The Battle for Gotham (35 page)

City officials, for example, are enthralled with new mall development where possible, missing the opportunity to preserve small, growing businesses or create new, much-in-demand industrial space to incubate new ones. In 2007, a large city-owned vacant industrial building provided a redevelopment opportunity for which the city sought a developer. The location was in Sunset Park, a traditionally mixed industrial and residential area in Brooklyn. One development team proposed to recycle the existing building, making it totally energy independent and giving it a modern new design. Most of the space would be retained for industry, but retail and residential would be added modestly. The developer’s primary goal was to preserve industrial space and advance a sustainable development opportunity. The proposal offered an interesting mix of uses asked for by the city. But, instead, the city chose a politically well-placed developer planning a conventional shopping mall and upscale housing mix. The idea of preserving some space for industry was dropped entirely. Fortunately, the economic collapse caused the winning developer to withdraw, and a chance exists that the first developer interested in industrial space may be the winner after all.

Moses’s power diminished and then disappeared in the late 1960s and ’70s, but the industrial erosion continues under new policy formations.

LONG ISLAND CITY ESCAPES FOR A WHILE

For reasons not apparent, most of Long Island City escaped the worst of this urban strategy for a long time, probably because the focus and interest of planners and real estate speculators were elsewhere in the city. Our factory is just south, in the shadow of the Fifty-ninth Street Bridge. North of the bridge had been totally bulldozed and replaced in the 1930s with a thirty-six-hundred-unit tower-in-the park public housing complex—twenty-six six-story buildings on six superblocks and a lot of fenced-in green grass. But south of the bridge—down to the entrance of the Queens-Manhattan Tunnel and the beginning of the Long Island Expressway—escaped major surgery. It was the strongest and densest area of the whole city’s industrial economy until recent years.

Long Island City’s escape from the worst was not through any positive action on the city’s part. In fact, commercial and residential development was heavily encouraged by the city but went nowhere fast because the market wasn’t there yet. But even at slow speed, redevelopment began a nibbling trend that has accelerated over time. In 1989 CitiCorp built a huge tower with a facade of green glass and ninety-seven million dollars in tax abatements. Several suppliers of materials like aluminum and small job shops disappeared. All sorts of ancillary service businesses—pattern makers, cabinet shops, upholsters, machine shops—were priced out and moved away. The farther they moved, the higher became our cost of doing business. The serious erosion of this industrial heartland was perhaps later than other areas but gaining momentum.

Queens West, at a onetime waterfront port and terminal site with varied industrial buildings, was begun—a massive, highly subsidized complex of high-end residential and commercial towers meant to be a whole new neighborhood, not unlike Battery Park City but surely out of place in a functioning industrial district. Five apartment buildings went up in ten years. The plan for sixteen apartment buildings with forty-four thousand apartment units and four office towers on this seventy-four-acre site gained momentum in recent years as new development raced forward all over the city.

Long Island City’s Hunters Point community was hardly a blighted outpost. A longtime industrial and manufacturing district was mixed in with a historic Italian working-class community that included small locally owned businesses. Thirty-two companies were located there, employing two thousand people doing everything from baking to servicing elevators. Some land had been vacant for years, left from the 1940s when land-banked property was held for large-scale schemes, such as a possible UN residential village, directly across the East River. The Planning Department staff member who surveyed the area in 1980 found that this was a robust mixed neighborhood with a fair amount of thriving industrial businesses. Her bosses did not want to hear it. They demanded instead that she sign a document reporting it was blighted. She resigned instead.

THE PAST IS PAST

Absolutely no one is suggesting that New York City will or could once again become an “industrial” city, but this is a simplistic way of dismissing economic realities that question current thinking. The challenge the city fails to face is allowing existing industry to survive instead of being excessively sacrificed on the altar of real estate development. The loss of industry is no more now a natural process than it was over the past fifty years.

The twenty-first century needs a new set of definitions for such things as “manufacturing,” “industry,” and “crafts.” New York has become a so-called service, not production, economy. But what is service and what is production? Is Kinko’s a service provider with its copying services or a manufacturer with its production of bound books or both? Is the stained-glass craftsman who restores deteriorating old church windows but also designs and produces new lighting fixtures a craftsman, service provider, or object producer, or all three? And what is the designer who designs for others and also produces a small inventory to sell retail on-site? Then there is Sarabeth’s Kitchen, which started twenty-nine years ago as a jam-and-jelly shop and became one of the city’s top gourmet-food brands. Two Sarabeth’s Kitchen restaurants are quite popular. The brands are sold in grocery stores, with baked goods and soups added to the mix. So is it a restaurant, wholesaler, or retailer, or all three? And what about the hairdresser who provides the usual services but also produces his own line of products, manufacturing and selling them? In what categories are these businesses classified and measured in the economy?

Likewise, one need not advocate bringing back lost industry to promote the idea that manufacturing is not only alive but actually an undervalued economic sector with new things bubbling up that could be nurtured instead of strangled. Industry can’t be brought back to what it was, but neighborhoods where new innovations might emerge could be protected and nurtured. New elements of a green economy—products to serve the new interest in green construction—are starting here in hidden ways, but may not be able to find the space in which to grow, expand, and add new work to old.

The important thing is to recognize the multiple values that existing industry has for the city and its workforce and not lose what exists because a real estate speculator has designs on a site or a district. A manufacturer today may lose a market or find a more economical way to produce overseas, but that does not mean another form of production won’t fill the unused space or employ the same skilled labor, just as Gratz Industries has over the decades. And who could anticipate production work returning to our shores because of the weak dollar, increased production costs abroad, and high shipping costs?

