Outside the Box

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Once an emblem of urban blight, Red Hook today is enjoying a mini-renaissance fueled by an eclectic mix of activities, from its busy container port and thriving light manufacturing sector to its growing community of artists and hipsters. While unemployment and poverty rates in the neighborhood remain depressingly high, Red Hook recently attracted major retailers like Fairway and Ikea, and will soon boast a new $30 million cruise ship terminal. With so many developments on tap, the Center for an Urban Future went to speak with Greg O’Connell, the developer of the Fairway project and one of the people most responsible for the Red Hook’s rebirth, to get his thoughts on the neighborhood’s future.

CUF: You’ve been developing commercial properties in Red Hook for a couple of decades now. How did you first get involved in the neighborhood?

GO: There had been a huge urban renewal going on in the late ‘70s and the city was going to put in a huge container port, which was going to go from where the container port is today all along the waterfront through the end of Red Hook, including Erie Basin. They were taking property through eminent domain. They would knock the buildings down and deed them over to the Port Authority. And of course, the businesses that were here at the time moved out because they knew they were going to be taken and the landlords weren’t putting any money into their buildings. And then came the fiscal crisis. It left Red Hook with some buildings that were up, some that were down, and lots that were vacant. That’s when I came in, because they amended the whole urban renewal plan to include only the container port where it is today. I saw it as an opportunity, a challenge. The location was good. And I had worked as a detective for the 1st Precinct in Soho when the transformation there started, so you could see the ingredients were there. You try to be ahead of what you thought the next area of development would be.

CUF: It’s hard for me to imagine that Red Hook at that point would have been seen as the next neighborhood.

GO: Without a doubt, it was not the next neighborhood. You can imagine what buildings vacant for 10 to 20 years were like. That’s what I bought. But I have a love of historic buildings and I like a challenge. The challenge is to take a building that nobody wants and make it alive. So that’s what I did. I plugged away. The first building I bought was in 1982, and it was 90 percent vacant. There was only one tenant in the whole building, a mattress manufacturer. I renovated the building, taking advantage of the ICIP [Industrial Commercial Incentive Program, a city initiative that provides tax break for developing or renovating commercial buildings]. So I could bring down the rent low. And so I advertised it in the Times. People would see the ad and call up. I’d tell them all about the property and then they’d ask me where it was. I’d say Red Hook, and then it was conspicuously silent on the phone.

CUF: From the looks of things it must be a lot easier to attract tenants here today?

GO: It has completely changed. I don’t do any advertising now. We’re 98 percent occupied and my rental basically is by word of mouth. For the last 10 years, I have two signs I leave on the building. That’s all I do.

CUF: How many businesses do you have today in the buildings you developed in Red Hook?

GO: About 80. And they’re in buildings that were basically vacant or empty. Years ago, this was dumpy. You’d see packs of dogs down here. You’d see no one. There was nothing going on here. For me, it’s quite rewarding to see that now you have activities. You have people working, you have art shows, you have people on bicycles coming down.

CUF: Obviously, Red Hook’s also become an attractive place for residential developers. Do you worry that residential encroachment will push out the businesses?

GO: The trick is you want to keep the balance. There’s a certain hum you want to create in a neighborhood, and if it’s too much in one direction or another, you lose something and it becomes sterile. You have historic buildings. You have a great waterfront, you have plenty of air and light, you have a great location. People want to live here. Absolutely. I can understand why and there’s nothing wrong with that. But the small business owners are happy here and it’s productive for them. They want to stay here, but they’re now very concerned with the thing that every business wants: stability. If you lose the working waterfront, if you give it up to residential development, you never get it back.

CUF: Your latest project involves bringing the Fairway supermarket to Red Hook. How did that come about?

GO: About 15 or 16 years ago, one of Fairway’s principals was importing olive oil for his store and he rented warehousing space here at one of my buildings. The product was so good and so well accepted, that he looked to expand into other related lines. When I bought the Beard Street warehouse, he was one of the first tenants, and he doubled the space. Later, when I became interested in [the building now being developed for Fairway], I was looking for a business that I thought would be good for the community. And if you walk around Red Hook, you’ll find that the markets here are generally expensive, poor quality and not so clean. Also, I learned that one of the best businesses to put into an inner city is a supermarket, because it employs locally. So here we had a Fairway, which at the time had just opened up in Harlem, where it employed hundreds locally. The community in Harlem loved it and it had quality products and pricing. I thought that it was a perfect match. I spoke to them, and we managed to make a deal. And they will be opening at the end of the year.

CUF: How is this going to benefit Red Hook?

GO: They will employ locally, there’ll be union jobs and there’ll be benefits. I think it will also have a multiplier effect on other businesses in the neighborhood. We have a wine store and a bakery that just opened up, and a new restaurant. Some of these businesses are opening up in anticipation of people coming down into the area, walking in the area, becoming part of the community. Plus, when we began to look at the food business, we found that there weren’t enough markets to service the population, partly because the population has been increasing. You don’t see abandoned houses anymore, you see new construction going on, and there’s more disposable income. These people need a place to shop.

