Fantasy Island

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Driving along the lonely waterfront of Staten Island, Reverend Calvin Rice remembers the manufacturing mecca that was. Rice, who used to work at the massive Procter & Gamble soap factory at Mariners Harbor, made this drive every day for 15 years. The waterfront was a different place then.

“At its heyday, in the early 1980s, you could just feel the activity riding through here,” he says. “The factory employed about 2,000 people at its prime.”

Though it’s hard to picture now, this desolate stretch of road was a harbor of possibilities for Staten Islanders. “I started out stacking boxes,” recalls Rice, who eventually rose to become an accountant. “That’s the kind of opportunity that places like this offered. I went to school, and they paid for it. The average person at Procter & Gamble was just a high school graduate, but they were able to make $30,000 to $35,000 a year.”

Now, there are few signs of life left. Nearly nine years after Procter & Gamble left New York, its 900,000-square-foot complex is a ghost town. The road is lined with junkyards, rotting dry docks and long-abandoned factory buildings.

The grim state of Mariners Harbor was enough to turn Rice, who now leads the borough’s largest African-American congregation, into an unlikely booster for industrial development. “Everywhere else in the country I’ve been that has this much waterfront has been developed into something that generates money and brings in jobs,” he says bitterly. “Here, there’s nothing. There’s a tremendous need for employment in these areas. And no one’s doing anything about it.”

To most New Yorkers, Staten Island is a punchline, notable for its Mafia dons, soccer moms and the Wu-Tang Clan. But for Rice, and for the manufacturers and developers clamoring to rebuild northern Staten Island, it’s no joke. As industrial developers get squeezed out of New York City by high rents, Staten Island has become the promised land–the place with, if nothing else, space. It’s the city’s untapped real estate frontier, with 70 percent of all the open manufacturing turf left in the city.

Five years ago, Staten Island economic development officials came up with a plan to capitalize on the borough’s status. They decided to develop a Mariners Harbor industrial park for roughly 50 manufacturers, bringing about 1,500 blue collar jobs to one of the borough’s poorest areas. They got the support of elected officials, and rounded up $4 million in federal and state money.

Then earlier this year, the project hit an unexpected snag: the city’s Economic Development Corporation (EDC). This powerful half-billion dollar agency, in charge of creating jobs and cultivating businesses in New York, stepped in with its own plans for Mariners Harbor–ones that probably won’t create as many jobs and may not even happen. It has put that land in limbo, a hiatus that could kill the locally grown project or delay it until its funding evaporates.

EDC wasn’t acting out of borough snobbery. City economic development officials have showered this Republican stronghold with a total of $150 million for glitzy projects like a new minor league baseball stadium, a new museum, and a major facelift for the St. George ferry terminal. Instead, say economic development policy experts, city planning watchers and local development officials citywide, Mariners Harbor is just one version of a story playing out all over New York. Throughout the city, economic development officials are fumbling, deflecting or outright sabotaging the projects that would bring the city’s industrial base back to life.

Rather than give industrial projects like Mariners Harbor a hand, the EDC–which has a stranglehold on public development in the city–has consistently backed only deals that both generate big headlines and please the powerful companies and developers that lobby City Hall. This big-ticket economic development strategy means that the city pours money into commercial, retail and luxury housing developments, or into sexy projects like the movie sound stage at the Brooklyn Navy Yard. Small, low-glamour businesses like manufacturing are not even a consideration.

“The people in City Hall only see two sectors: luxury housing and office-based industry,” says Columbia University urban planning professor Elliott Sclar. “They look at industrial land as underused land. They choose to spend money on larger projects that are visible to the Manhattan media.”

The manufacturers left in New York–there are approximately 10,600 firms–are mostly small to medium-sized. Most are outside Manhattan. Most don’t know how to lobby, or are simply too small. And most are losing out. Because by the city’s reckoning, in the millennial economy manufacturing just doesn’t make muster.

