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Brooklyn Reimagined: Heritage Reuse and Innovation Centric Mixed Use Campus by Industry City

Dec 3, 2022

Site Summary and Project Background

Sunset Park, which is located between Gowanus & Bay Ridge, has a waterfront-bound area that spans between 15th and 65th streets. The neighborhood stretches between 9th Avenue and 8th Avenue. Industry City is a mixed-use development that sits on 35 acres of historic industrial land in Sunset Park. It is one of three large historical industrial complexes on the Brooklyn Waterfront. One of them is Brooklyn Navy Yard. Andrew Kimball (CEO of Industry City) led the transformation over 300-acres of the former Naval shipbuilding plant. The Brooklyn Army Terminal, located at 65th Street is the other. This is where soldiers were sent out in World War I/World War II. The Bush Terminal is the third. It is where Industry City is today. This terminal used to be the port that brought in goods for storage and distribution in New York City. All three of the developments were at their peak in employment between 1930-1960. However, the terminals fell into serious disrepair after the 1970s when large-scale manufacturing was moved to other US locations. Massive subsidies from the government were used to bring the Brooklyn Navy Yard and Brooklyn Army Terminal back to life after decades of neglect.

Brooklyn Navy Yard is a pioneer in industrial heritage reuse. Andrew Kimball led the project and received $280 Mn from New York City for basic infrastructure improvements. He also leveraged $1 Bn of private investment to create thousands of new jobs in the innovation economy. [1] Mr. Kimball joined Industry City in August 2013 to lead the redevelopment work at the abandoned, privately-owned industrial facility. The 6,000,000 sq.ft. This mixed-use space has been designed to attract commercial and retail tenants from the various boroughs of Brooklyn. Jamestown Properties and Belvedere Capital are part of Industry city. Angelo Gordon Co. Cammedy's International is FBE Limited. Jamestown Properties which is a design-focused real estate investment and management company is the brainchild behind the vision and the leasing strategy of Industry City having executed iconic projects such as Chelsea Market in New York City and Ghirardelli Square in San Francisco. 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 is about industrial heritage reuse and innovation economy principles. This translates into place making for modern manufacturing standards that is not simply about making physical products but facilitating a new kind of manufacturing at the intersection of design, art, technology, and engineering. The 5000 sq.ft. of space earlier required to assemble segregated parts in a single product can be achieved in a 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, Managing Director at Industry City referred to a "campus vision", with the entire development divided into 16 office buildings and the ground floors of each building connected via a seamless hallway while standing at one of the former train platforms used for industrial transportation during a ULI NYC site tour. Each building has its own unique features, including the tenants and the waterfront view. Mr. Somoza explained that this adaptive reuse project was more than just about transforming an old industrial area into office space. It also sought to preserve the neighborhood's character while adding vibrancy and connectivity. 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. Over the past 10 years, $125 million [1] was invested in capital and a stake was recently purchased by GIC Pte, a Singapore sovereign wealth fund. Ltd. has estimated the value of the sprawling Industry district project at $1.3 Bn as of 2020. [2]

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

Industry City has adopted the "shared-office" model for its office tenants. The 600,000 sq.ft. area is spread over by the developers. of total campus area, alongside a coworking space of 30,000 sq.ft. The team recognized that they weren’t looking to attract traditional Finance, Insurance, Real Estate, (FIRE), tenants. These tenants would have preferred a Manhattan office space. They sought out firms that were focused on design, marketing, design, and technology. Since the inception, the goal has been to build a community as well as provide a creative environment for innovation. About 1 million square feet of retail space is available. of the total space with the leasing strategy of "local yet global" users.

Many of the restaurants are unknown and unique. They are not the go-to outlets plucked from Manhattan and transported into Sunset Park. These mom-and-pop shops are mostly independent and run by women from all walks of the country. One highlight was a Californian couple, who put their life savings into bringing Korean comfort food to 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. These vendors were more resilient than ever and formed a community around 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 way the vendors can showcase the development cycle of their products while delivering it fresh to customers. The developers took a countercyclical approach when trying to attract office and retail tenants. Colson Bakery was a wholesaler that supplied baked goods throughout Brooklyn and Manhattan for many years. Jamestown located Colson Bakery in a central location. They assisted with the launch of a retail business arm and transformed them into an anchor tenant. Although initially, the Colson Bakery team resisted opening a retail store. However, they have seen great results and are now considering expanding their business. Industry City saw more local brands, such as Frying Pan and Sahadi's, open shop due to increased foot traffic from office tenants.

