The flat whap of wood hitting wood is the only sound in the warehouse. Peter Arndtsen loads planks onto a metal cart and wheels the load through a dim maze of used lumber to a walk-in kiln located in a nearby room. “While I’m here, I figure I might as well dry this wood out,” he says, with a slightly embarrassed smile. Because the factory is shutting down, it’s unlikely the wood will ever be used, but he’s put too much work into this project to leave things undone.
Arndtsen hasn’t been on the payroll at the South Bronx 2000 Local Development Corporation since the end of February. No one has. He’s one of a few employees who still stops by the nonprofit’s headquarters, a former box manufacturing plant in East Tremont. Only a year ago, its three floors were busy with workers converting used industrial pallets into fresh pallets, floorboards and butcher-block furniture.
Today, the furniture showroom is emptying as the pieces are sold. Woodworking tools sit idle amid piles of reconditioned lumber. After nearly 20 years of mining the urban waste stream and bringing jobs to the inner city, this much-touted nonprofit, known as Bronx 2000, is out of business.
The problem was Big City Forest, the LDC’s for-profit subsidiary. The company sold hundreds of pieces of furniture to individuals and upscale shops like Soho’s tony Terra Verde, but the staff simply couldn’t build its market fast enough. Last January, facing a debt of than $750,000, Bronx 2000’s board of directors voted to shut the operations down.
Big City Forest had a popular product, an engaging social mission and environmental cachet. But like many small businesses, it stumbled when it made an ambitious leap to expand. For two years, staff pitched presentations to interested outside investors, but no one was willing to sign on.
Insiders disagree on what was missing. Was it sufficient time? Marketing savvy? Government support? Even without these shortfalls, could the organization have withstood the debilitating illness of its founder and president, David Muchnick, which forced him out of commission at a crucial moment in the company’s history?
Now observers are left wondering when–or if–anyone else will carry on what many say was a model economic development project. “The concept is brilliant and meets a legitimate need,” says Eric Goldstein, a senior attorney at the Natural Resources Defense Council. “I expect it will be reinvented and be a success. It was a little ahead of its time.”
Wood salvage is only the latest in a long line of Bronx 2000 projects that redefined what could be recycled. Since opening its doors in 1979, the nonprofit has had a reputation as a pioneer, developing glass and aluminum buy-back programs and ways to collect and re-use plastic containers. Environmental activists around the city can list the organization’s groundbreaking ideas. “David Muchnick is one of my all-time heroes,” says Carl Hulpberg, recycling coordinator at New York University and chairman of the environmental nonprofit Village Green. “In the ’80s, they were very successful in getting people interested in recycling….I just learned so much from those guys.”
By 1989, plastics had peaked and the glass recycling market, over-saturated with newcomers, was becoming unprofitable. Muchnick knew a tremendous amount of wood was being trashed and burned in New York, and that factors such as wood shortages in developing countries and global warming made the material’s reuse important. So a few staffers drove a truckload of used pallets from the Bronx up to a friend’s woodshop in Vermont. It took some work–prying out nails, drying the lumber, separating the planks according to their condition–but they determined that it was indeed possible to recycle industrial pallets.
Over the next five years, the group continued to experiment with manufacturing and marketing, and in 1994 Big City Forest opened for business. Muchnick knew it was unconventional to do design, manufacturing and marketing in one shop, but felt it was necessary for such a new type of product. “We had no option if we wanted to promote this idea but essentially do it ourselves, soup to nuts. There was nobody to subcontract out to,” he says.
The woodworkers discovered that the quality of boards used for packing and shipping varied widely, depending on what they were designed to carry. A pallet for hauling bricks is heavier than the thin, splintered pine pallets that get trashed behind Pathmark. Any pallet could be torn up and rebuilt or ground up and sold for fiberboard. But the bigger, heftier planks–many are oak, cherry, poplar, maple, mahogany–were perfectly suitable for furniture and flooring. A Big City Forest dining-room table sold for $400 to $700 and bookcases started at about $300, relatively affordable prices for solid, handmade furniture.
“Our first big break came when Con Ed realized they could use us to take their discarded wood,” Muchnick recalls. “It gave us a reliable supply.” Another early victory was when the New York Times began sending over packing crates used in the construction of its new printing plant in Queens. The crew was surprised to see all the wooden materials associated with a construction job.
These companies weren’t just being green corporate citizens. Because it later resold the wood, Big City Forest could charge as little as one-fifth of what cartage companies bill to take pallets away. Firms large and small saved money by doing business with Bronx 2000–helping prevent deforestation and employing workers in a low-income community was just icing.
Seeing the neighborhood as a whole was always part of the mission of Bronx 2000, which also served as a traditional community development corporation for East Tremont. The nonprofit helped businesses stay in the borough in the aftermath of the riots in the 1970s by brokering deals for city-owned property and helping local firms lower their energy costs. Over the years, the group also worked on neighborhood safety and housing issues.
