Debate Over Contentious Industry City Rezoning Resumes, As Local Councilmember Opposes Plan

Following a public hearing in February, the proposed Industry City rezoning in Sunset Park was scheduled for another planning meeting March 16, the same day Mayor Bill de Blasio declared a state of emergency at the height of the novel Coronavirus pandemic in New York City. The mayor’s executive order suspended the city’s Uniform Land Use Review Procedure or ULURP in order to avoid the need to hold public gatherings and minimize the potential spread of COVID-19. 

The pause was ended last week, and the City Planning Commission’s long-delayed hearing on Industry City took place. But the landscape wasn’t the same as it had been back in March: Carlos Menchaca, the councilmember whose district includes Industry City, in late July said he would reject the application.

That move has set off a debate over whether local concerns, expressed by a single lawmaker, should hold up a development project with potential citywide impact.

That debate is ongoing. Also unresolved are some of the issues that drove resistance to the project, and at least according to Menchaca — turned him into an opponent.

A massive proposal

Industry City is a warehouse complex situated inside the historical Bush Terminal by the Gowanus Bay in Sunset Park, Brooklyn stretching from 32nd to 41st streets between 2nd and 3rd avenues. In 2013, a group of developers and investors acquired Industry with the intention to renovate the complex into a retail, commercial and light industrial business hub. The rezoning application (which is a private rezoning, not something sponsored by the de Blasio administration) sought to increase Industry City’s manufacturing and retail campus by 1.46* million square feet to include two hotels, department stores, and educational buildings—a $1 billion expansion over the next 12 years.

The current M3-1 zoning — which is for areas with heavy industries such as solid waste transfer facilities and recycling plants, which create noise or traffic, usually are located near the waterfront and buffered from residential areas — does not permit some of the proposed projects. The rezoning application is seeking an M2-4 designation, where the maximum base height can reach up to 85 feet.

According to the Environmental Impact Statement for the proposed rezoning, the applicants also want to create a “Special Sunset Park Innovation District” where research, development, design to engineering and manufacturing of a product could happen under one roof, in line with the de Blasio administration’s 2015 Industrial Action Plan. The rezoning space would have 1.78 million square feet of manufacturing use, with more traditional manufacturing uses ranging from wholesale manufacturing to cement factories. There also will be 893,445 square feet reserved for artisanal manufacturing, art and design studios and for office space.

The proposed actions would rezone 30 acres and create the special district for three new buildings, as well as what IC promises will be a pedestrian-friendly environment for ground use. It would also demap 40th Street between 1st and 2nd avenues.

In January, Brooklyn’s Community Board 7 could not come to a conclusive vote in the Industry City rezoning because some of their demands — which mirrored Menchaca’s — could not be met.

Brooklyn Borough President Eric Adams did approve the private application in March but with conditions, such as removing hotels from the special district along with a demand to “restrict school locations, limit big box and destination stores and venues.”

On July 28, Menchaca rejected the Industry City rezoning application in an Instagram post.

“From the beginning, I was highly skeptical but I decided to engage through the city’s rezoning procedure called ULURP…I made it very clear that I would not support Industry City’s rezoning unless certain conditions were met. Those conditions were not met,” he said. “Industry City rezoning will make it harder for working people to live in Sunset Park and our city land use process, well, it favors corporate developers as a profit off the displacement of working class New Yorkers.”

Menchaca said he was officially asking Industry City to remove its application. But Industry City has indicated it will press ahead.

After last week’s Planning Commission hearing, Industry City in an email statement to City Limits said: “[The City Planning Commission’s] thoughtful approach in considering [Industry City’s] application is exactly what is needed. We appreciate the growing chorus of voices from the City Council that has expressed support for the plan and we are still hopeful that the leadership needed to move this forward will emerge.”

After all, Menchaca’s is just one vote of 51 on the City Council. It’s only by convention that the local councilmember wields veto power over land-use applications in his or her district. And that’s a convention that developers and allies have questioned in recent years. Now, new skeptical voices are rising.

Reaction to the rejection

Some local Sunset Park groups and elected officials were supportive of Menchaca’s rejection on social media, even if they saw it as belated.

“The fact that this deal has fallen through after both developers and the Council Member worked so hard together to make it happen is a testament to the power in grassroots organizing of everyday residents, small business owners and community members who came together to hold accountable our city elected officials and to demand we have a say in the future of our neighborhood,” said Jei Fong, member of the Sunset Park Organized Neighbors.

“This rezoning threatened the livelihood of the Sunset Park community of over 130,000 in Southwest Brooklyn,” Elizabeth Yeampierre, executive director of UPROSE, a nonprofit focused on promoting sustainability and resiliency in Sunset Park, said in an emailed statement. “After several failed attempts at negotiations for concessions, Council Member Menchaca finally stood firm on saying ‘no’ to a development model that prioritized hedge fund billionaires over the interests of Sunset Park’s working-class and largely immigrant community.”