CREATIVE CONVERSIONS

As larger businesses leave today, the spaces once occupied by single-use tenants are sometimes being divided up for multiple smaller businesses. One of several buildings once occupied by the Eberhardt-Faber Pencil factory in Greenpoint was divided into dozens of smaller spaces for woodworkers, designers, jewelry manufacturers, printers, and artists. The forty-thousand-square-foot former Nassau Brewery in Crown Heights has been carved up into two dozen smaller spaces ranging from four hundred to four thousand square feet, and includes a mix of metalworkers, designers, video producers, and others. The former Monti Moving & Storage building, also in Crown Heights, is now home to twenty-five workspaces that include artists, woodworkers, film editors, set designers, and architects.

Also significant is the proliferation of food-preparation businesses occupying old factories. This is especially true of ethnic specialty foods, the fastest-expanding segment of the growing New York food industry that includes everything from a variety of breads to chocolate and beer (again). The problem comes as these small companies succeed and grow and need larger spaces, the kind the city is losing rapidly. Many will be forced out of the city. At the same time, Friedman notes, not enough big spaces are being divided into small spaces, as O’Connell and Sweeney have done, as we will see. Start-ups need rental spaces under ten thousand square feet. A space mismatch exists. The supply is the bigger older buildings for single-use tenants, and the demand is for small and medium-sized properties. This seeming contradiction becomes understandable when one observes that the big ones frequently are converted to high-end condos, not new industrial space.

TRUE ECONOMIC DEVELOPMENT IS A RENEWABLE PROCESS

Many familiar corporate giants—Kodak, General Motors, Apple Computers, Macy’s—were started by a single innovative entrepreneur. Starting in a small, limited way, each one expanded, shifted its product mix, and evolved into a corporate giant. That process is not anachronistic. It repeats itself regularly when not stifled by city policies. This is the DNA of economics. Some famous companies didn’t start out making what they became known for, as Catherine Rampell pointed out in her article mentioned earlier about companies reinventing themselves. Nokia made paper before cell phones. Toyota made looms before cars. Some auto-parts manufacturers today have reinvented themselves into windmill turbine producers. For city planners to continue to plan and rezone as if industry can’t survive, grow, and be a significant contributor to the city economy is dramatically shortsighted. The rezoning of almost every industrial district in the city reflects that shortsightedness.

Ironically, one city agency is actually proving the wrongheadedness of the official no-confidence vote in industry. The Brooklyn Navy Yard with more than forty buildings, four million square feet of industrial space, 230 tenants, and five thousand employees has a never-ending waiting list for production businesses wishing to get in. It can’t build new buildings fast enough to fill demand. Only one business, so far, has folded during the economic collapse, and another was right there to fill the space. Current tenants keep growing and want more space. Demand grows while available space citywide keeps shrinking.

The entrepreneurial processes from which new businesses emerge and grow have a timeless legitimacy and repeat themselves if conditions exist to allow the process to continue. The repetition of the process often looks somewhat different over time, but the repetition of a natural process remains nonetheless.
Real estate development doesn’t create economic growth; it follows it.

Again we return to Jacobs’s point that economic growth comes when new work is added to old and imports are replaced with local production. One of the most important and oft-cited examples she presented to demonstrate new work created by import replacement was the Japanese bicycle industry, which, when her book was published, was a world leader. She wrote: “Innovations are the most important kind of goods and services added to older work. But for every true innovator, there are many, many imitators. Innovations make up only a fraction of the many individual instances in which new goods and services are added logically to older work. Imitation is a shortcut. It seldom requires as much trial and error as innovations do. The repairing of things is often the older work to which the newer work of making the same things is added.”
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In late-nineteenth-century Japan, Jacobs observed, the Japanese economy was in the doldrums. The import of Western goods was preeminent, including bicycles, a popular means of transportation. A conventional response by government to this evolving business would be to invite a Western manufacturer to set up shop, as has been done in many places with car companies. Alternatively, the government arranges for the establishment of a manufacturing business, copying Western models and importing Western machinery and professionals to operate the new facility.

Instead, Jacobs observed, the Japanese production of new bicycles grew out of the extensive network of one- and two-man repair shops that sprang up to service the growing demand. Instead of importing expensive parts or cannibalizing valuable existing bikes, the “repairmen” learned to manufacture replacement parts, thus becoming light manufacturers. New entrepreneurs became the “assemblers,” in effect producing their own line of bicycles. “The Japanese had acquired a pattern for many of their other achievements in industrialization: a system of breaking complex manufacturing work into relatively simple fragments, in autonomous shops,” Jacobs wrote. “Parts making has become a standard foothold for adding new work.” In fact, Sony too, she noted, began at the end of World War II “as a small-parts shop in Tokyo, making tubes on contract for radio assemblers, and was built up by adding to this the manufacturing of whole radios . . . and other types of communication and electronic goods.”

Ford Motor Company had a similar beginning, Jacobs pointed out. Henry Ford failed twice to set up complete car-manufacturing operations but succeeded the third time by buying “from various suppliers in Detroit every single item he needed for his cars—wheels, bodies, cushions, everything.” Ford evolved into a manufacturer from there. Philco, Motorola, Lockheed, Grumman, and others followed similar patterns. Today, parallel success stories are all over the place, including Apple, Google, and Microsoft, all garage start-ups.

Ironically, a variation of this very process can be observed today in, of all industries, bicycle manufacturing. Portland, Oregon, often hailed for its early farsighted public transit policies, built an ever-expanding light rail network, increased densities, and rolled back its greenhouse emissions. It was also early in planning and developing bike lanes. This was in the 1970s when the focus of that city’s transportation planning shifted from accommodating the automobile to promoting the revival of mass transit. Today 3-5 percent of Portlanders commute by bike, the highest percentage in the country, according to the Census Bureau.
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The increasing popularity of biking caused an increase in sales of national brand bicycles produced elsewhere by large corporations.