FAVORING FACTORIES

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The city’s manufacturers are calling a plan for industrial development announced by Bloomberg’s office on January 19 the most significant attempt since the Koch era to halt the decline of manufacturing in New York City.

The plan replaces outdated and loosely enforced “In Place Industrial Parks” with “Industrial Business Zones” (IBZs). The administration pledges not to rezone the IBZs for residential use, and there will be a greater commitment to enforcing industrial zoning through the Board of Standards and Appeals. In addition, the city will offer tax credits to businesses relocating to the IBZs, and provide them with on-site resource centers. A new agency, the Office of Industrial and Manufacturing Businesses, will administer the new initiatives. It is headed by Carl Hum, formerly chief of staff and special counsel at the Department of Small Business Services.

The city intends to further safeguard the supply of industrial space by opening up city-owned industrial assets for industrial businesses and expanding and promoting real estate assistance programs for industrial tenants.

But the long-awaited plan has also met with criticism that it doesn’t do enough to protect industrial space from the encroachment of residential and other non-industrial development. “There’s some good first steps and good second steps in there,” said Adam Friedman, executive director of the New York Industrial Retention Network. Friedman’s group, however, along with the Pratt Institute Center for Community and Environmental Development and the Municipal Art Society Planning Center, had advocated for more aggressive measures to create permanent havens for productive industry. Under the city’s zoning code, manufacturing zones can be used not just for factories, workshops and warehouses, but also for waste transfer stations, power plants and other infrastructure. What’s more, Friedman points out, the new measures are only guaranteed for the term of the current administration; there is nothing to stop a future mayor from opening the door to developers. “We had hoped that they would create a new type of zoning that limits industrial areas to [companies] that produce products,” said Friedman.

Rising labor, land and energy costs in the Northeast have pushed industry down south and abroad, but 500,000 jobs—roughly 15 percent of New York’s total employment—remain in pockets of industry across the city. Most of New York’s industrial companies are small-scale. Typically, they occupy less than 10,000 square feet, 80 percent employ fewer than 20 workers. More than four out of five are leaseholders.

With rocketing real estate prices, small industry has found landlords reluctant to renew leases, and when they do, unwilling to sign them up for long term deals. Many landlords now prefer to leave industrial premises empty, hoping to cash in if the city rezones the land from industrial to residential use.

Company executives say the uncertainty poses a serious threat to their businesses. “As a manufacturer, I need long term commitments on leases, and with zoning up in the air, landlords are reluctant to do that, and that puts me in jeopardy,” said Ernie Smith of Penn & Fletcher, a Long Island City based embroidery manufacturer. “They just think that manufacturers can up and leave like gypsies,” said Smith. “It’s not like that.”