While other local elected officials voiced their support, others outside the district voiced their opposition towards Menchaca’s rejection.

In an opinion piece in the New York Daily News, two of Menchaca’s current Council colleagues — Democratic Congressional nominee Ritchie Torres of the Bronx and Queens Borough President-elect Donovan Richards — argued the city is facing an unprecedented economic crisis, and needs the jobs the Industry City expansion is projected to bring.

“Every so often, the politics of the moment, as well as the practice of solely following the lead of the local councilmember, can be a roadblock to finding a path forward,” they wrote. “‎Each of us was elected to be a responsible steward of the public good, not a feudal lord who gets to arbitrarily rule over public land as though it were a personal fiefdom.”

“‘Member deference’ has its place, to be sure. But it becomes dangerous when it morphs into veto power over the growth of the city’s economy,” they added.

A New York Post editorial voiced similar concerns, saying the economic crisis the city faces must be addressed before rejecting projects which could create jobs at no cost to the public. Randy Peers, president and CEO of the Brooklyn Chamber of Commerce, said the rejection was short-sighted and “turning our backs” on 20,000 new jobs was “irresponsible leadership.”

“Now, with one in five New Yorkers out of work, the question we all must consider is: how can we reject the 20,000 jobs this project creates?” asked Carlo Scissura, president of the NY Building Congress, in an email to City Limits.

“Often, in times of great crisis, great leaders emerge,” Lee Silberstein, spokesman for Industry City, said after Menchaca’s announcement, in a clear appeal to Speaker Corey Johnson and other councilmembers to override the Sunset Park rep. “We are hoping that will be the case in our effort to work with city leaders to fully implement a plan to create 20,000 jobs and generate hundreds of millions of dollars in taxes.”

However, the suggestion that Menchaca’s voice had less value than other councilmembers who have weighed in on development proposals didn’t sit well with U.S Rep. Nydia Velázquez.

“While this application may look good from ten miles away in the Bronx or Queens, the actual residents of Sunset Park and South Brooklyn have meaningful concerns about how this application would affect their waterfront and community,” she said. “It is important to remember that this proposal is unprecedentedly large for a private rezoning application. The rezoning application encompasses six million square feet in New York’s largest Significant Maritime Industrial Area.”

In an August 12th letter to his City Council colleagues, Mechaca explained his rejection of the Industry City rezoning application was not a decision taken lightly by his office, and stressed that  Industry City had not provided any proof of the promises it made to the Sunset Park community and must be held accountable.

“Knowing our power, we are used to private developers pitching us plans that promise our communities jobs and other benefits in exchange for our support. But like me, I know all of you care more about proof than promises. Without accountability, developers can offer the moon, but it means nothing. That is the case with Industry City,” he wrote.

“Industry City argues that this transformation is a win for the neighborhood, and that jobs are accessible to their Sunset Park neighbors. But there is scant evidence to support this claim. On the contrary, Industry City’s presence has fueled speculation and coincided with a dramatic increase in residential and commercial rents, which has displaced mostly immigrant working class families — a vicious cycle of increasing inequity many of you are familiar with in your districts.”

Menchaca’s reasoning

Last year in September, Menchaca set three extensive conditions which Industry City, the Sunset Park community and the city administration had to meet in order for the project to gain his support. His first condition was to remove hotels from Industry City’s application altogether, but also allow for space restricted to industrial use and to restrict the total amount of space for retail use.

A second condition was for the mayor’s office to have a written commitment supporting investments which could mitigate housing, workforce and education challenges the neighborhood faces.

The final condition was for the Sunset Park community to bring forth a legal and binding document of community benefits agreement for Industry City. That agreement would contain commitments such as establishing a public technical high school and adult education center at Industry City, creating a manufacturing hub, green energy infrastructure and support for local tenant advocates.

According to Menchaca’s office, Industry City said they would remove hotel use from the application closer to the City Council vote, but there was no written agreement. The mayor’s office made no capital commitments for community investments because it was a private rezoning application. And Sunset Park community groups, the Sunset Park Benefits Coalition, had yet to finalize their community benefits agreement.

The Sunset Park Benefits Coalition, a temporary name, was comprised of Sunset Park community leaders, groups and other stakeholders such as community members Jimmy Li, Steve Mei, Julio Peña III, Cesar Zuniga and groups like Opportunities for a Better Tomorrow, Neighbors Helping Neighbors, the Sunset Park Business Improvement District and Southwest Brooklyn Industrial Development Corporation, according to the group’s invitation letter.

The Sunset Park Business Improvement District’s executive director David Estrada says the BID  joined the coalition for two reasons: the size of the Industry City rezoning and its impact on the local economy, despite the Sunset Park BID’s distance from the project, which maps along Fifth Avenue between 39th and 63rd streets.

“The BID’s reason for participating in the community benefits agreement, or even weighing in on a zoning request, that’s several avenues away — was the sheer scale of the development proposed in combination with all the other very large changes west of Third Avenue prompted by the Economic Development Corporation and some very large land holders, like the Madison group that had Whale Square and Sunset Yards and so forth,” said Estrada.

