Ask anyone what Mayor Bloomberg’s plan is for the local economy, and the likely answer would be “sports stadiums.” Between the Jets arena and the accompanying plan to redevelop Manhattan’s far West Side, many New Yorkers assume that his economic strategy was inseparable from his strategy to host the 2012 Olympics. Yet while the West Side redevelopment has overshadowed all other economic initiatives, the Bloomberg administration is quietly pursuing a far-reaching economic development program that in many ways is a refreshing improvement on the past.
For much of the past four decades, the city’s economic development agencies largely just reacted to the needs of a few dominant sectors, like finance and media, and overwhelmingly focused on Manhattan. Economic development primarily involved multimillion dollar tax incentive pages–known as corporate retention deals–for a handful of large corporations that threatened to take jobs to New Jersey.
Not so under Bloomberg, whose game plan calls for diversifying the city’s economy by focusing on ignored industries, from biotechnology to manufacturing, and gives new attention to economic development in the other boroughs.
Indeed, the city’s major economic agencies–the Economic Development Corporation (EDC), the Department of Small Business Services (SBS) and the Department of City Planning (DCP)–are supporting neighborhood revitalization outside of Manhattan with a vigor not seen in a generation. And this work, in communities such as Coney Island, Bedford Stuyvesant, Flushing and Hunts Point, generally involves greater community input, more comprehensive planning and greater attention to core infrastructure improvements than was the case under previous mayors. In the old, pre-Bloomberg days, city-sponsored initiatives typically revolved around a one-shot real estate project.
Perhaps the biggest change comes from Bloomberg’s grasp of New York’s place in a globalized world. Bloomberg’s speeches and policies reveal an understanding that in today’s global economy, in which companies and workers are less tied to place than ever before, few things are as important to the city’s future economic strength as having an environment that enables it to retain and attract a smart, creative and skilled workforce. Like Giuliani, Bloomberg underscores the importance of public safety to the city’s economic health. But Bloomberg smartly makes other quality-of-life issues–like sanitation, affordable housing, access to open space and education–part of his economic strategy as well. Earlier this year he noted that “crime, garbage in the streets, homelessness” were all “job killers.”
Undoubtedly there are missteps and missed opportunities. A publicly funded stadium on the West Side makes little economic sense. The defiant push for it was a poor use of the mayor’s limited political capital and diverted staff attention from important projects in lower Manhattan, Long Island City, Jamaica and other areas. The administration shows little regard for the scores of small businesses being displaced by city-sponsored development projects, and its aggressive efforts to increase city revenues from fines and fees hurt many more small firms.
Dan Doctoroff, the Deputy Mayor for Economic Development & Rebuilding, was too often consumed with the city’s bid for the 2012 Olympics. And while Bloomberg grasps the economic importance of quality-of-life issues, he does little to pressure the Metropolitan Transit Authority to address persistent problems with the subway and he makes only meager attempts to convince state officials to properly fund the transit system.
Still, even some Bloomberg critics say the administration has done certain things right. He deserves the most credit for recognizing that the old way the city handled economic development no longer makes sense in today’s ultracompetitive economic landscape, and for quietly implementing a new growth-oriented strategy.
“In my time working with city government, since 1970, this is the most dramatic departure in economic development we’ve ever had,” says Kathryn Wylde, president of the Partnership for New York City, the city’s largest business advocacy group. “New York City historically has taken for granted that its economy would take care of itself.”
Some of the most important changes have taken place at EDC, the city’s lead economic development agency. For much of the prior decade, EDC was simply reactive, doling out tax breaks for large scale real estate developments brought to its attention by individual developers and corporations.
EDC is, sadly, as infatuated as ever with stadiums, yet the agency has entered into only five corporate retention deals thus far under Bloomberg, compared to 38 in Giuliani’s first mayoral term and eight during the administration of David Dinkins. Its president, Andrew Alper, has also agreed to disclose more details about all EDC-administered incentive deals–a small step, but one that was fiercely resisted by all of his predecessors.
“The number of deals has changed dramatically and there’s some accountability in the new ones,” says Bettina Damiani, executive director of Good Jobs New York, an organization that monitors business subsidy programs. “Alper has moved some things forward on basic transparency issues.”
