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Brooklyn Reimagined With Heritage Reuse and Innovation Centeric Mixed-Use Campuses by Industry City

Dec 3, 2022

Project Summary

Sunset Park is an area between Gowanus/Bay Ridge that is waterfront bound. It runs from 15th street to 65th, between 9th Avenue along the 8th avenue corridor. Industry City is a new mixed-use development set on 35 acres of centuries-old 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. On 65th Street, there is another one. It was the location from which troops were evacuated during World War I. The third one is the Bush Terminal, which is where Industry City exists today, and it used to be the port for manufacturing goods coming in and being warehoused for further distribution in New York City. All three developments experienced peak employment between the years 1930-1960 but hit a long period of disrepair in the 1970s when large scale manufacturing shifted to other US cities. The massive government subsidies that were provided to the government for decades of neglected maintenance quickly brought the Brooklyn Navy yard and Brooklyn Army Terminal back into life.

Brooklyn Navy Yard has been a model of industrial heritage use. Andrew Kimball, who led the effort to take $280 Mn out of the City of New York for infrastructure improvements, and leveraged $1. Billion of private investments in order to create thousands of jobs for the innovation economy. [1] In August 2013, Mr. Kimball joined Industry City and directed the redevelopment efforts of the privately owned, long-underutilized industrial facility. The 6 million square feet. It is a mixed-use area that has 6 million sq.ft. Jamestown Properties is part of the co-ownership of Industry city. 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 to preserve industrial heritage while promoting innovation economy principles. This allows for the creation of modern manufacturing standards. However, this is not about making physical products. It also facilitates a new type manufacturing at intersection of design and technology. The 5000 sq.ft. The 5000 sq.ft. of space needed to separate the parts and assemble them in one product can now be done in a 500 sq. You can use technologies like 3-D printers or laser cutters to cover a lot of square footage.

Jim Somoza (Managing Director at Industry City) described a "campus view" of the development, with 16 office buildings being separated and the ground floors connected via a seamless hallway. While standing on one of the former railway platforms used for industrial transportation, Jim Somoza referred to a "campus Vision". Every building has its own characteristics, such as the location of tenants and the waterfront view. Mr. Somoza explained why this adaptive reuse project was so much more than transforming an old industrial site into office space. It also aimed to preserve the neighborhood's character and bring vibrancy, connectivity, and character. 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 project includes $125 Mn[1] in capital investments by owners over the span of 10 years and a recent stake purchased by a Singapore sovereign-wealth fund GIC Pte. Ltd. put a value of $1.3 billion on the sprawling Industry project at the close 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. A total campus area of 600,000.ft. and a coworking area of 30,000.ft. When marketing the property, they knew that they weren’t looking to attract traditional Finance, Insurance, Real Estate, (FIRE), tenants. These tenants would often choose traditional Manhattan office space. The team worked hard to attract companies that specialize in design, marketing, design, and technology. From the beginning, it was about building community and creating an innovation space. The retail portion covers about 1,000,000 square feet. You can lease the entire space to "local, but 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 is the Californian couple that invested their entire lives to bring Korean comfort food into Brooklyn at Ejen. The developers placed special interest in the success of the vendors, especially during the pandemic. They made reasonable concessions to all tenants and managed to keep them all. The vendors returned more resilient and built a community around this shared resilience. To complement their retail outlets, vendors like Colson Bakery (Lilac Chocolate) can lease wholesale space. This is an ideal retail strategy. The vendors are able to showcase the product development cycle and deliver it fresh to their customers. The developers applied a countercyclical approach to attracting office and retail tenants. Colson Bakery is a local wholesaler which provides baked goods to Brooklyn and Manhattan. Jamestown located Colson Bakery at a central site and helped them launch their retail business, making them an anchor tenant. The Colson Bakery Team initially resisted opening an actual retail location, but the company has seen great success and is now looking to expand. Industry City was home to more local brands like Sahadi's Pizza and Frying Pan as foot traffic increased.

Industry City has a range of rents and asset classes.

Post-Covid, 60-70% of the office tenants at Industry City have returned, as compared to a 20% rate 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 that you note that the Industry City project will not be a copy-paste of the Chelsea Market business model. Industry City is built heavily on community and has a destination oriented approach. It isn't looking for tourists from overseas, but local New Yorkers with an interest in exploring New York's 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 the result of ideas, design and quality, while still retaining the industrial elements of the development.

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.

Possible Setbacks

Beginning in the 1950s, Brooklyn waterfront industrial developments experienced a general abandonment of vertical urban industrial properties due to a drastically changing manufacturing landscape. Industry City's employment base had declined by 60% by 2000 and many of the warehouses and offices were not being used. Despite the deteriorating conditions of the neighborhood, in 1986 the nation's first Chinese American supermarket called "Winley Supermarket" opened on 8th Avenue and 56th Street. 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 2010 U.S. Census, nearly half of Sunset Park's residents are foreign-born and about 51% live in rent-controlled apartments.

Industry City's ambitious plan to revitalize Brooklyn's waterfront comes with potential gentrification, a lack of social justice responses to address the resulting negative effects, including rent increases and real estate pressures. 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 updated and rezoning would eliminate outdated restrictions, such square footage caps for retail developments or changes in the Floor Area ratio (FAR) 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. According to Startup Genome, a leading innovation and research firm, the growth rate of startups in Brooklyn is higher than in any other city in the United States, except for San Francisco. [2]

Rezoning of Industry City Application for NYC City Council

The argument to transform the abandoned industrial complex into an innovation-centric hub for employment was rejected by the NYC City Council. Residents and officials opposed the expansion of Industry City through the construction of high-end luxury apartments and hotels. UPRISE and the Group to Protect Sunset Park resisted the plan. They stated how the proposal would fuel gentrification within a community that has a shortage of affordable housing. [3]

This raises the important question of how to uplift a local community without ignoring the social inequity. To develop an innovation district, the concept of an innovative economic is vital. This is accomplished through Disneyfication. Disneyfication is the transformation and control of underutilized communities to create a controlled, safe environment. Industry City will preserve the historical character of the campus by transforming the socioeconomic structures into a unique cultural and vibrant frontier. But 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] In order to attract long-term tenants as well local visitors, the government should support local businesses and large-scale developments that attract private investments.

Impact Assessment

Of great importance to the Industry City project's success has been the community's commitment to uplift residents and the neighborhood's empowering progress in overcoming a history of underdevelopment and underinvestment. This has enabled the project to secure the funding needed and have also allowed it to be approved. Public support can be a huge benefit for revitalization projects in economically distressed areas. Public financing, including creative financing, and incentivising funding are great financial options. This is especially true for joint-public projects like Industry City. Industry City will increase gentrification. However it is more likely for the establishment of a revenue-generating and safe environment which is vital to the future development of the area.

Grand Opening of Japan World, a space that empowers small businesses

References:

[1] Kimberly La Porte, "The Brooklyn Navy Yard": A Mission-Oriented model of 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 for Brooklyn's Industry City," The Wall Street Journal. Dow Jones Company. 12/02/2019

[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 This Wasn't, And How the Deal Fail." Curbed. Curbed. 23 September 2020.

[8] "Police Arrest Suspect In New York Subway Shooting "Without Incident" BBC News, BBC 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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