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Brooklyn Reimagined by Industry City, Heritage Reuse and Innovation Centeric Mixed-Use Campus

Dec 3, 2022

Project History and Site Summary

Sunset Park is a waterfront neighborhood located between Gowanus, Bay Ridge. It stretches from 15th Street to 65th Street between 9th Avenue and the 8th Avenue corridor. Industry City is an innovative mixed-use development built on 35 acres formerly industrial land in Sunset Park. It is one out of three massive historical industrial complexes along the Brooklyn Waterfront. The Brooklyn Navy Yard is one of these. Andrew Kimball, the CEO of Industry City led the transformation on 300 acres of the former Naval shipbuilding facility. The other one is the Brooklyn Army Terminal on 65th street from where troops shipped out during the World War I and World War II. The Bush Terminal on 65th street is the third. This was where Industry City used to exist. It used be the port for manufacturing goods that were brought in and then warehoused for distribution in New York City. Each of these developments had a high level of employment from 1930-1960. They fell into decline in the 1970s, when large-scale manufacturing moved overseas. Massive government subsidies were provided to quickly bring back the Brooklyn Navy Yard, and Brooklyn Army Terminal that had been neglected for decades.

Brooklyn Navy Yard is an example of industrial heritage reuse. Andrew Kimball, under his leadership, took $280 million from the City of New York to improve basic infrastructure and leveraged $1 billion of private investments to create thousands of jobs in the innovation economy. [1] It was in August 2013 when Mr. Kimball joined Industry City to direct the redevelopment of the long-underutilized privately owned industrial facility. At present, the 6 million sq.ft. This mixed-use space has been designed to be a creative hub for commercial and retail tenants from the various boroughs in Brooklyn. Jamestown Properties (Belvedere Capital), Angelo Gordon Co. Cammedy's International (FBE Limited) and Belvedere Capital all co-own Industry City. Jamestown Properties, a real estate management and investment company that focuses on design, is responsible for the vision and leasing strategy for Industry City. They have executed landmark projects like Ghirardelli Square in San Francisco and Chelsea Market in New York City. Industry City had to find a way to use a site that was largely privately owned without the assistance of the government. This allowed them to build an ecosystem of uses that will attract private investments. The vision centers around the reuse of industrial heritage and keeping innovation economy principles in mind. This creates modern manufacturing standards that are not only about producing physical products, but also facilitate a new kind manufacturing at the intersections of design, engineering, and technology. The 5000 sq.ft. You can achieve the 5000 sq.ft. of space required to segregate parts in one product in 500 sq. Technology such as laser cutters or 3-D printers can be used to create a space of up to 500 sq.

Jim Somoza is the managing director at Industry City. He spoke of a campus vision, where the entire development was divided into 16 office building and the ground floor of each building connects via a seamless corridor while standing on an abandoned train platform used for industrial transportation. Each building is distinctive in its design, tenants and waterfront views. Mr. Somoza explained the purpose of this adaptive reuse project. He said that it wasn't just about transforming an industrial building into office space, but also about maintaining the neighborhood's character and bringing in vibrancy. It is easy to see the remains of the railway tracks that once served as the Bush Terminal. This reinforces the historic significance of the site and allows for the harmonious placement of interactive outdoor art installations like the "Pool", by Jen Lewin. The $125 Mn[1] capital investment by the owners over the period of 10 years is included in this project, as well as a recent stake bought by GIC Pte (a Singapore sovereign-wealth fund). Ltd. estimated that the sprawling Industry-city project was worth $1.3 bn as of 2020. [2]

ULI NY joins Jim Somoza, Industry City, for a campus tour

Industry City's developers have created a "shared office" structure for tenants that span 600,000 square feet. There is also a coworking space measuring 30,000 square feet. The marketing team realized that they were not seeking traditional Finance, Insurance, Real Estate tenants (FIRE) who would normally choose a Manhattan office space. They targeted firms that are involved in design, marketing, advertising, technology, equipment supply and other creative fields. The focus from the very start has been on building a community and providing a creative space for innovation. The retail part covers around 1 million sq.ft. The total area can be leased to "local yet global" customers.

They offer unique and unusual dining options. They aren't the typical go-to places that are pulled from Manhattan and relocated to Sunset Park. Most of them are independently owned mom-and pop shops with varied backgrounds. A highlight is a couple from California who risked their lives to bring Korean comfort food into Brooklyn at Ejen. The pandemic was particularly stressful for vendors and the developers took a keen interest in their success. They were able to retain all but one tenant post-March 2020 by providing reasonable concessions. The vendors returned more resilient and built a community around this shared resilience. Leasing wholesale space to vendors such as Colson Bakery and Lilac Chocolate is a great retail strategy. This allows them to complement their retail shops next door. This allows vendors to show off the development process of their products while still delivering fresh goods to customers. They used a countercyclical approach in attracting retail and office tenants. Colson Bakery has always operated as a local wholesaler, supplying baked goods across Brooklyn and Manhattan. Jamestown placed Colson Bakery at a central location and assisted them in launching a retail business arm, transforming them into an anchor tenant. Although Colson Bakery initially declined to open a shop, the team has seen great success and is now looking into expanding the business. Industry City was home to more established local brands like Sahadi's Pizza and Frying Pan as foot traffic increased.

Industry City current rent range and asset classification (4)

Post-Covid, 60-70% office tenants in Industry City have returned. This compares to the 20% rate for Manhattan firms. This has enabled foot traffic to maintain a steady 12,000 daily on weekdays. 16% of these visitors are from outside, while 84% of the employees are inside. 9,500 daily on weekends is from visitors, with the remainder being employees.

