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Bill and The Metal Mill in Loopholeville:

Scenarios for Industrial Development in Greenpoint / Williamsburg

Interboro Partners
Interboro Partners Project Team: Tobias Armborst, Daniel D’Oca, Georgeen Theodore and Riley Gold

During the 19th century, New York City emerged as one of the country’s leading industrial hubs. Brooklyn, with its waterfront factories that stretched from Greenpoint to the north to present-day Sunset Park to the south, was an industrial powerhouse in its own right: by 1880, Brooklyn had become the fourth largest producer of manufactured goods in the nation.1 1880 also marks the beginning of the second great wave of European immigration, which saw an influx of Russian Jews, Italians, and Poles, as well as a mixture of Swedes, Norwegians, Danes, and Finns, all of whom found employment in Brooklyn’s factories.

During Brooklyn’s great industrial age, Greenpoint and Williamsburg thrived with waterfront factories, shipyards, and oil refineries. Adjacent neighborhoods housed the workers and their families, creating tight-knit, mixed-use, communities.

Throughout most of the 20th century, foreign-born workers could still find relatively stable, high-paying jobs in Williamsburg. The city’s zoning map--with generous M1, M2, and M3 designations--could be cited as evidence that the city’s leaders supported industry. Yet by the 1970s, much of the area’s heavy industry was relocating, enticed by cheaper rents outside the city, leaving empty waterfront warehouses and factories in its wake.

Enter our fictional protagonist Bill.

In 1972, Bill unexpectedly inherited a one-story building on Wythe and Banker, in the heart of what would later become the “Greenpoint / Williamsburg Industrial Business District” - an “expensive industrial neighborhood in the most expensive city in the world.”2 The tenant that came with the building--a small metal mill with manually controlled equipment--has always been pretty low-maintenance, and is always on time with the rent checks.

The visits Bill makes to Wythe and Banker from his home in suburban New Jersey are as infrequent as possible. There were apparently a few distant relatives living in “the old neighborhood,” as Greenpoint and Williamsburg were semi-affectionately called, but from Bill’s perspective, Greenpoint and Williamsburg were the ends of the earth.

By the late 1970s, many of the buildings in the neighborhood were empty. “Deindustrialization” was happening. Bill’s luck could have been better--he could have inherited an office building in midtown Manhattan, or even a nice single-family house out in Bay Ridge--but things could be worse: at least he still had a tenant.

Throughout the 1980s, as deindustrialization continued full-speed ahead, Bill considered selling the building, but the recent transformation of SoHo in downtown Manhattan from a derelict manufacturing district not so dissimilar from Greenpoint / Williamsburg into the city’s most bohemian zip code compelled him to hang on. In SoHo, artists got rich converting (or “adaptively reusing”) buildings like his. Why couldn’t he?

In 1992, a cover story in New York Magazine caught his attention. It was called “The New Bohemia: Over the Bridge to Williamsburg.” The picture on the cover featured a group of young, white, artist types seated at a French-looking cafe, sipping beer. Across the street, in the shadow of the Brooklyn Bridge was a building that looked just like his. This was inspiring stuff! Bill nodded along as he read: “In the seventies, it was SoHo. In the eighties, the East Village. In the nineties, it will be Williamsburg.” In the same article, a member of the community board said: “[Developers] want to gentrify the area with condos, which would lead to a domino effect, changing the neighborhood.”3

Williamsburg and Greenpoint still seemed like the end of the earth to Bill - the last place people who have any kind of choice about where to live would live, but who was he to argue?

As the 1990s progressed, New York Magazine’s prediction appeared to be coming true. Bars, cafes, and art galleries started popping up around the Bedford L station. Suddenly, there were young people everywhere, many of whom could be seen coming in and out of buildings that looked like the one he owned on Wythe and Banker. Was this the new face of adaptive reuse?

The late 1990s brought more of the same: soon there would be a bar, cafe, and an art gallery on every block. Soon everything would be bohemianized. Rents were skyrocketing, and it seemed that there was a real estate broker on every corner. There was money to be made here. People were cashing in.

But the intersection of Wythe and Banker looked much like it always had: decrepit. Landlords a few blocks in any direction were getting up to $1,000 a month for a one-bedroom apartment. Bill heard rumors that over on Bedford Avenue, storefronts were going for close to $100 a square foot. And here Bill was getting $14.

