Support of Resolution 141

Testimony to the New York City Council Land Use Committee In Support of Resolution 141, to Create "Industrial Employment Districts"

Brad Lander
Director, Pratt Center for Community Development
September 19, 2006

Chair Katz, members of the committee, thank you very much for this opportunity to present our testimony in favoring of maintaining a diverse economy and good jobs in manufacturing. My name is Brad Lander and I am the director of the Pratt Center for Community Development, a university- based organization that works for a more just, equitable, and sustainable city for all New Yorkers by helping communities to plan for and realize their futures.

We believe that if the City is serious about maintaining and strengthening in its manufacturing sector -- both for the diversity it brings to our overall economy, and for the good jobs it provides to New Yorkers, especially those with more limited education or English proficiency -- then it is essential for the City to adopt the proposed industrial employment district legislation. Morevoer, if we are truly serious about the goals and efforts of the Industrial Business Zones developed by the Bloomberg Administration, which we support, then we must make these zones a true feature of the City's land use system, that will last beyond one particular administration.

As you know, the Pratt Center has been supportive of rezoning efforts to create mixed-income housing in New York City's neighborhoods. We are also deep believers in the importance of thoughtful comprehensive planning to strengthen the city's industrial sector. The "choice" between affordable housing and jobs is false one: we need both, and we can make room for both ... but it will take the kind of serious planning and land use effort made possible by this legislation. In 2000, together with the Municipal Arts Society and the New York Industrial Retention Network, we produced the comprehensive report, Making it in New York: The Manufacturing, Land Use, and Zoning Initiative, which initially recommended this concept. Two of the central conclusions of that effort have since been affirmed by the Bloomberg Administration:

• The manufacturing sector is vibrant and critical part of the New York City economy, and supporting it is good policy. There are 11,000 manufacturing, wholesaling, distribution, transportation and employers making and distributing everything from wontons to windows. These are mostly small- to medium-sized firms, vitally connected to the City's economy, who want to be in the City. They currently employ more than 230,000 people. Supporting these businesses is a smart way to keep the city's economic base diverse, to capture more of the earnings generated by our primary export sectors, and to create good-paying blue-collar jobs, particularly for people who lack high school education and have limited English skills.
• Real estate is the primary barrier to securing a future for manufacturing in New York City. As you know, in the midst of substantial long-term growth, a number of the city's manufacturing zones are seen as prime areas for new high-end development. For the past several years, the actual or potential conversion of land and buildings -- initiated either by individual landlords or by the City through area-wide rezonings -- has created enormous volatility and uncertainty for industrial business owners. They overwhelmingly told the Parthenon Group in 2003 that they wanted the city to end this uncertainty -- not necessarily by keeping every square foot of M- zoned land zoned for industry, but by making it clear where they could be on solid ground and not have to worry about spiking rents and residential conversions. "Just tell us what areas will be designated for industry, and then enforce the zoning there," they said.

We were pleased with the creation in 2005 of the Mayor's Office of Industrial and Manufacturing Businesses, and with its creation of Industrial Business Zones. As you know those zones are designed to strengthen thriving industrial areas by providing some financial incentives, and through a promise from the Bloomberg Administration not to rezone them for residential or commercial use.

However, those efforts simply do not do quite enough to meet their own goals, for two reasons:

1. To speculative developers, who think long-term, a promise by one administration is a fairly short-term and relatively weak form of land use regulation. They understand the City's land use process, and recognize that those land use designations that are written into the zoning resolution and the City's zoning map are deeper and more serious than those that are not. They can afford to make long-term, speculative investments, in the hopes that a future administration will take a more favorable view of their goals to convert industrial space to commercial or residential uses.
2. In the meantime, growing retail, office, and hotel uses undermine manufacturing businesses, drive up rents beyond what many manufacturing businesses can afford, and promote a gradual movement toward rezoning. We see this already with hotel projects proposed for M- zoned areas, designed quite clearly as an effort to get around the zoning rules.

Whether it intends to or not, the Bloomberg Administration is sending mixed signals. Zoning changes anticipated in Dutch Kills, Jamaica, and Gowanus would all likely allow residential conversions in areas adjacent to industrial business zones, which will increase speculative pressure on manufacturing businesses inside those zones.

Or consider Sunset Park. A strong manufacturing area with thousands of jobs, it was recently mapped as an Industrial Business Zone. Unlike the Greenpoint-Williamsburg waterfront, for example, there is a broad consensus that Sunset Park should be preserved for manufacturing -- as part of a broad and long-term balance between the need for additional housing and the need to maintain a strong economy.

However, in the so-called "Garvin Report," commissioned this year by the City's Economic Development Corporation as a foundation for the Bloomberg Administration's strategic land use plan for the City's long-term growth, the Sunset Park waterfront is identified as a area where thousands of housing units could be created. As a result, property owners may well believe that, even if they in the Industrial Business Zone, things will change over the next few years. In the meantime, they may consider displacing their manufacturing tenants in favor of retail, office, and hotel uses that enable them to charge higher rents and gradually make the case for a rezoning.

The City Council is presented today with an opportunity to take the steps that are necessary to preserve manufacturing in Sunset Park, and in other strong manufacturing areas around the city. Create industrial employment districts to preserve and strengthen strong manufacturing districts. I would also urge you to go one step further, and propose mapping the new Industrial Employment Districts as an overlay on the areas recently designated as industrial business zones.

By adopting this resolution, the City Council can help to stabilize rents, prevent conversions, provide long-term security which enables manufacturers to enter into leases and obtain financing, and make sure that New York City continues to offer a home to entrepreneurial manufacturing businesses that strengthen our economy and provide employment to our citizens. Thank you.