Instead of devoting so much attention to a few companies, the agency more broadly focuses on a number of key sectors, many of which didn’t get the time of day before. This includes a new system of industry desks, with agency staff assigned as full-time liaisons to sectors such as life sciences; financial services; professional services; media, tech and telecom; airlines; and consumer products. The administration also pays considerable attention to the cruise ship industry, significantly improved its film office and, notably, created an office focused on the obstacles facing manufacturers.
The boroughs outside of Manhattan figure prominently in EDC’s effort to diversify the city’s economy, another notable change from the Giuliani administration. Indeed, $442 million of the $938 million in EDC’s capital budget for the next four years–47 percent–is dedicated to projects in Brooklyn, Staten Island, Queens and the Bronx. Manhattan is slated to receive a smaller share–$361 million, or 38 percent–though this amount does not include the hundreds of millions of dollars planned for the extension of the number 7 train and the expansion of the Jacob Javits convention center. The remaining $135 million is not yet allocated.
The agency isn’t just doling out more money either. It has also sought community input and takes a more strategic approach.
Take Coney Island. Under Giuliani, the city committed $39 million to build a minor league baseball stadium on the Coney Island waterfront. While local residents applaud Giuliani for bringing baseball back to Brooklyn, it hasn’t been the economic stimulus that the neighborhood hoped for.
In contrast, Bloomberg’s economic team is developing a strategic plan that aims to boost the entire neighborhood. To get the ball rolling, EDC helped set up a local entity two years ago to guide the planning process: the Coney Island Development Corporation (CIDC). Ultimately, it hopes to spur new development on many of the area’s vacant sites, breathe new life into Coney Island’s long struggling amusement park and attract employers that would provide year-round jobs for local residents. The plan, which is still being ironed out by consultants and the community, is expected to include everything from basic infrastructure investments designed to make the major commercial strips more attractive to sprucing up the boardwalk and luring new entertainment uses to the area.
“The Giuliani administration built the stadium, and there was talk of setting up the CIDC, but it never got off the ground,” says Judi Orlando, executive director of Astella Development Corporation and a board member of the CIDC.
In the Bronx’s Hunts Point, the Bloomberg administration has also shown some thoughtful planning. The neighborhood has been a focus at EDC since the Giuliani administration announced that the Fulton Fish Market would be moving there from lower Manhattan. In the past, however, it would have been surprising for EDC to do anything more than dedicate the funds necessary to erect a new warehouse and distribution center. The Bloomberg administration instead is coupling the relocation of the fish market with a multitiered initiative to reinvigorate the Hunts Point community.
In mid-March, the mayor announced a “vision plan” for Hunts Point and committed an additional $27 million beyond funding already invested in the fish market development. According to the plan, the city will create new zoning that supports more food-related industry in Hunts Point and will aggressively market vacant parcels within the area’s Food Distribution Center to food-related manufacturers and distribution companies.
The plan also attempts to create better connections between the growth occurring at the various food markets in Hunts Point and the adjacent residential neighborhood, a facet of economic development that was almost completely neglected in prior administrations. For instance, the city opened a new employment and training center that aims to ensure more local residents have the skills to fill job openings at the market. The city also plans to make streets and sidewalks more pedestrian friendly, through new lighting, streetscape improvements and new truck routes.
“I give [Bloomberg] major props for listening to us and actually acting on it,” says Majora Carter, a longtime environmental justice advocate who runs Sustainable South Bronx, a Hunts Point–based organization that promotes sustainable development. “It’s a total change. I don’t think under another administration this would have happened at all.”
Satisfying changes have come at the Department of Small Business Services (SBS) as well. Under other mayors, the agency–then called the Department of Business Services (DBS)–had little direction, even less visibility and was universally derided by business leaders and economic development officials. “It was a joke,” says the director of one Brooklyn local development corporation.
Today it’s difficult to find a local economic development practitioner who doesn’t give high marks to the agency. Indeed, even those who criticize EDC for focusing too much of its resources on the West Side redevelopment acknowledge the dramatic and positive changes at SBS. “Now, the agency is respected,” says the Brooklyn official. “Bloomberg and his staff take these issues seriously. They really are trying to bring economic development out to the neighborhoods.”