Bill wanted to cash in, but Bill’s building was in an M zone, which, so far as he knew, restricted the use of the building to manufacturing. (In fact his neighbor was severely fined for allowing some artists to set up a live-work space.)

But there was hope. Bill heard Joseph B. Rose, the chairman of the city's Planning Commission under Mayor Giuliani, say that "the city had vastly more land area zoned exclusively for industrial use than necessary,” and that “manufacturing activity had for quite some time been declining in New York City. . . It was the affirmative view of the Giuliani administration that the market should have a bigger impact in deciding what greater uses should be allowed."4 Bill couldn’t have agreed more: who needs old metal mills when we could have French Cafes!

Bill was optimistic about the new mayor, a successful businessman and self-made billionaire named Michael Bloomberg, who, Bill could only assume, would also let “the free market” decide. Indeed, Bloomberg got to work rezoning the city’s manufacturing zones pretty much immediately. It wasn’t long, in fact, before rumors started circulating that the city was considering rezoning Greenpoint / Williamsburg.

The rumors proved true in 2005, when the city announced the 2005 Greenpoint-Williamsburg Land Use and Waterfront Plan, an ambitious rezoning that rezoned a seventy-five block area (encompassing 375 acres) from industrial to mixed-use residential and commercial. Unfortunately for Bill, his building was left out of the rezoning - the area around Wythe and Banker instead served as a sacrifice to the pro-industry lobby, which wanted to  “protect important concentrations of industrial activity.” 5

Bill was floored. There would be no redevelopment opportunities for Bill (his 1.0 F.A.R. remained unchanged), and neither could Bill convert his single-story warehouse to residential use. In fact, as a concession to the community board--who, unbeknownst to Bill, wanted to see some industry preserved--the area around his building was turned into something called the “Greenpoint / Williamsburg Industrial Business Zone” (GWIBZ). What on earth was that, and what did it mean for his dreams of redevelopment?

Bill did some homework. In response to a 2005 study that found that the redevelopment of manufacturing areas was putting the city at risk of "losing viable industrial employers," Bloomberg established 16 “Industrial Business Zones”--five each in the Bronx and Queens, and six in Brooklyn and Queens--that Bloomberg claimed would “foster industrial sector growth by creating real estate certainty.” Defined as “zones where expanded business services are available for industrial and manufacturing businesses,”6 IBZs are entitled to tax credits, zone-specific planning efforts, and direct business assistance. The GWIBZ contains 85 known businesses, and employs at least 1,440 people in manufacturing, wholesale trade, and fabricated metal product manufacturing, among other things.

Bill didn’t find this encouraging. Tax credits, business assistance and the like might help his tenant, but they sure wouldn’t help him. Making matters worse, Bloomberg also created The Mayor's Office of Industrial and Manufacturing Businesses (MOIMB). Housed in the Department of Small Business,  Services, MOIMB’s task was to help manage the IBZs, assist businesses with incentives and tax credits, and serve as an advocate for industrial preservation and development.

Was this Bloomberg guy in favor of letting the market decide or wasn’t he? It seemed hard to tell. Maybe he was just hedging his bets?

In any case, Bill is now at a crossroads. What will he do? Let’s consider a few possibilities.

Scenario 1: Bill can help build “Loopholeville” 

Bill was driving to his building one day when he noticed a strange thing: two blocks away, still inside the boundaries of the GWIBZ, a new bowling alley opened. But this was no ordinary bowling alley: this was a hipster bowling alley, with a bar, a state-of-the-art DJ booth, and a concert stage. On an adjacent block, a warehouse had been repurposed into something called a “biergarten.” It too was buzzing. Across the street, in a handsome, 5-story brick building that appeared to be in the midsts of an ambitious renovation, a sign on the front door read “coming soon: Wythe Hotel.”

Bill was confused: wasn’t this kind of stuff illegal in manufacturing zones? And anyway, wasn’t the point of the IBZ designation to nurture industry?

But Bill was also curious: after all, he was still only getting $14 per square foot from his metal milling tenant. Whatever a biergarten was, it presumably demands more.

Bill did some homework. A closer look at the IBZs revealed they weren’t protected from potentially conflicting uses, such as big box retail and supermarkets. Indeed, most IBZs are in M1 or M2 zones, in which a hotel, big-box retail store, or large office building can be built “as-of-right.” How did Bill not know that manufacturing isn’t the only thing that can happen in a manufacturing district?

