In the midst of the century-old cobblestone streets and manufacturing structures of Industry City, developers are investing in what they hope is New York City’s future. New owners of the vast concrete buildings are looking to turn them into one of New York’s enterprising tech and “smart” industry hubs.
After years of struggle, the transformation is visible. Luxury Buick, Lexus and Porsche SUVs stand in front of the large concrete docks that were once reserved for off-loading heavy machinery. Skinny, geeky guys saunter around the streets in designer denim, wandering in and out of the warehouse buildings that house their offices.
But the change leaves many residents and business owners of the adjacent neighborhood Sunset Park, skeptical. The working class, residential community is familiar with the industrial waterfront of the past, and they’re still unsure how the shift to the future will benefit them.
The buildings of Industry City didn’t look that different a century ago. Five to six-story concrete constructions covered millions of square feet, as they do today. Spanning over a dozen blocks along Brooklyn’s waterfront, they were built by Irving T. Bush in 1895 to foster heavy industry, and they did so successfully. The area provided work to Brooklyn residents in shipping, manufacturing and automotive industries for a large part of the 20th century.
But, as the 1980s approached, New York’s manufacturing jobs moved overseas. Businesses along the waterfront saw their vacancy rate rise dramatically, as explained in a New York Times article published in 1984. It was around then that a 6 million square foot chunk of Bush Terminal, including 16 buildings between 30th and 40th street, was carved out and renamed Industry City.
The varying owners of the complex have struggled to find a use for the buildings since then, leaving much of the warehouse space standing empty for years. In 2011, the owners, Abraham Fructhandler and Rubin Schron, hit a low point. Forced to restructure $300 million in debt against the property, they sought to find a solution to Industry City’s troubles.
Industry City wasn’t the only business struggling along Sunset Park’s waterfront. New York City’s Economic Development Corporation noticed that the heavy industry that the area was zoned for was no longer sufficient to fueling economic growth. Out of this came the Sunset Park Vision Plan. In it, the EDC outlined plans to transform the entire area between 43rd and 51st street. With these upgrades, the city hoped to create 11,000 jobs, get rid of 70,000 annual regional trick trips and reduce C02 emissions by up to 5,000 tons, all while freeing up 3.5 million square feet of industrial space for job creation.
Some of those plans have already come to fruition. With a new park opening along the waterfront this fall, the city hopes to add more green space to the area, attracting interest and investment. The city also sold off Federal Building #2, a part of Bush Terminal that will open in the coming months as Liberty View Plaza. If all goes as planned, it’ll become a space for manufacturing companies that specialize in new, growing technologies such as 3D printers.
The ambitions of the EDC have not been lost on Industry City. Its website lists plans to repave the streets, install overhead power distribution and do a generalized renovation of all of the buildings. This process has already begun, with street repairs and extensive work on upgrading old, industrial spaces.
Artists and industry
The renovations also have a more specific goal: pulling in a new, more prosperous clientele for the complex. After using old industrial space and splitting it into multiple smaller spaces, Industry City started targeting artists and creators to rent out the new spaces.
The strategy has had some success. To date, Industry City houses 23 “creative” tenants, according to its website. To young artists, the promise of space, good lighting and, most importantly, cheaper rent has drawn them to the complex.
As a visual artist using paint, sculpture, collage and drawings, Fred Bendheim’s craft requires him to spread out. After being stuck in a cramped studio in Manhattan with poor lighting and a bad landlord, he decided to move his work to Industry City less than two years ago. He’s settled quite comfortably into his studio in Building #2 on 36th street off of 2nd Avenue. “There’s a very good north light, which is good for what I do,” Bendheim explained enthusiastically. He’s also a frequent visitor to the small French café on the ground floor of his building.
Bendheim knew little about the benefits provided by Industry City or Sunset Park prior to his move. “I lived in Brooklyn for 25 years but never made it to Sunset Park,” Blenheim explained. Now, he frequents the restaurants and the art supply and hardware stores close to Fifth Avenue.
But, attracting artists wasn’t enough to help Industry City’s financial woes. To date, only 60 percent of the complex is occupied by rent-paying tenants. A more vigorous strategy and reshaping of the complex has been instituted to reinvigorate Industry City once and for all.
New hope lies in an investment by Jamestown Properties, Angelo Gordon and Co and Belvedere Capital. Acquiring almost 50 percent of the ownership, they’ve promised to invest more than $35 million in the property and take over part of the $300 million debt.
Their goal is not to just bring in artists—they want to draw in primarily tech-oriented tenants. “There’s almost an unlimited mass for creative New Yorkers who are entrepreneurial. They want to make things again,” said Andrew Kimball, the Director of Innovation Economy Initiatives for Jamestown Properties.