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Manufacturing and industry are still crucial parts of the city’s economy, employing more than 260,000 people–roughly 100,000 more than the number employed by securities and commodities brokerages combined. These jobs, in everything from sequin manufacture to bean-canning, usually offer better wages and more opportunities than retail or service jobs.

But in these boom times, hundreds of small and medium-sized manufacturers that want to expand can’t find the space. Industrial vacancy rates in Brooklyn and Queens have plummeted by more than 30 percent during the past four years. Real estate agents confirm that prime industrial neighborhoods like Long Island City, Greenpoint, Sunset Park and Hunts Point are all at capacity.

So Staten Island, with nearly 2,000 acres of vacant industrial land, has become a draw. Howard Berger, for one, says that he tried to find a home in the borough. Since 1972, Berger has been running his 75-employee hardware distribution firm in East New York, distributing everything from hammers and shopping carts to toilet seats and doorknobs. But he needs more room–about 300,000 square feet in a modern building with high ceilings.

Staten Island looked like the best place for him to find that space, but otherwise ideal sites there required substantial environmental cleanup. “What we wanted just didn’t exist on Staten Island,” says Berger, who has since decided to build in Cranberry, New Jersey.

At the same time, North Shore neighborhoods like Mariners Harbor, New Brighton and Park Hill suffer from high unemployment and little opportunity. Reverend Rice says that these predominantly minority neighborhoods haven’t been the same since the island’s major manufacturers–Procter & Gamble, a building materials manufacturer called U.S. Gypsum, and Nassau Smelting–left town.

“When they left, you’d see people that would normally be working standing on the corner because there were no more opportunities for them,” Rice reports. And according to Rice and others, Staten Island’s North Shore has also seen an influx of Mexican, Nigerian, Chinese and Albanian immigrants seeking jobs. Every morning, they say, dozens of young Mexicans looking for work as day laborers congregate on the sidewalks of New Brighton a few short blocks from the former U.S. Gypsum plant.

Today, the remnants of that plant are sad testimony to the borough’s industrial decline. Less than two miles from the ferry terminal, this 29-acre collection of factory buildings, sheds and silos has been disintegrating steadily since the plasterboard company abandoned the waterfront property in 1976. The sheer cost of demolishing the structures and cleaning up the contaminated soil is simply too high. Nearly a dozen other former industrial properties nearby sit in similarly derelict condition.

This was all going to change with Mariners Harbor. Tired of watching in vain as companies sped through the borough in moving trucks on their way to New Jersey, officials at the local Staten Island Economic Development Corporation (SIEDC) worked out a plan in 1995 to put some of the island’s industrial land back on the market. The idea was simple: If small and mid-sized firms couldn’t afford to fix up properties on their own, these Staten Island boosters would make it easier, laying the groundwork for an industrial park that would draw dozens of textile-assembling, chocolate-making, die-cutting and other light manufacturing companies.

In 1996, SIEDC identified a 70-acre site in Mariners Harbor as the only suitable location in Staten Island for the park. The group, which is not affiliated with the city’s EDC, then lined up support from Borough President Guy Molinari and other politicians; the city’s economic development agency tentatively agreed to turn over the plot it owned. SIEDC also rounded up $2 million from the federal Economic Development Agency and got commitments for another $2.25 million in funds from the state and the borough president.

Their timing was perfect. SIEDC officials have said they’ve had to turn away hundreds of manufacturers and distribution companies looking for quality space in the past few years. Staten Island real estate agent Del Smith reports that in the last six months he’s had to turn down requests from nearly 30 companies looking for roughly 1.6 million square feet of space. “We’ve become New Jersey’s biggest customers,” he says. Another potential industrial park project that he is marketing has been flooded by demands. Within weeks of announcing the project, they got dozens of responses–from Brooklyn, Staten Island, and as far away as Maryland, Ohio, and Seattle.

“These companies just need space to expand. They want to stay in the city, but we just don’t have the space ready,” says Smith. “If they build an industrial park here, with modern facilities and amenities like parking, there’s no doubt in my mind you would lease the space.”

