Tough Questions for Industry City in First Council Hearing on Rezoning Bid

Councilmembers scrutinized the promise of 15,000 to 20,000 jobs, which depends on hiring decisions that Industry City itself will not control.

City Council members poked and prodded Industry City leaders Tuesday on their rezoning proposal, focusing on accountability, transparency and job projections during a land-use subcommittee hearing. 

The Zoning and Franchises Subcommittee hearing marked the next step as the private application for the Sunset Park waterfront development project moves through the public review process or ULURP (Uniform Land Use Review Procedure).

Industry City CEO Andrew Kimball said in his testimony that the rezoning proposal for an expansion could bring in an estimated 15,000 to 20,000 jobs–15,000 on site and 5,000 off site. 

However during the hearing Kimball clarified that of those 15,000 jobs, an estimated 8,000 already exist at Industry City. 

Subcommittee Zoning and Franchises Chair and Queens Councilmember Francisco Moya questioned Kimball about how those jobs could be guaranteed since they depended heavily on Industry City tenants hiring locally. “So how are you calculating the job creation estimates? And since these are not jobs directly generated by Industry City, you can’t truly guarantee that these jobs will exist?,” asked Moya.

Brooklyn Councilmember Carlos Menchaca, in whose district the proposal falls under and who has publicly rejected the proposal asked whether there was an opportunity to make local hiring a requirement in the lease for future Industry City tenants. 

Under a tradition known as “member deference,” the City Council usually follows the lead of the local Councilmember in deciding land-use applications. However, Bronx Councilmember Ritchie Torres, Queens Councilmember Donovan Richards and Brooklyn Councilmember Robert Cornegy have indicated support for the Industry City application, which projects thousands of jobs during a time where the city is facing economic hurdles due to the pandemic, despite Menchaca’s opposition.

Kimball said Industry City has a track record of successfully creating thousands of jobs but no landlord could guarantee Industry City tenants would hire locally. “The way you are successful with workforce development and with onsite employment centers is by making it an amenity for the tenants, not a penalty. The minute you show up in a small business space and say, you have to sign all these legally binding things, or we’re not going to lease the space to you, that’s the moment they say goodbye [and] go somewhere else,” said Kimball. 

Questions about transparency and infrastucture

Kimball added the rezoning proposal was supported by local labor unions–some of which spoke in support of the rezoning proposal at the hearing. 

While Richards and Cornegy were both supportive of the rezoning proposal, each did raise concerns about job creation and what type of transparency Industry City would provide on worker demographics and income. Richards added that it was disappointing that the de Blasio administration was not more involved in the Industry City rezoning proposal. “I do find that the de Blasio administration not being at the table to be very disappointing during this moment when there are some legitimate concerns that we’ve heard from communities like Sunset Park around housing pressures,” the Councilmember, who is the Democratic nominee for Queens Borough President, said. “And I do just want to frankly put it out there that I believe that the de Blasio administration should be at the table to make sure that this plan is more comprehensive.” 

Kimball said he could not comment on the city administration’s approach and added that Industry City was committed to showing transparency and report to an independent group under a legally binding agreement. 

Brooklyn Councilmember Antonio Reynoso indicated that the concerns about Industry City’s proposal reflected the deeper flaws in Mayor de Blasio’s approach to planning.

“It’s sad that a community is going to have to suffer at the interests of a private applicant to solve many of the issues that Sunset Park is going through, specifically resiliency. It’s a big problem,” he said. “And the city not entering here is actually going to put your investment in jeopardy and is moving away from the needs that the city is going to have long term. So I think that it would be unwise for the City Council to move on a private application that is going to leave out the opportunity for investment on city infrastructure.”

The proposal

Industry City is a warehouse complex situated around the historic 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 the area 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) seeks 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 and 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, 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 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.

A councilmember’s demands

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

A second condition was for the mayor’s office to provide a written commitment supporting investments to help mitigate housing, workforce and educational 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, installing green energy infrastructure and offering support for local tenant advocates.

During the hearing, Kimball said he has agreed to all ten of the community benefits agreement  terms, but Menchaca and Reynoso argued there was no binding agreement to hold Industry City accountable to meet those terms without the support of de Blasio administration.

According to Menchaca’s office, Industry City said they would remove hotel use from the application closer to the City Council vote, but there has been no written agreement. The mayor’s office made no capital commitments for community investments because the application is a private rezoning, not something sponsored by the de Blasio administration. And Sunset Park community groups, through the Sunset Park Benefits Coalition, have yet to finalize their community benefits agreement in part because negotiations were impacted by the pandemic.

Next hearing looms

In January, Brooklyn’s Community Board 7 could not come to a conclusive vote on 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.”

The 10 a.m. hearing lasted well beyond 7 p.m. and 200 people signed up to testify for or against the application. The City Council Land Use Committee weighs in next before the entire Council can consider the rezoning application. The body has 50 days to act on the Industry City rezoning application.