“Factor in other things like the BQX and other city-initiated projects, and all of a sudden, even though some things are arguably almost half a mile away, it has a direct impact on a small mom-and-pop retail commercial strip,” he added. “One argument for the BID being involved at all is that it is necessarily going to have a significant impact on the residential composition and the retail mix. The second is to mitigate the presence of big box, large-floor plate retail west of Third Avenue.”

The coalition had to present a legally-binding community benefits agreement to Industry City prior to the City Council vote, but the onset of the pandemic derailed plans for those negotiations. According to Menchaca’s office and members of the coalition, COVID-19 hit before the group could find funding to hire a lawyer and collectively come up with one.

The cherry on top was the ULURP process restarting this month. Menchaca says his community had barely begun to mourn the lives lost from the pandemic, and now they have to face a public review process that is going to be virtual.

For UPROSE, the principles of a community benefits agreement based on Menchaca’s conditions was less than agreeable regardless.

“We felt that a community benefits agreement has no teeth and the enthusiasm that Industry City had for community benefits agreement also raised flags for us,” Yeampierre said. “We thought this is something that they want. They’re basically working with groups that have been supporting them all along, that have been testifying on their behalf. And together they’re coming up with a community benefits agreement. So we remained independent of that.”

UPROSE released its own 88-page report last year in July calling for the creation of a Green Resilient Industrial District (GRID). Yeampierre says that’s in-step with a 197-A community plan, adopted in 2009 by the city which sets forth a comprehensive revitalization framework for an environmentally-sustainable and economically viable waterfront district.

In her statement, Yeampierre said Menchaca’s rejection would mark the start of a new, community-led effort.

“Sunset Park now can showcase a new community-based model of sustainable development,” she said. “Now more than ever, we see the urgency of truly ‘innovative’ economic development that integrates climate resilience, adaptation and the sustainable industries of the future while addressing our community’s immediate needs for housing and open space.”

Commission vote coming

At last week’s hearing, members of the City Planning Commission asked Chair Marisa Lago if the Industry City proposal had been changed at all since it was submitted, in light of public objections or the pandemic. Lago said she was not aware of any official changes, and that it was appropriate for the CPC to evaluate the application.

CPC member Orlando Marin questioned the hotel permit request in the rezoning.

“The recommendation is to have no hotels which I don’t think serves the purpose of what they are trying to do at Industry City,” he said. “If the hotel is supposed to be purpose-built for Industry City we want to make sure we provide what is necessary for Industry City, but that we also alleviate the concerns of the community and the borough president.”

Marin asked Connie Chan, a city planner from the Department of City Planning who gave the Industry City rezoning presentation to the CPC, if the applicants could also give a reason for their calculations for how many hotel rooms it planned based on square footage. Marin said in the last CPC presentation, Industry City wanted to compete with similar projects in Philadelphia where there was one room for every 32,000 square feet, while Industry City had calculated one room for every 16,000 square feet, and Marin wanted to know the reason behind doubling up the number of rooms. Lago interjected to confirm that Industry City was planning to remove the hotels when its application was received by the City Council.

CPC members David Burney said the other objections about the project raised by Menchaca and the Community Board were not trivial, and that the proposed project represents a “struggle for the soul of Industry City, whether or not it was for its original purpose of light industrial use and workforce development or was it going to give up its soul to hotels and retail and that seems to me an important issue the applicant needs to address,” he said.

Lago noted that the special permit dictates what type of business is allowed where, including restrictions on warehousing.

“The other philosophy that is at play here is first the commission and the council dictate specific uses, versus adopting a more flexible envelope, which is what the applicant has argued for, that allows the area to grow organically including changes since March, since the pandemic,” she said.

“Whether it is a struggle for the soul of the neighborhood, is this an application proposal that will catalyze good jobs or is it going to accelerate residential displacement?” asked fellow Commissioner Anna Hayes Levin.

But Levin also wondered whether the requests that Menchaca and allies are making of Industry City ought to have been targeted toward the de Blasio administration instead.

CPC member Michelle de la Uz recused herself from the review session due to her role as executive director for Fifth Avenue Committee and its affiliate Neighbors Helping Neighbors, both nonprofits which work primarily in Brooklyn.

According to the Department of City Planning, another follow-up discussion on the Industry City rezoning application will be held Monday, August 17th and will be followed by the City Planning Commission vote scheduled for Wednesday, August 19th.

After the CPC vote, the City Council will automatically review the application: the subcommittee on Landmarks, Planning or Zoning gets the first look, then the full Land Use Committee weighs in, and finally the entire Council can consider the proposal. By tradition, the Council usually follows the lead of the councilmember in whose district a project falls. The body has 50 days to act on a ULURP proposal.

*An earlier version of this article said incorrectly stated the Industry City expansion was to 1.45 million square feet due to a editing error. It is by an additional 1.46 million square feet.