The Mariners Harbor project seemed like a no-brainer, keeping businesses in New York City and creating new jobs without costing the city a cent

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But that’s not the way EDC works. According to planners and economic development experts, a small project without a big developer to back it has little hope for survival with this agency.

For city officials, there’s a much clearer payoff in big, charismatic projects. For example, when the city helps find the New York Stock Exchange a new home, everyone goes home happy: the powerful Wall Street lobbyists, the developers with a lucrative new project, and the mayor, who gets headlines.

It’s not just Staten Island: EDC has let down manufacturers in other boroughs, too. In the mid-1980s, the Koch Administration spent millions of dollars to develop an empty building at the Brooklyn Army Terminal. The building is now at 98 percent capacity, an all-time high. There’s still more than 900,000 square feet of undeveloped space at the complex. But although the city had dedicated $23 million to redevelop it, it summarily cancelled the funds earlier this year.

In the Bronx, economic development officials complain that EDC takes forever to turn over city-owned industrial land to companies wanting to redevelop the sites; the Bronx Overall Economic Development Corporation reports a backlog of more than 40 industrial companies looking for space in the borough.

In fact, none of the half-dozen economic development experts that City Limits contacted could think of any major new EDC-backed industrial projects in recent years, besides the port. “The actual work of growing manufacturing jobs in New York City could best be achieved by a lot of small and unglamorous kinds of activities,” says Linda Cox, former director of the Planning Center at the Municipal Art Society. “But that’s not what EDC is about.”

In part, manufacturers get shut out because they’re simply too small, says Hugh O’Neill, the former assistant executive director of the Port Authority who worked on planning projects with governors Carey and Cuomo. “For a long time, there has been a tilt in the city’s economic development programs toward office-based and other commercial activities instead of industrial activities,” says O’Neill, who now runs an economic development consulting company. “That’s to some extent accidental. My gut feeling is that’s a byproduct of a focus on large projects.”

It happened at Mariners Harbor, too. Earlier this year, the EDC decided the land parcel might not be available after all. Agency bigwigs were thinking of expanding the Howland Hook Marine Terminal, the borough’s thriving container port nearby. Thinking it might want to reserve the land at Mariners Harbor for the port, the agency revoked its donation.

Since the Howland Hook container port reopened in 1996, it has created slightly more than 900 jobs. With water cargo into the Port of New York and New Jersey expected to quadruple during the next 40 years, EDC officials estimate that the port must expand by 430 acres to meet demand. And EDC points out that the expansion project could generate as many as 12,000 jobs and $80 million in revenues for the city.

But, as with other port projects, locals suspect that the blacks and Latinos on the North Shore won’t get hired for jobs that usually get filled through the predominantly white longshoremen’s union. EDC officials acknowledge that the land wouldn’t be needed until 2020, if at all: If port growth doesn’t follow their predictions, expansion onto this site won’t be necessary. And if the port really must expand, advocates for the industrial park point out, EDC already has dibs on the 124-acre Procter & Gamble soap factory site right next to Howland Hook.

Right now, SIEDC reports that the city agency has made a different offer, proposing a shared development project that would cram both the expanded port and the industrial park project onto the 70-acre Mariners Harbor site. Instead of using 43 acres of this site for the industrial park, as originally planned, the project will be confined to 15 acres. But EDC says its plans for the port haven’t changed; it’s still preparing a port feasibility study, which a spokesperson says is in the “very early stages.” In the shuffle, the incubator project may simply slide into limbo.

Staten Island Assembly Member Eileen Connelly was dismayed when City Limits told her in August about EDC’s change of heart. “It’s extremely frustrating all the way around,” says Connelly, who was responsible for securing half of the $1.5 million in state funds for the project. “It worries me because it imperils the funding. How long until the federal government decides that there are other worthy projects that should get the money?” Connelly says she will recommend the funds be withdrawn if the project is substantially modified, but she may not even need to go to the trouble: SIEDC reports that the $4.25 million is site-specific and can’t be transferred to another project.