SBS Commissioner Rob Walsh revamped the agency’s commercial revitalization program, aggressively supported the formation of new business improvement districts (BIDs) and opened a business solutions center in each borough in an effort to improve how it provides assistance to business owners and entrepreneurs. The agency also took over the city’s workforce development programs from the Department of Employment, and, for the first time, created a system linking new economic development projects–like the Steiner Studios project in the Brooklyn Navy Yard and the Atlantic Terminal project in Fort Greene–with job training and placement programs.
Of course, the Bloomberg administration hasn’t gotten everything right.
Undoubtedly its obsession with the Jets stadium and the Olympics distracts administration officials from other worthy economic development projects. The administration has also made numerous other blunders, such as unleashing a ticket blitz that disproportionately hit small businesses. Most frustrating, however, is the handling of large-scale development projects.
In almost every neighborhood where prominent real estate developers have expressed an interest–including Greenpoint and Williamsburg, Atlantic Yards, Red Hook, the far West Side of Manhattan and the Bronx Terminal Market–the administration takes a distinctly top-down approach to economic development. Though the prospect of significant private investment in these long-overlooked neighborhoods is in many ways a welcome sight, the administration often seems overeager to cut deals with developers and uninterested in whether a project will displace existing businesses or significantly alter the unique character of a neighborhood.
One example of this is the city’s plan to redevelop the Bronx Terminal Market, a 31-acre wholesale produce center that fell into disrepair over the past three decades. The administration deserves credit for wresting control of the site from its longtime owner, who let the market deteriorate and exploited the merchants who operated there. But the city apparently didn’t even consider renovating the produce market or keeping the more than 20 remaining merchants at the facility. Instead, without public bidding and with no meaningful input from the merchants and the community, it turned over the property to a developer with close ties to Doctoroff, who will build a 1-million-square-foot retail complex with the help of lucrative city incentives.
“They could have revitalized [the produce market]. They could have integrated it into their plans,” says Ron Shiffman, a professor at the Pratt Institute and a former member of the New York City Planning Commission. Shiffman, whose father managed a manufacturing company six blocks away from the market, generally supports the city’s initiative. But he questions why EDC didn’t involve the merchants: “It could have added value to the development.”
Indeed, many of the administration’s biggest plans are likely to generate widespread displacement of local small businesses, often in favor of developing neighborhoods into residential–instead of mixed use–communities.
The city’s plan to rezone 175 blocks in Greenpoint and Williamsburg will likely push out more than 100 woodworking companies, specialty food manufacturers and other industrial businesses. According to the New York Industrial Retention Network (NYIRN), these companies employ roughly 2,800 people. Meanwhile, the Bloomberg administration implemented or is in the process of executing at least five other rezoning plans that convert manufacturing neighborhoods to residential or office districts, risking thousands more blue collar jobs around the city.
And there are indications that other neighborhoods are next. In Red Hook, the administration’s 2003 decision to hire a consultant to determine the best future use for six waterfront piers was seen by many local businesses and residents as a naked attempt to replace the neighborhood’s working waterfront–including an active container port that supports roughly 500 jobs–with luxury condos.
Shiffman, who gives “high marks” overall to the Bloomberg administration’s work on economic development, believes the administration has been too quick to turn over public assets to the highest bidder and is overly focused on real estate appreciation. Most disappointing, he says, is the fact that this type of thinking was all but adopted by the Department of City Planning, the agency with a prominent role in reshaping neighborhoods from Greenpoint and Williamsburg to Hunt’s Point and the far West Side.
“Zoning should be for the health and welfare of the city, and that is not always the highest return on the property,” says Shiffman. “City Planning didn’t have any vision of creating a socially integrated community. They think their job is to work with the development community.”
Shiffman is far from alone in singling out City Planning for criticism. “If a sector cannot absorb quadrupling of its rents, City Planning assumes that it’s not a strong sector and not a viable economic activity,” says another prominent New York urban planning expert. “They’re measuring it solely on its ability to pay whatever the real estate sector asks for.”
This article is adapted from a report issued by the Center for an Urban Future, which is available at www.nycfuture.org