Industry City has a range of rents and different asset classes.

Post-Covid saw 60-70% return to Industry City office tenants, compared to 20% for Manhattan companies. This has resulted in foot traffic maintaining a level of 12,000 per hour on weekdays, where 16% are visitors and 84% work there, and 9,500 per hour on weekends. The 84% visitors and the rest of employees make up 84%.

It is important to understand that the Industry City Project is not a copy-paste model of the Chelsea Market Business Model. Industry City has a destination-oriented model and is heavily built on the community. It isn't looking for tourists from overseas, but local New Yorkers with an interest in exploring New York City neighborhoods. He likes to refer to their business as transportation. His team worked hard to find tenants and create a design strategy to transport visitors to foreign destinations. Open supermarket, the Japanese Market allows you to watch a blacksmith and shop for fresh, local sushi. A Mexican native will be operating a unique Mexican market in the future. Industry City is a culmination of ideas and design. It retains 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 community and local governments were key to obtaining tax credits in order to brownfield redevelopment.

Setbacks

The 1950s saw the abandonment of Brooklyn waterfront industrial estates due to a dramatically changing manufacturing landscape. By the 2000s, the employment base around Industry City had dropped by 60 percent and much of the warehouse and office spaces were underutilized. In spite of the poor condition of the neighborhood, the first Chinese American supermarket in America, "Winley Supermarket," opened on 8th Avenue. This marked the onset of the growth of Sunset Park's Chinatown, which does not experience the tourism of 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 U.S. Census 2010, Sunset Park has nearly half its residents who are foreign-born. About 51% live in apartments that rent.

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. In early 2020, Industry City put forward a rezoning application called "The Sunset Park Waterfront Vision Plan 2020" to rezone a portion of the affected area from an M3-1 zoning district to an M2-4 zoning district to expand the existing Industry City campus development. According to the company, the 1985 zoning needed revision. Rezoning would remove outdated restrictions such as the square footage cap for retail developments and the change in the Floor Area Ratio (FAR), from 2 to 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 is a top innovation and research organization that says Brooklyn's startups are growing faster than any other city in America, save San Francisco. [2]

Rezoning of Industry City Application to NYC City Council (8)

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 and groups Protect Sunset Park protested against the plan. UPRISE stated that the proposal would encourage gentrification, which would result in a significant shortage of affordable housing. [3]

This highlights the crucial problem of how to improve a community and still be mindful of social injustice. 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 seeks to preserve the historical aspects of its campus, transforming socio-economic systems into a unique, cultural and vibrant frontier. However, there is a risk of gentrification from this Disneyfication.

Industry City is still facing leasing pressures. Sunset Park, a neighborhood in Brooklyn, needs infrastructure improvements and more safety requirements. This comes after the recent shooting at Brooklyn's 36th Street subway station, where 23 people were killed in 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 is largely due to the community's dedication to uplift residents, and the neighborhood's empowerment progress in overcoming a history of 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 be a huge benefit for revitalization projects in economically distressed areas. In public-private joint projects such as Industry City, creative financing and incentive funding are valuable financial resources. Industry City will likely increase gentrification but it is also more likely to create a safe, revenue-generating environment that is essential for the development of the neighborhood.

Grand Opening of Japan World: A space specifically designed to support small businesses

References:

[1] Kimberly La Porte - "The Brooklyn Navy Yard: An Mission-Oriented Model for Industrial Heritage Reuse" (2020). Theses (Historic Preservation). 691

[2] Chan, Stephanie Yee-Kay. Columbia University. 1 May 2018.

[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. Startup Genome

[7] Spivack, Caroline. "The Industry City Megadevelopment It Wasn’t and How the Deal Failed." Curbed. Curbed. 23 Sept. 2020.

[8] Police Arrest Suspect in New York Subway Shootings 'without Incident.' BBC News, BBC News, 14 Apr. 2022.

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

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

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