Mayor Michael R. Bloomberg and Speaker Christine C. Quinn today announced a $10 million fund – capitalized by Goldman Sachs – to provide growth capital to New York City food manufacturers, a $10 million fund to transform out-of-date industrial space across the five boroughs, and 20 other initiatives to strengthen the City’s industrial sector and help small industrial businesses stay and grow in New York City. In total, the programs will revitalize, modernize, and preserve up to 9 million square feet of underutilized industrial space, and create and retain up to 30,000 direct and indirect industrial jobs, generate annual payroll earnings of more than $900 million and more than $150 million in City tax revenue. The 22 initiatives will support and strengthen the City’s industrial sector, an integral part of the City’s economy that has faced serious challenges in recent decades, but now offers real opportunities for growth and development. The initiatives resulted from an inter-agency review of the City’s industrial policies, led by Deputy Mayor for Economic Development Robert K. Steel, New York City Economic Development Corporation President Seth W. Pinsky, Department of Small Business Services Commissioner Robert W. Walsh and City Planning Commissioner Amanda M. Burden.
“New York City’s economy has evolved a great deal since its former days as a manufacturing capital, but there remain major assets for small industrial businesses that, if capitalized on, can help the economy grow,” said Mayor Bloomberg. “We’re constantly looking at new ways to diversify and strengthen our economy, and these 22 initiatives are sensible steps that can make a real difference for local industrial businesses and a real difference for our local economy.”
“This industrial plan is yet again proof that through public and private partnership, New York City can look at innovative ways to jump start our economy and create jobs,” said Speaker Quinn. “The City can only prosper by encouraging growth in the industrial sector, and this initiative will do just that. The Council’s $10 million small manufacturing fund and the other initiatives in this plan will provide the much needed financial lifeline to not only turn aspiring entrepreneurs into small businesses owners, but will also strengthen the existing industrial businesses as well. I would like to thank my Council colleagues, Mayor Bloomberg, Deputy Mayor Steel, NYCEDC President Seth Pinsky, SBS Commissioner Robert Walsh, and DCP Commissioner Amanda Burden for making this a reality.”
“We are pleased to expand 10,000 Small Businesses in New York, to partner with the City and provide capital to food manufacturers, who play a critical role in New York City’s economy,” said Lloyd C. Blankfein, Chairman and CEO of The Goldman Sachs Group, Inc.. “This initiative furthers Goldman Sachs’ commitment to help small businesses grow and strengthen their communities.”
Along with the City’s recent and planned commitments of more than $110 million in value, the initiatives will further bolster the industrial sector by leveraging tens of millions of dollars in private investment. Programs include a partnership with Goldman Sachs to create a $10 million fund to offer loans and technical assistance to food manufacturers to grow their businesses, as well as a $10 million fund established by the New York City Council and administered by the New York City Economic Development Corporation to activate, modernize, and preserve out-of-date industrial space in the City. With these investments, the City is looking to build upon its ongoing investment and support of industrial businesses, such as those at the Brooklyn Navy Yard, a thriving City-sponsored 300-acre industrial district that supports more than 240 businesses and 5,000 jobs.
An extensive inter-agency review of the City’s industrial policies found that while the City’s industrial sector has been declining in line with national trends of 8 percent annually over the past 10 years, there are certain subsectors showing stability and growth. As offshoring costs increase, it is anticipated that industrial activities will continue to grow nationwide. New York City in particular offers unique location-based advantages for industrial activity, including a population of about 8.4 million, access to a large workforce and highly-skilled labor, and one of the nation’s busiest ports based on import volume. The review also found that industrial businesses in the City are challenged by a lack of building stock appropriate for modern industrial uses, higher costs, and difficulty maneuvering City processes. Industrial sectors account for 16.3 percent of New York City’s overall private employment and more than 25 percent of employment outside of Manhattan, and industrial jobs have a mean wage of $64,000.
The new programs and initiatives fall into three categories: Increasing access to updated, affordable, and right-sized industrial spaces; creating new financing resources and increasing access to existing programs; and better aligning City resources with industrial businesses’ needs.
1. Increase access to modern industrial space and strengthen Industrial Business Zones
The City will allocate $8 million in the City Council Small Manufacturing Investment Fund through a competitive bid process for the reactivation, renovation and subdivision of privately held vacant industrial loft building/space in New York City. The renovation must be shown to primarily support the creation of industrial space, and a long term restrictive covenant will be required to ensure the long-term continuation of these uses.
