Pratt Center

February 9, 2016

Enhanced Business Areas and 25 Kent

Testimony to Community Board 1, Brooklyn
Adam Friedman, Director
Tuesday, February 9th 2016

Thank you for the opportunity to testify today. I’m Adam Friedman, Director of the Pratt Center for Community Development. Pratt Center works in partnership with communities, businesses, and policymakers to build a more equitable and sustainable city. 

Just a few months ago, I stood with the Mayor to support a new industrial policy for New York City. That policy recognized that stable real estate is critical to growing manufacturing businesses and jobs. The Mayor committed to strengthening the City’s IBZs by limiting certain non-industrial uses, but the administration put off implementation pending completion of a study of the North Brooklyn IBZ.

The need to create stable affordable manufacturing space is back at the forefront of today’s hearing on City Planning’s proposal to create special “Enhanced Business Area” districts, and the associated special permit application for 25 Kent Ave. This proposal will be precedent setting, with significant implications for manufacturing businesses and jobs in the majority of the Greenpoint Williamsburg IBZ and in other IBZs citywide.

The intention behind these proposals is to create a mechanism that supports a mix of office and manufacturing uses within an IBZ. While City Planning and the co-applicants have proposed an innovative cross-subsidy model for a commercial/industrial development, this application is at best premature because the City has not moved forward with its commitment to strengthen the IBZs.

In addition, perhaps because DCP has preempted its own study, the proposed EBA has two major flaws. First, it does not address the critical and challenging problem of how to enforce a developer’s commitments to maintain space for production. Second, it is overly generous in creating a ratio of office to production space.

The ULURP materials provide no information about how the use restrictions are going to be enforced.  Unfortunately, New York has long history of weak and unsuccessful enforcement strategies in mixed use areas. In North Brooklyn the real estate market is extremely hot and the pressure to obtain the highest rents possible will be tremendous.

A good model for better enforcement can be found in San Francisco, which has a very similar “overheated” real estate market. In 2014 they created a cross-subsidy mechanism to stimulate construction of new production space through a special permit process - very similar to what has been proposed here. San Francisco, however, requires that nearly twice as much space be dedicated to production, design and repair uses (PDR) as New York does, and has negotiated for a non-profit organization to own and manage this space to ensure that it remains viable for manufacturing. During negotiations on Hundred Hooper, the first of these mixed use projects to apply, the developer agreed to transfer ownership of a portion of the PDR space to PlaceMade, a new non-profit organization established to provide affordable production space to strengthen San Francisco’s industrial sector.[1]

The benefits of non-profit ownership are well documented and New York has been a leader in this field.  The Brooklyn Navy Yard, the Greenpoint Manufacturing And Design Center and Evergreen are experienced non-profit developer-managers, all of whom are located in North Brooklyn. The benefits of having them own and operate industrial properties include long-term commitment to industrial use, reducing displacement and encouraging tenants to reinvest in and grow their businesses. New York is now in the process of launching an Industrial Development Fund that will prioritize support for non-profit developers to play the role envisioned here.

For that portion of the production space that is privately owned, San Francisco requires that the developer produce a “PDR business plan.” This plan must include identification of the target industries and marketing strategies, proposed rent levels and how the space will be kept accessible to those sectors, and how tenants will be integrated into the city’s workforce development and First Source Hiring programs.  In addition, the C of O for the office space is conditioned on the C of O for the production space, there are deed restrictions and periodic reporting requirements.

Second, the ratio of office to production space is excessive. In an EBA, a development could have almost 5 sq. ft. of office or retail for every square foot of industrial. In San Francisco, the ratio is 2:1, and 33% of the building has to be for PDR uses. 

Let me conclude by emphasizing that our concerns with the lack of enforcement and overly generous terms of the proposed deal are not a reflection on the developer who has been an engaged member of the community for years.  But the zoning has to work regardless of who the developer is, regardless of any one person’s particular vision or contribution to the community. As we all know only too well, a developer can sell anytime. It is essential that the community benefits, in this case the space for production jobs, be ironclad and the best way to accomplish this is through ownership of that space by a local, community based non-profit.

I urge that the text for the new EBA district not be approved unless:

  1. The text is amended to provide a greater percentage of space be dedicated for production;
  2. That the use restrictions apply to the underlying M1 zone that is the current IBZ; and
  3. That the prospective developers have to provide a “business plan” detailing their target market, rent level and marketing strategy, and provisions for local hiring.

Further, the special permit for 25 Kent should stipulate that some of the production space have to be owned by a local, community based nonprofit dedication to preserving production jobs.

[1] Both Pratt and Greenpoint Manufacturing and Design Center have provided technical assistance to PlaceMade.