Meanwhile, other Staten Island projects–flashy, expensive developments–are blazing ahead. The city set aside $49 million to build a minor league baseball stadium, and $55 million to give the drab St. George ferry terminal a facelift. The city is also backing private initiatives on its own land, like the redevelopment of the 36-acre naval homeport in Stapleton, a new retail complex on 125 acres in Charleston and a residential development on a 109-acre plot in Rossville, 33 acres of which is city land.

All will consume prime industrial space, and none will create the kinds of high-paid permanent jobs that manufacturers provide. For example, the 36-acre Stapleton homeport site would be easy to convert to industrial work. It’s well-situated (roughly halfway between the ferry terminal and the Verrazano Narrows bridge) and has buildings with 200,000 square feet of industrial space in good condition, with the high ceilings that contemporary manufacturers need.

Real estate agent Smith says he approached the city four years ago with a proposal to bring in industrial and office businesses that would have generated 350 to 400 jobs. “I had tenants for every one of the buildings there,” says Smith, “but the city wouldn’t talk to me. Maybe it wasn’t glamorous enough–I don’t know.” Since that time, Smith says that one potential tenant, a large freight forwarder, has moved across the river to New Jersey.

Instead, EDC has other plans for the homeport, with its spectacular harbor views. In 1994, the agency began marketing the site to potential developers and initially entertained proposals for a Formula One race track and a floating casino. EDC officials opened the bidding in September 1998, and although they have refused to disclose the names of the bidders or the candidates for the site, local officials say the projects now under consideration include a hotel, a residential development and a film studio. In other words, anything but manufacturing.

These big projects won’t bring much to Staten Island, say locals. “From my vantage point, I don’t see any positive impact from these projects,” says Terry Player, president of the New Brighton Local Development Corporation. “If there is going to be an impact on employment, it will be marginal.”

The $52 million stadium will host just 38 home games a year. It would support about 200 low-wage service jobs–like selling tickets and hot dogs–for a small part of the year, and a full-time staff of about 20. “[The stadium] is not going to do diddley squat in terms of having a long-term impact for communities that are considered blighted on Staten Island,” says Player. “The city needs to be more focused on manufacturing as a job creation engine than the stadium-type projects.”

Most Staten Islanders may not exactly be clamoring for factories. They see their borough as a bedroom community, not a manufacturing zone. But as Reverend Rice points out, the story is a bit different on the North Shore. “You try to put anything on this island and the people don’t want it,” he says. “But you don’t hear that NIMBYism from the minority communities because they’re so hungry for employment and opportunity.”

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For her part, Susan Meeker has just about given up on the city. As director of the West Brighton Local Development Corporation, she saw a perfect opportunity in 1993 to help the growing number of small woodworking businesses on the North Shore. By her count, there are roughly 30 woodworkers, cabinet makers, upholsterers and musical instrument manufacturers doing business on the island. Many more are working out of basements and garages because they can’t find affordable space.

Her plan was to create a business incubator that would give them an affordable home, train apprentices, and set up technical assistance and equipment sharing programs. Using the hugely successful Greenpoint Manufacturing Design Center as a model, Meeker identified 15 businesses that would be interested in renting space in an incubator. Many are from Staten Island, but some would relocate: More than 30 firms are on the waiting list at the Greenpoint shop.

Meeker has spent six months looking at a number of available small buildings along the North Shore, but she has yet to find anything that meets her price and doesn’t have serious environmental problems. “There are many buildings, but retrofitting them to the technology today is going to cost a fortune,” she says.

These are the same problems that small companies and local development officials confront across the city. They can’t solve them on their own, and City Hall isn’t helping, either. “Instead of putting up roadblocks, EDC should be pushing infrastructure improvements,” says Meeker. “Otherwise, we’re never going to see anything happen here.”

Jonathan Bowles is research director for economic development at the Center for an Urban Future.