CUF: Do you fear the Fairway will have a negative impact on some local businesses?

GO: I was concerned about the mom and pop business and would they be put out of business. I heard this when Pathmark opened up 15 years ago on Smith Street, and it’s been just the opposite. It never happened. I asked that same question to the principals of Fairway, and they told me the opposite took place [around their store in Manhattan]. What happened was the mom and pops–the small grocery stores–cleaned up their stores and lowered their prices, and they’re still in business.

CUF: Red Hook is also getting an Ikea, a much bigger development than your Fairway project and one that many people in Brooklyn oppose. What do you think?

GO: I’m on the community board and I voted to support Ikea. I think Ikea is not what you consider a typical box store. If you look at their health benefits, the way they treat their employees, it’s much different. They did much outreach into the community and adjoining communities, and listened to what people said. They’re opening up the waterfront where now you can’t get to at all. There’ll be 500 or 600 jobs. That’s important when you look at Red Hook Houses, where the unemployment is so high. And Ikea is going to start training programs way in advance [of the store’s opening] and give those people opportunities and do it on a continuous basis. They’re also going to use the waterfront to tie up some tug boats, and I think now they’re even going to be putting in a ship repair facility someplace there. The other side of the coin is the traffic it’s going to generate.

CUF: There’s a lot of attention on big box stores, partly due to Wal-Mart’s attempt to open a store in the city. Why do you think so many are looking to set up shop here?

GO: I think they realize that the city’s safer and they realize that the market is here, that the need is here. They look at Ikea’s store in Paramus and see how well it is doing, and they find that a lot of their shoppers are coming from New York City. So why shouldn’t we have the advantage of these type of items in our area?


SIDEBAR: How Marriott Made Harlem Happy

The Pols broke ground in February on what will be the tallest building in upper Manhattan, to be called Harlem Park. The $236 million glass tower will be anchored by a Courtyard by Marriott, the first hotel to be built in Harlem in decades. The complex will also include office space and apartments.

It will be a massive development with a corporate tenant that is openly anti-union. But unlike Wal-Mart, Marriott got approval for a zoning change from the City Council and is moving forward on friendly terms with its host neighborhood. That’s because the developer signed a Community Benefits Agreement (CBA) with Community Board 11 that will give Harlem residents first shot at an estimated 948 hotel and 1,482 construction jobs. It is New York’s first CBA.

CB11, which represents East Harlem, has had trouble with businesses that moved in but did not hire Harlem residents. So when Harlem Park developer Michael Caridi approached the board, members jumped at the chance to sign an agreement, recalls district manager Javier Llano. “We’re sick and tired of promises and they don’t deliver,” says Llano. “We felt we should take this opportunity to hold the developer accountable.”

The benefits agreement, worked out during a week of negotiations last year, sets goals of 50 percent minority employment in hourly positions. In management, 35 percent will be women and 35 percent minority, the company pledges. Construction contractors will open a community hiring office and refer applicants to unions. The hotel will also give one-quarter of its contracts to minority- and women-owned firms and make a good-faith effort to employ Harlem residents in one in four hotel jobs. “The goals are attainable,” says Marriott Senior VP of Diversity Initiatives Dave Sampson. “We’re not just talking about jobs–we’re talking about careers.”

Marriott management will not interfere if hotel workers decide to unionize–part of an existing neutrality agreement between the corporation and UNITE-HERE Local 6. Marriott has 13 hotels and 4,000 employees in New York City, many of whom are already union members. “It’s up to the associates,” says Sampson. “They will have the opportunity to organize the hotel.”

The developers badly needed community support. The site previously was restricted to low-rise development, so a zoning change had to get approved by the City Council. Organized opposition from the community board could have been fatal. After discussions with the board, Caridi agreed to lower the tower’s height, now projected at about 458 feet.

Some say CB11 could have gotten much more. There are no hiring goals for the construction jobs, and no way for newcomers to enter the overwhelmingly white trade unions. The carpenters’ apprentice program will not have openings for another year; by then, construction will be well underway.

“There’s a clear lack of involvement of unions,” observes Adrianne Shropshire of the New York Unemployment Project, which is working to promote CBAs. She helped organize a community-labor coalition that won a precedent-setting CBA in Los Angeles. In 2001, the developers of the Staples Center committed to hire more than 5,000 nearby residents for living wage jobs and agreed to provide funds for parks development, parking, affordable housing and job training.

“We didn’t have any legal basis–only the ability to organize,” said Victor Narro of UCLA’s Labor Center, who helped negotiate the Staples agreement. “They didn’t want to see us in the streets.”

–Bennett Baumer

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