With the use of $2 million from the newly formed City Council Small Manufacturing Investment Fund, the City will create a food manufacturing step-up space by renovating and reactivating Building 3 at La Marqueta in East Harlem. The funding will be used to provide much-needed capital upgrades to the site, create roughly eight walk-in cooler spaces, and develop up to three small food manufacturing spaces. NYCEDC will offer the newly renovated space to small business looking to expand their production capacity and create jobs and will complement the adjacent food incubator, launched by the Council, NYCEDC, and Hot Bread Kitchen in 2010.
NYCEDC is releasing a Request For Proposals (RFP) offering low cost rent, or rent abatements to businesses/developers willing to renovate an approximately 20,000 square foot currently vacant City-owned industrial property at Brooklyn Army Terminal. By offsetting renovation costs with low cost space, this initiative will spur local industrial growth in Brooklyn.
NYCEDC recently announced a developer for the Federal Building in Sunset Park for light manufacturing purposes. This project will create as many as 1,300 permanent industrial jobs and 400 new construction jobs, serving as a catalyst for more industrial redevelopment on the Brooklyn waterfront and in the rest of the City.
The City is releasing an RFP for industrial and food-related development at the Hunts Point Halleck industrial Site. The site is among the most desirable parcels of land in Hunts Point and is expected to receive considerable interest from the development community.
The City and State are contributing at least $112.5 million in value toward the redevelopment of a new market facility for the Hunts Point Terminal Produce Cooperative in the Bronx. The 660,000 square foot new facility will modernize and upgrade a critical piece of the City’s food infrastructure and serve as a source of good industrial jobs. The Co-op recently signed a lease extension, keeping it in the Bronx for at least an additional three years while continuing to work towards a long-term lease extension and plans for a new market.
NYCEDC has dedicated up to $9.6 million towards the renovation and subdivision of larger floor plate spaces at Brooklyn Army Terminal. Approximately 300,000 square feet of large vacant units in Building B at Brooklyn Army Terminal will be subdivided into smaller units, ranging from 2,500 to 10,000 square feet.
NYCEDC will continue to prioritize industrial uses for City-owned industrial sites through its competitive RFP process.
A proposal for a new special permit for large hotel uses in Industrial Business Zones will soon be announced to ensure the hotels meet the goals and intent of the zones. Once proposed this new special permit will itself require a public approval process.
2. Create new financing resources and increase access to existing programs
Through its 10,000 Small Businesses Initiative, Goldman Sachs and NYCEDC are creating a $10 million fund to provide loans to food entrepreneurs to grow their business in New York City. This significant public-private partnership represents a unique opportunity to expand the City’s economy while catalyzing the entrepreneurial community. Food manufacturers are a key component of the City’s economy with more than 900 food manufacturers, employing some 19,200 individuals – including 2,500 self-employed individuals – in the City. Small businesses in the food manufacturing industry looking to expand confront an exceedingly difficult financing environment. Providing capital to these underserved businesses during critical growth stages is important to ensure the overall success and expansion of this industry. NYCEDC will issue an RFP to select a Community Development Financial Institution lending partner that will provide financing to qualifying food manufacturers in the City.
NYCEDC has formed the Industrial Development Program to provide construction and permanent financing, alongside typical lenders, for City-sponsored industrial projects. This innovative financing program will be launched with the Hunts Point Halleck Industrial Site RFP.
The Industrial Development Authority is committing to increase its transactions over the next fiscal year, resulting in assistance to at least twenty new businesses.
The Department of Small Business Services will establish a practice dedicated to providing industrial and manufacturing businesses with one-on-one consultations regarding incentives programs that can lower their costs when relocating, expanding their facilities, purchasing equipment, modernizing, or growing their workforce. Qualified industrial and manufacturing businesses of all sizes will be able to learn about and receive in-depth technical assistance in applying for these programs.
A newly formed Industrial Business Advisory Council made up of local industrial businesses, property owners and industry advocates will advise the City on issues facing the industrial sector.
NYCEDC will provide $300,000 in funding and release an RFP for the creation of approximately three new industrial Business Improvement Districts (BIDs) within Industrial Business Zones and Ombudsman areas. New industrial BIDs will serve as a sustainable source of funding to provide additional services desired by industrial businesses, including, but not limited to, sanitation, public safety and graffiti removal.