Bill gave notice to his tenant of nearly forty years that it was time to leave. He put the property on the market and within weeks he had lined up his new tenant: a biergarten that paid $32 per square foot.

Within a few years, the once productive neighborhood would become yet another New York entertainment district brimming with amenities for middle and upper class consumers. Bill eventually sells the property for a lofty sum, and by then the area has the highest concentration of bowling alleys and biergartens in North America.

Scenario 2: Bill can hold out

The city was still hemorrhaging manufacturing jobs, right? And eventually, the neighborhood would have to be rezoned, wouldn’t it? After all, Bloomberg was a rezoning machine! As Bill learned in a report by the Pratt Center, between 2003 and 2008, 95 rezonings converted manufacturing districts into non-manufacturing districts; the overall result, according to research conducted by the New York Industrial Retention Network, was a loss of 23.4 million square feet of industrial space. Partially as a result of Bloomberg’s actions, in 2011, there were half as many manufacturing jobs in New York City as there were in 2001.7 How long would it take for the Greenpoint / Williamsburg Industrial Business Zone to be rezoned into the Greenpoint / Williamsburg Indie Bohemian Zone?

The thing about the IBZ is that it isn’t fixed: Bloomberg promised that he wouldn’t rezone, but who’s to say what the next Mayor will do?

But tenants like Bill’s were evidence that manufacturing could survive. In fact just last week, Bill saw a presentation from the East Williamsburg Valley Industrial Development Corporation (EWVIDCO) about “the resiliency of the manufacturing sector” that featured a case study of his tenant. But Bill wasn’t interested in his tenant’s resiliency: he wanted a new, higher-paying tenant!

Since Bill had just signed a five-year lease, this wasn’t easy. But Bill had an idea: What if he stopped caring? What if he stopped fixing things? What if instead of trying to accommodate his tenant, he made life hard for his tenant in an effort to get his tenant to leave? What if he could then point to his empty building and say that he can’t find an industrial tenant, that there’s just no demand for the space? Wouldn’t this expedite the inevitable rezoning?

So Bill stopped caring. And Bill stopped fixing. And Bill didn’t renew the lease. And Bill told the city about how hard it was to find a new tenant.

Bill wasn’t alone in his thinking. Within a few years the neighborhood would feel more decrepit, more like a ghost town, with scores of landlords holding out for their big pay day. It wasn’t long before the city successfully argued that there was no demand for manufacturing in Greenpoint and Williamsburg, and, in the name of the “free market,” rezoned the GWIBZ for mixed-use residential.

Scenario 3: New York City can decide that manufacturing matters once and for all

Loopholevilles and holdouts: if action isn’t taken, this is unfortunately the forecast for many manufacturing zones in Brooklyn that face development pressure. Of course one solution would be for the city to leave things to the “free market,” and aggressively rezone remaining zones for residential development. But manufacturing matters. The manufacturing sector is first of all a proven source of good jobs for individuals with barriers to employment in many distressed communities. According the New York State Department of Labor, the average annual wage for a manufacturing worker in New York City is around $52,000, compared to $36,500 for retail work and $25,000 for employment in food service.8 And certain manufacturers are growing, despite the city’s aggressive attempts to outzone them. For example, over the past five years, the number of food and beverage manufacturing firms has grown significantly in New York City. The sector saw growth of over 11% between 2008 and 2012, notably higher than the 7% increase for all businesses in the five boroughs, and this growth shows no sign of slowing down. (“Indeed,” the Pratt Center reports, “many companies of today in New York City are not the manufacturers of 20 or 30 years ago. Firms that are manufacturing in New York City today overwhelmingly tend to be locally owned, high-value added, and serve niche markets...from woodworkers in Green Point that serve New York City architects and builders, to apparel shops that create samples and prototypes for start-up fashion designers, to food manufacturers that supply the City’s multitude of food markets and restaurants.”9)

IBZs are inadequate for preserving and strengthening the industrial sector because they 1) don’t have legislative protection (and can therefore be easily eliminated by a future mayor), and 2) allow conflicting uses, such as big box stores, hotels, and supermarkets “as of right.” These conflicting uses are dangerous for two reasons. First, because they tend to demand more rent than industrial uses, landlords have an obvious incentive to pursue them. Second, the quasi-residential atmosphere that is produced by hotels and other non-industrial establishments empower patrons of these establishments to complain about noise, dirt, and other inevitable byproducts of industrial districts.

