alliance were organizing to save Sunset Park because there is nothing innovative about displacement.

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Tarry Hum is a professor at the City University of New York and author of Making a Global Immigrant Neighborhood: Brooklyn's Sunset Park.

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Have an op-ed idea or submission for Gotham Gazette? E-mail editor Ben Max: This email address is being protected from spambots. You need JavaScript enabled to view it.

The Right Plan for Addressing the Landmarks Backlog


BK Bridge Daniel Avila NYC Parks

The Brooklyn Bridge, in distance, & The Manhattan Bridge (photo: Daniel Avila/NYC Parks)


Meet Backlog95.

Clunky operating system?

Nope – it's a list of 95 historic places before New York City's Landmarks Preservation Commission.

Commission Chair Meenakshi Srinivasan thinks it's time to make some decisions on which will be given historic landmark status – a reasonable position, as some items have been under the agency's consideration since John Lindsay was mayor.

To clear the pile up, Srinivasan put Backlog95 up for debate for the first time in decades. The list includes icons like the Pepsi Cola sign, Green-wood Cemetery, and Coney Island's charming Art Deco Pumping Station.

Beginning at a packed hearing, landmarks commissioners began reviewing research, listening to testimony, and making decisions based on the merit of each property. The plan is to revisit the entire list at the beginning of 2016, with the end goal of clearing the decks of all outstanding properties – one way or another – by December 2016.

But Srinivasan's plan has competition.

Earlier this year, City Council Members David Greenfield and Peter Koo proposed a new bill – known as Intro. 775 – that would clear the backlog using restrictive new rules, including an 18-month timeline and a five-year moratorium on resubmissions to the Commission.

There are consequences to this approach:

Historic landmark designation is a meticulous process, and a timeline encourages bad actors to delay progress in the hopes of dodging landmark designation.

Even the most obvious landmarks can take time to properly research and consider. But under the bill's current timelines and given the way their process unfolded, both Grand Central Terminal and Radio City Music Hall would have exceeded the window for consideration and would have been sent to the back of the class for five years before landmark protection could be reconsidered.

What sounds like a momentary inconvenience is actually a long time to keep the bulldozers at bay. If we are not careful, we could easily lose places essential to our city's history and future.

The bill's proposed moratorium is even more dangerous, as it places the structural integrity of deteriorating buildings at risk for five years once the clock runs out. That's a lifetime for any building facing our city's brutal winters, especially when the Landmarks Commission has no power to ensure historic buildings are protected from the elements.

"This bill seeks to clear the decks – in the crudest possible way – for the destruction of historic fabric," testified one Lower Manhattan resident at a marathon September 9 hearing. Three-quarters of the hundred other speakers agreed.

Nobody wins when the Commission drags its feet. But if the City Council overreacts, New Yorkers risk losing the places and spaces that make our city great.

That's why we support Srinivasan's fix. It's the best upgrade for Backlog95 – and for the city we love.

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Simeon Bankoff is Executive Director of the Historic Districts Council. The organization is on Twitter at @HD_NYC.

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Have an op-ed idea or submission for Gotham Gazette? E-mail editor Ben Max: This email address is being protected from spambots. You need JavaScript enabled to view it.

Albany Transparency and the MTA Funding Deal: Show Us Our Money


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Down a dark tunnel (photo: MTA/Patrick Cashin via flickr)


The big news is that Governor Cuomo and Mayor de Blasio have stopped fighting over who should pay what, and reached a deal to close a huge gap in the MTA's vital $26 billion five-year capital plan. But their story of political conflict and compromise obscures a crucial fact: it's not their money, it's ours. Going forward the public has the right to know exactly what the governor and mayor intend to borrow and spend in our names.

Fully funding the MTA is a must, but New Yorkers are going to be stuck with the bill for the new subway trains and buses long after the governor and mayor have moved on. We need to know what they are getting us into.

So far, Governor Cuomo has refused to reveal a specific funding source for his pledge of an additional $8.3 billion, saying only that the money is coming from "state sources." Based on the State's available sources of funding and borrowing, this means it is highly likely that the State will create a mountain of new debt that the MTA and transit riders will be ultimately responsible for.

The governor has said he does not want to raise new taxes and will not push for the Move NY road pricing plan. The State's bank settlements are already spoken for, and the General Fund will not have anywhere near $8.3B in cash to spend on the MTA over the next four fiscal years, especially if Upstate demands equal funding for its roads and bridges. That leaves borrowing.

The State does almost all of its borrowing by getting public authorities, like the MTA, to borrow on its behalf. The State does this to avoid debt limits and public votes. Therefore, by far the most likely way Governor Cuomo will pay for his $8.3B pledge is by having the MTA borrow the money by selling bonds which the State will pledge to pay for. This is called a "service contract bond."

The key thing about service contract bonds is that the State's commitment to pay for them is not legally binding, and the MTA and transit riders are ultimately responsible for paying bondholders if the State reneges on its commitment. If the state does renege on some or all of the promised payments, the MTA and transit riders could be left holding a very large bag: paying back $8.3B in bonds will cost roughly $500 million a year for 30 years.

Unfortunately, Governor Cuomo has a bad track record with MTA service contract bonds. Since 2013, he has reneged on $70 million in State payments for Pataki-era MTA service contract bonds, and his latest budget calls for reneging on another $60M. Instead of the promised State funds, the Governor used MTA funds for the debt payments.

Admittedly, this is a modest amount of money given the MTA's giant budget, but it shows how easy it is for a Governor to break an old promise. If the Governor is reneging on debt payments in today's prosperous times, what happens during bad times over the next 30 years?

Government transparency can be an abstract idea, but for transit riders it really matters right now. The MTA will borrow billions more to pay for its share of the capital plan, and its debt payments are already a dangerously high share of its operating budget. This debt has translated into more expensive MetroCards and an increasing burden on everyday New Yorkers.

The stakes are high and New Yorkers deserve to know from Governor Cuomo, Senate Majority Leader Flanagan and Assembly Speaker Heastie what the risks and benefits are of service contract bond borrowing and other financing options for the MTA capital plan --- after all, it is our money.

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John Kaehny is the executive director of Reinvent Albany.

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Have an op-ed idea or submission for Gotham Gazette? E-mail editor Ben Max: This email address is being protected from spambots. You need JavaScript enabled to view it.



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