3. Better align City resources with industrial businesses’ needs
NYCEDC will build upon its previous success of dedicating staff to specific sector policy development and will establish a full-time “desk” at NYCEDC’s Center for Economic Transformation dedicated to industrial sector policy. The head of the policy desk will serve as the City’s point person on all industrial policy development and implementation, and will work in coordination with the Department of Small Business Services staff dedicated to Industrial Business Zone Service Provider administration and other Small Business Services programs, such as Manufacturing Workforce1, Business Solutions, Business Express and incentive programs.
NYCEDC will manage a public competition to identify innovative ideas for new industrial or manufacturing start-up companies, with grants, subsidized office or industrial space, guidance and technical assistance, and free promotion and press coverage to winning companies.
A new Industrial Business Zone will be developed in Staten Island, in line with the findings of the North and West Shore interagency studies, to protect its important maritime and industrial areas.
NYCEDC is conducting a study to determine ways to enhance the City’s value proposition in the rapid prototyping and fabrication sub-sector. The study will examine the level of demand, existing capabilities already available in NYC, and recommend how to provide and market the necessary resources to meet NYC entrepreneurs’ prototyping and fabrication needs.
The City will initiate business and agency networking events to hear directly about operational concerns and encourage networking and collaboration amongst industrial businesses.
City agencies with oversight in industrial areas will continue to meet on a regular basis to ensure a cohesive City response to business concerns.
“Through our extensive study of New York City’s industrial sector, we found that too many industrial businesses in the City are limited by factors largely beyond their own control,” said Deputy Mayor Steel. “Today, we are using our research to create real solutions, by providing necessary capital for growth in our food manufacturing industry, reactivating the City’s industrial space for modern uses, and offering other key initiatives to spur additional economic growth in New York City.”
“Though, as in the rest of the country, New York City’s industrial sector has faced real challenges in recent years, the sector remains an important source of jobs for large segments of the City’s population,” said New York City Economic Development President Seth Pinsky. “Now, with independent economists forecasting the potential for a rebound in the sector, we are turning to innovative public-private structures to ensure that the City stabilizes and expands the sector. In so doing, our aim is to create more good middle-class jobs, catalyze entrepreneurship across the five boroughs, and boost the City’s steady economic growth.”
“The initiatives announced today are important building blocks in the creation of a modern manufacturing sector,” said Adam Friedman, Director of the Pratt Center for Community Development, which provides technical services, research and marketing assistance to New York manufacturers. “Renovating and right-sizing space, promoting high-design, high-value sectors that provide quality jobs, and moving to strengthen zoning protection of valuable manufacturing land are important steps toward ensuring that the sector can thrive and grow in New York City.”
“These exciting new initiatives will offer critical support and tools aimed at growing small business across the five boroughs.” said Department of Small Business Services Commissioner Rob Walsh. “Together with our private sector partners, we are addressing the significant challenges facing small business owners and entrepreneurs in the City, and providing new opportunities for these businesses to grow and thrive.”
“Today’s announcement is one step closer towards generating a sustainable and robust economy by providing much needed resources for small industrial and manufacturing businesses,” said Council Member Diana Reyna, Chair of Small Business. “I want to thank Speaker Quinn, NYCEDC and Goldman Sachs for investing in our industrial sector and supporting small businesses that are providing the quality jobs in our communities.”
“Our small business entrepreneurs will be a major factor in the recovery of our economy in New York City,” said Council Member Karen Koslowitz, Chair of Economic Development. “We need to foster and harness our industrial base to allow creative entrepreneurs to flourish. I applaud Speaker Quinn and the Administration for their collaboration and hard work in this effort.”
“I am proud that the City Council is making an additional investment at La Marqueta, this time to renovate and reactivate Building 3,” said Council Member Melissa Mark-Viverito. “The newly renovated step-up space in Building 3 will build on the strong investment already made by the Council in La Marqueta and will continue to make this area of El Barrio/East Harlem a central hub for food manufacturing in the City of New York. I thank Mayor Bloomberg and especially Speaker Quinn for her leadership and vision around issues of food manufacturing.”
For more information about New York City’s industrial sector and steps the City is taking to assist industrial businesses, visit www.nyc.gov.