Jamestown Properties already has a reputation for success in reinvigorating formerly industrial parts of the city. The company was behind the dramatic rebuilding of the Brooklyn Navy Yard and, before that, Chelsea Market. With the promise of more space for less, smart, young and entrepreneurial New Yorkers are the target client for Kimball. “We want to be realistic where the jobs are, and the jobs today are with innovation economy businesses,” he said.
How will this change Sunset Park?
It’s unclear how this new direction will affect residents of Sunset Park. In a community where 26 percent of the population lives below the poverty line and where the per capita income is 20% lower than in the rest of Brooklyn, good jobs with benefits are essential. Kimball emphasizes that his company will work hard with job placement agencies in Sunset Park to recruit the workforce. But, some fear a mismatch between the high-tech jobs and Sunset Park’s blue-collar workforce.
While the EDC has created programs, such as the Business Innovation Challenge and the NYC Relocation Employment Assistance Program, to encourage businesses to move to designated areas of growth in New York, a lot of the more traditional manufacturers simply don’t see the point in moving to Sunset Park with their traditional jobs.
David Meade, the Executive Director of the Southwest Brooklyn Industrial Development Corporation says that there is sometimes a gap in training among Sunset Park residents for the new “innovation economy” jobs moving into the area. “They don’t necessarily have the skillset,” Meade said.
He also worries that there is a lack of communication about the jobs that these companies are creating. “You don’t know who is there, who is looking to hire. Companies don’t have links to the communities,” Meade said.
Chuck Hoffman, the Director of the Workforce Development Center, another job placement agency located in Downtown Brooklyn, has worked with the developments at the Brooklyn Navy Yard and echoes Meade’s skepticism. “We’re not receiving a high volume of calls to train for those jobs,” Hoffman said. “There may be a bigger skills gap between who these companies serve and who we have.”
Yet, Community Board 7 District Manager, Jeremy Laufer, still believes there will be long-term benefits for the community with the new investment. “People are naturally skeptical of change to take them out of their routines,” Laufer said.
He worries that the infrastructure in many of these facilities is outdated and in desperate need of updating. “We don’t have fiber optic cables – they’re still relying on copper wire,” Laufer said. But, he’s hopeful that the new investment will bring updates to the system to make the complexes safer, more modern and more environmentally friendly. “As long as there’s appropriate training, it’ll bring new, greener jobs.”
Specifically, he’s excited about the shift away from dirtier manufacturing to cleaner technology on the waterfront. Even if the job opportunities aren’t immediate, he believes the change will benefit the residents of Sunset Park in the long-term.
Residents are already beginning to adjust to this new economy. Construction and manufacturing each comprise nine percent of total employment in Sunset Park, but the majority of jobs are in service, food, education and health care, according to the 2009 census. In other words, the local taqueria or Banh Mi shop may soon see an influx of tech-oriented former Manhattanites spilling out from Industry City.
Teddy A., the owner of Hero Champ, has already noticed a larger influx of customers in his little deli on the corner of 36th and 3rd. The café is unpretentious – it looks like it hasn’t been renovated since the 1980s. It sticks to classics like sandwiches, hotdogs, freshly baked goods and hot lunches. Teddy has owned the shop for 23 years and has served Industry City tenants for just as long. “I’ve seen it all—from good to bad back to good,” Teddy said of Industry City.
Inside Industry City, it looks like the new breed of tenant is here to stay. IHeartEngineering is one of the companies that moved its crew of geeky staffers from Manhattan to Brooklyn. Inside the messy office plastered in prints of web comics sits Sameer Parekh, the Chief Operations Officer.
His life is a far cry from that of his blue-collar predecessors at Industry City. Educated at Berkeley, he kick-started his career in 2000 by founding then selling his company in California. After a DJ stint in Eastern Europe, he continued on to a two-year career at Goldman Sachs. After his own robot company, Falkor Systems, went under, he found himself here.
The other employees at IHeartEngineering aren’t from the area either—one has an accounting degree and takes care of shipping and booking, while the other one is ex-military. The small staff specializes in constructing “open-source” robots for academic research facilities around the US—a far cry from the heavy manufacturing that their office used to host.
Spewing abbreviations that only a tech geek would understand, he explains how the definition of manufacturing has changed for him and his co-workers. The old loading docks are still important for them – so that they can receive their large shipments of parts from Korea. Other parts are made with a 3-D printer or shaped with a laser cutter. They then assemble each ‘turtlebot,’ with a 3D camera, package it carefully, and ship it off to their desired customer.
As businesses like IHeartEngineering arrive at Industry City, Parekh claims that more people like him may soon be making their way to Sunset Park as well. “I certainly feel that there’s a lot of people moving to the neighborhood. I have a friend who used to work for Google and now he works for some hedge fund and he just bought a house in the neighborhood,” Parekh said.