As the organization grew, Bronx 2000 continued to link its money-making concerns to other community needs. For example, to determine whether Big City Forest’s furniture could handle dorm-like conditions, the company hooked up with a local foster care group home. In the course of this work, Muchnick heard that several parents with kids in the agency’s care needed a job in order to be reunited with their children. So Bronx 2000 offered them the first crack at job openings or slots in Big City Forest’s woodworking training program.
This training program, supported by the city’s Department of Employment, was another key component of Bronx 2000’s work. “We had people who were homeless, single moms, guys laid off from the Farberware factory, people in their 30s and 40s who had never held a job,” says Arndtsen, the program’s former coordinator. More than 100 people finished the three-month course; 85 percent found work in New York City’s woodworking industry.
Last October, in an attempt to quantify their work, the staff took an inventory of the organization’s accomplishments in its four years in business. Pulling 11,693 tons of wood out of the waste stream, Big City Forest had reclaimed enough lumber to save more than 1,600 acres of timber. The company employed 23 woodworkers and trainers, paying an average of $7.50 an hour. And the organization had saved New York firms more than $2.6 million in wood disposal costs.
Yet all the while, Big City Forest was sliding deeper into debt.
On top of a desk in Bronx 2000’s main office sit two in-boxes: One is for routine mail. The other is labeled “Personal/Get Well Wishes.”
Last November, Muchnick was diagnosed with disseminating intravascular coagulation, a rare condition that causes blood to clot almost as fast as it is produced. Both his legs had to be amputated, and after six months in the hospital, he now spends several hours each day in rehabilitative therapy and is working to learn how to maneuver his wheelchair. Doctors hope he will eventually be able to walk with prosthetic legs.
The timing could not have been worse for Bronx 2000 and Big City Forest. It was as if the play’s protagonist suddenly disappeared at the height of the third act. Potential investors, understandably wary about investing in a small firm with a big social mission, needed to be convinced by a charismatic leader, and so last minute bids to bring in capital went unanswered. By the end of January, with the two corporations in debt for more than $750,000, the board of directors voted to begin liquidation.
How did Bronx 2000 find itself in such dire straits?
Muchnick says the financial problems started in 1996, with the shut-down of the federal government. More than $500,000 in federal contracts to Bronx 2000 were put on hold, and the staff had to decide whether to scrap the whole enterprise right then or go into debt and keep working. They chose the latter, and according to Muchnick, the business never quite recovered.
When talking about the closing, Muchnick emphasizes how much work it took to get to the point where they had a steady stream of pallets and the manufacturing expertise they needed to handle heavy demand. After years of learning how to best make the products–and figuring out how to market them–they were at a point where an influx of cash would have allowed the company to expand its warehouse capacity and bring on a full-time sales force. “I’m not going to second guess. I think we ran things pretty well,” he says. “We were at a point when time just ran out.”
But even some supporters assert that the agency was just too ambitious. “I think it’s a great idea that can work if it’s slimmed down some,” says one environmentalist who worked with the company. “The real issue from my perspective is the three different product lines: pallet rebuilding, furniture and flooring. They took a new material that needed a lot of processing…a lot of individual steps that added to the cost.”
“It could have been that the overall concept could have been trying to attack every urban ill under one aegis,” says John Melia, a spokesperson for New York State’s Empire State Development Corporation, which gave $560,000 in grants and loans to Bronx 2000 between 1990 and 1996. “Their mission seemed a little unfocused.”
Former staffers at Bronx 2000 take issue with this. “In any pioneering effort, the ones that get out there first get beat up pretty badly,” says Alexandra Dyer, the former director of finance. She does admit, however, that the agency underestimated how hard it would be to raise private capital.
Muchnick says he was advised by some business-savvy friends that Bronx 2000 should have pitched the concept as a multi-city project, with ten times the projected income over a decade. “I was afraid that it wouldn’t pass the laugh test,” he says, adding that he preferred to stick to what he knew the company could accomplish.
Other observers suggest that the company should never have been exposed to the vagaries of the market. “This is not word processing software. There’s no huge profit,” says Barry Commoner, director of the Center for the Biology of Natural Systems at Queens College. “Venture capital is going to venture elsewhere.”
While Muchnick is quick to note that Bronx 2000 did receive many government grants, he points out that big orders from government agencies would have made the company more attractive to investors. Big City Forest made pitches to the state dormitory authority, military procurement offices and municipal libraries, but no orders were forthcoming. “It’s a different way of thinking about using city funds, seeing the job opportunities here in New York,” he says.
Even though the machinery and personnel that made Big City Forest run are now scattered, the concept may well live on. Muchnick says he would like to stay in the Bronx for old time’s sake–and because New York City has such a tremendous amount of wood waste–but he’s willing to move. “I get three or four e-mails a day asking how to do this. And we are available individually or collectively in a new form to move this forward,” he says. He pauses, musing out loud. “I don’t know exactly what form it would take…and it may not. It’s a tough one to call.”