It is important to understand that the Industry City Project is not a copy-paste model of the Chelsea Market Business Model. Industry City is built heavily on community and uses a destination-oriented approach. It is not seeking international tourists but local New Yorkers who are curious about exploring different New York neighborhoods. Mr. Somoza likes to say their business is transportation, not real estate, in the sense that his team worked hard to curate tenants and develop a design strategy that transports visitors to global destinations. Open supermarket, the Japanese Market allows you to watch a blacksmith and shop for fresh, local sushi. An upcoming Mexican market will be operated and owned by a Mexican resident. Industry City is the culmination and integration of ideas, design, quality, while still preserving the industrial aspects.

Community buy-in was critical from the very start of the project, as the developers sought to revitalize the Sunset Park waterfront area, which has experienced poverty, blight, and a historic lack of investment. The support from local government and community members was key in obtaining tax credits for the brownfield redevelopment.

Potential Setbacks

In the 1950s, Brooklyn's waterfront industrial areas saw a decline in vertical industrial properties. This was due to a rapidly changing manufacturing landscape. Industry City saw a drop in employment by 60%, and many warehouse and office space were being underutilized. Despite the neighborhood's declining condition, the nation's original Chinese American supermarket "Winley Supermarket" was established on 8th Avenue in 1986. Sunset Park's Chinatown grew rapidly after this event, but it does not enjoy the same level of tourism as Manhattan's Chinatown. Northeast of 8th Avenue is the second largest ethnic group in the neighborhood. It is made up of Latinx family homes, Mexican American core business and family-run restaurants. According to the U.S. Census 2010, Sunset Park residents comprise nearly half of those born abroad and 51% reside in rent-controlled apartments.

The ambitious plan by Industry City to revitalize the Brooklyn waterfront is accompanied by potential gentrification and a lack of social equity responses to address resulting negative impacts, such as real estate pressures, rent increases, and reduced affordability. Industry City presented a rezoning plan called "The Sunset Park Waterfront Vision Plan 2020" that would rezone an area of the affected from an M3-1 zone to an m2-4 zone in order to expand the existing Industry City campus. The company argued that 1985's zoning had to be revised and that rezoning would eliminate outdated restrictions like square footage caps for retail developments, or change the Floor Area Ratio from 2-5. [1] One of the overarching themes was the rehabilitation of vacant spaces through adaptive reuse strategies. This would double as waterfront resilience zones, and put the neighborhood on Google for developers and tech companies. Startup Genome, an innovation and research company, says that Brooklyn's startup growth rate is greater than any other American city, with the exception of San Francisco. [2]

Rezoning of Industry City Application for NYC City Council

Despite the argument for turning the dilapidated industrial complex into an innovation-centric employment hub, the NYC City Council rejected the rezoning proposal as community members and city council officials opposed expanding Industry City by building high-end luxury housing units and hotels. UPRISE, Protect Sunset Park, and UPRISE protested the plan. The group stated that the negative implications of this proposal would override the possibility of job creation because it would encourage gentrification of a community suffering from a serious shortage of affordable housing. [3]

This brings attention to the critical problem of how to effectively uplift a local community while being mindful of the resulting social inequity. The concept of an innovative economy is essential to the development of an innovation district, and is created through Disneyfication, which is the transformation of an underutilized community into a controlled and safe environment. Industry City is committed to preserving the historic aspect of its campus and transforming the socio-economic structures into an innovative, culturally rich frontier. This Disneyfication comes at the cost of possible gentrification.

On the other hand, Industry City still faces leasing pressures with the neighborhood of Sunset Park in dire need of infrastructure improvements and increased safety requirements, especially following the recent subway shooting incident at Brooklyn's 36th street subway station in which 23 people were wounded following violent gunfire. [4] To attract long-term tenants and local visitors, the government needs to support local businesses and large-scale developments to attract private investments and encourage public-private partnerships.

Impact Assessment

Industry City's success relies on the community's determination to lift residents and to make progress towards empowering the neighborhood, which has had a history in underdevelopment. This has been a key factor in the approval process and funding. It also helped to engage well-known architects and urban planners. Public support can greatly benefit revitalization projects in poor neighborhoods. In public-private joint projects such as Industry City, creative financing and incentive funding are valuable financial resources. Industry City is expected to increase gentrification. But, it is also more likely to create a revenue-generating and safe environment essential to the ongoing development of the area.

Grand Opening of Japan World is a space designed for small business owners.

References:

[1] Kimberly La Porte (The Brooklyn Navy Yard): A Mission-Oriented Method of Industrial Heritage Reuse. 2020. Theses (Historic Preservation). 691

[2] Chan, Stephanie Yee-Kay. Columbia University. May 2018, "Innovation Intention and Inequities"

[3] Grant, Peter. "Singapore’s Gic Buys Stakes In Brooklyn's Industry City," The Wall Street Journal. Dow Jones Company. 12 Feb. 2020

[4] Industry City. Wikipedia. Wikimedia foundation, 19 December 2021.

[5] Menchaca, Carlos. New York City Council Member District 38.

Startup Genome. "Top Global Ecosystems - Best Startup Cities - Startups Rankings." Startup Genome,

[7] Spivack, Caroline. "The Industry City Megadevelopment That Wasn't, and How the Deal Fell Apart." Curbed, Curbed, 23 Sept. 2020.

[8] "Police arrest suspect in New York Subway Shooting, 'without Incident. BBC News. BBC, 14 April. 2022.

[9] Chan, Stephanie Yee-Kay. Columbia University, 1 Mai 2018.

[10] Menchaca, Carlos. New York City Council Member District 38.

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