One way to strengthen manufacturing in Williamsburg / Greenpoint and stop the loopholeville-ization of the neighborhood would be to simply close the loopholes by revising the zoning code and explicitly prohibiting entertainment establishments, big-box retail stores, office buildings, and even hotels. Another solution put forward by City Council member Brad Lander, The New York Industrial Retention Network, and the Pratt Center is to transform IBZs into “Industrial Employment Districts.” Modeled on Chicago’s Planned Manufacturing Districts, the Industrial Employment District would be a zoning designation that would allow most of the uses in the city’s M zones, but would explicitly not allow conflicting--but presently “as of right”--uses (i.e. loopholes). As Lander describes them “they would really genuinely be manufacturing areas and not areas that often can be dominated by these other uses.”10 As a concession to the Bills of the world, both of these solutions could be supplemented with a transfer of development rights program, in which landlords in manufacturing zones can be awarded the rights to develop mixed-used and residential buildings in areas that the city has targeted for this kind of growth.

Whatever the solution, if we want to avoid the loopholelville and holdout scenarios above, action needs to be taken now. Top-down reform from City Hall is certainly needed, but the artists and other “creative class” professionals who presently live and work in Greenpoint and Williamsburg should recognize themselves as stakeholders, as well. These groups should be conscious of the effects of illegal loft living, of patronizing businesses that take advantage of loopholes and thereby contribute to an area’s deindustrialization, and of the reasons why artists are often “seen as the enemy” by the communities they move into.11 There are incredible organizations working on industrial retention policies--such as the Pratt Center, the East Williamsburg Valley Industrial Development Corporation, and the New York Industrial Retention Network--with whom we should form alliances. Creating a more equitable and open New York, with perhaps a few less biergartens, necessitates our involvement. We must demand that the city stop hedging its bets, and decide that manufacturing matters once and for all.

link - footnotes

1 “History of Brooklyn: Early 20th Century”. WNET. Accessed May 2015. http://www.thirteen.org/brooklyn/history/history4.html.

2 Harmatz, Jeffrey. “A Manufacturing Problem”. Greenpoint Gazette. November 5, 2009. Accessed May 2015. http://www.greenpointnews.com/news/1884/a-manufacturing-problem.

3 Kutner, Max. “10 Things We Learned From This 21-Year-Old Williamsburg Time Capsule”. Bedford and Bowery. July 23, 2013. Acessed May 2015. http://bedfordandbowery.com/2013/07/10-things-we-learned-from-this-21-year-old-williamsburg-time-capsule/.

4 Rosenerg, Eli. “How NYC's Decade of Rezoning Changed the City of Industry”. Curbed. January 16, 2014. Accessed May 2015. http://ny.curbed.com/archives/2014/01/16/

5 Greenpoint-Williamsburg 197a plans. Accessed May 2015. https://www1.nyc.gov/html/dcp/html/greenpointwill/greenplan1.shtml.

6 “NYC Industrial Business Zones”. NYC Economic Development Corporation. Accessed May 2015. http://www.nycedc.com/industry/industrial/nyc-industrial-business-zones.

7 “Protecting New York’s Threatened Manufacturing Space”. Pratt Center for Community Development,. August 8, 2008. http://prattcenter.net/sites/default/files/threatened_manufacturing.pdf.

8 Rosenerg. “How NYC's Decade of Rezoning Changed the City of Industry”. Curbed.

9 Crean, Sarah. “Protecting Industrial Business Zones”. Pratt Center for Community Development. March 18, 2010. Accessed May 2015. http://prattcenter.net/protecting-industrial-business-zones.

10 “DOES NYC INDUSTRIAL ZONING POLICY PRESERVE LOCAL MANUFACTURING?” WNET. Accessed May 2015. http://www.thirteen.org/uncertainindustry/uncategorized/does-nyc-industrial-zoning-policy-preserve-local-manufacturing/.

11 Powhida, William. “Redefining the Role of the Artist”. Art F City. April 4, 2014. Accessed May 2015. http://artfcity.com/2014/04/04/redefining-the-role-of-the-artist/.

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This article is part of a series on art and gentrification organized in partnership with the University of Michigan Penny W. Stamps School of Art & Design and infinite mile running from January – June 2015.
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link - issue 17: May 2015