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Brooklyn is the symbolic capital of New York City’s maker movement comprised of artisans and artists, designers, craftsmen, builders, innovators, and inventors. The adaptive reuse of the borough’s extensive industrial waterfront is integral to an innovation economy that derives social and economic value from place-based global branding. A 2015 “Make it in Brooklyn Innovation Summit” gathered commercial real estate giants such as Bruce Ratner and Jed Walentas for a day-long conference, which included a discussion of the borough’s next frontier neighborhood. This prompted a Politico reporter to title her article, “Get Ready Sunset Park, ‘Brooklyn’ is Coming”.

The urban entrepreneurialism embodied by the maker movement extends to commercial real estate. As noted by the Commercial Observer (an online news journal serving the industry’s “most powerful players”):

This marriage of underutilized Brooklyn warehouses and technology companies is particularly well-suited. Many of these cavernous spaces are raw, making them easily adaptable to accommodate exponential growth. The space is authentically (and fashionably) industrial and the stock sits on waterways or rail lines once used to transport the goods manufactured within their walls, making them easily accessible.

Along the waterfront of Brooklyn’s Sunset Park neighborhood, a massive privately-owned complex known as Industry City – comprised of 16 factory loft buildings of 6-12 stories with 6.5 million square feet of floor space – is being positioned as one of the nation’s largest innovation hubs. The Brookings Institution has produced numerous studies on the types of industry sectors that make up an innovation economy and its spatial geography, which favors the clustering of advanced manufacturing, research and development, and engineering and design firms in an urban, mixed-use office and retail campus-like environment. The investors behind Industry City’s vision for its innovation economy ecosystem are centered on art and design, film and TV, retail, fashion, technology, and specialty food sectors.

Source: 2016 Connecticut Brownfields Conference. Industry City CEO Andrew Kimball’s Keynote PowerPoint

This essay describes the financialization of Industry City and the surrounding industrial waterfront, with a focus on Industry City CEO Andrew Kimball’s rationale for a rezoning to permit non-manufacturing uses such as hotels, academic facilities, and expanded retail. While Kimball claims a rezoning is necessary to advance the development of an innovation ecosystem, the development strategy to repurpose and reposition industrial properties is driven by the real estate imperatives of creating and maximizing income-producing assets rather than protecting and promoting small manufacturing businesses and their workers.


While Industry City is privately-owned, the city owns and operates a comparable 6 plus million square feet of industrial space in Sunset Park’s South Brooklyn Marine Terminal, Bush Terminal, Brooklyn Army Terminal, and Brooklyn Wholesale Meat Market. These NYC Economic Development Corporation (EDC)-managed sites have hosted several of Mayor de Blasio’s announcements of key initiatives to address economic inequality and promote the creation of high-paying jobs. Most recently, the Mayor announced a $136 million investment to upgrade two existing Bush Terminal buildings and establish a Made in NY campus for garment manufacturing and film production. This investment is part of the Mayor’s ambitious New York Works plan to create 100,000 jobs including 20,000 industrial jobs.

Source: “Brooklyn’s Sunset Park is Hefty Bet for Developers,” Wall Street Journal, July 27, 2014

As one of the city’s few remaining industrial, working waterfront neighborhoods, Sunset Park’s diverse working class, immigrant populations and extensive manufacturing infrastructure provide a potent backdrop for policy proposals promoting inclusive economic development. However, the redevelopment and rebranding of privately-owned Industry City and neighboring Liberty View Industrial Plaza have catalyzed a stunning and unprecedented increase in the volume and value of commercial real estate sales such as the Brooklyn Whale Building, which sold in 2015 for $82.5 million.

Major property owners and investors (including the city of New York) propose to modernize Sunset Park’s industrial buildings in order to secure a future for urban manufacturing based on an ecosystem of technology, advertising, media, and information (TAMI) tenants, designers, and prototype “makers”. However, heightened concerns about industrial gentrification and displacement prompted long-time Bush Terminal tenants to post a sign reading “Please Keep Small Manufacturing at Bush Terminal”, imploring the Mayor to protect Sunset Park’s small garment and furniture manufacturers.

Photo by Bush Terminal tenant Glaucio Silva of 13 42nd Street.

In advance of the Mayor’s May 2017 visit to Bush Terminal to announce his Made in NY initiative, NYC EDC requested the tenants remove the sign. In return, NYC EDC promised to relocate Bush Terminal tenants after renovations are completed. While the sign remains down, tenants are still concerned they will not be able to afford future rents at Bush Terminal.


In 1964, hotelier Harry B. Helmsley purchased 35 acres of the original 200-acre Bush Terminal, the country’s largest inter-modal, industrial park, which was completed in the early 1920s and, at its height, employed more than 25,000 workers in manufacturing and maritime related sectors. Twenty-two years later, Helmsley sold his multi-building industrial complex to Industry City Associates – an investment group comprised of real estate giants including Rubin Schron (Cammeby’s International) and Abraham Fruchtlander (FBE Limited), who are also co-owners of the iconic Woolworth Building. In addition to accumulating an extensive residential and commercial real estate portfolio, Cammeby’s International has ventured into ground-up development and is currently completing a controversial, mixed-use luxury retail and residential project that replaces the Trump Village Shopping Center in Brooklyn’s Coney Island.

In 1986, when Industry City Associates purchased the massive complex located between 32nd and 41st Streets adjacent to the Upper New York Bay, 70% of Industry City was leased and occupied by manufacturers. Industry City represented the largest concentration of apparel production outside of Manhattan with a third of the total industrial space – approximately two million square feet – occupied by garment firms. Over time, manufacturers left Industry City - as they did across the U.S. – due to global competition, trade policies, and offshore production. As tenants went out of business or relocated in search of even lower rents, Cammeby’s International and FBE Limited neglected to maintain their industrial buildings. This disinvestment was evidenced by uncollected trash, broken windows, malfunctioning elevators, and leaky roofs that flooded hallways.

The fate of Brooklyn’s neglected and disinvested industrial waterfront was forever changed by former Mayor Bloomberg’s property-led redevelopment strategy to make New York City more livable (for the affluent) by capitalizing on long neglected properties with “priceless” waterfront views. The 2005 rezoning of Greenpoint/Williamsburg has become a textbook example of city actions that facilitated transformative gentrification and the near total displacement of the neighborhood’s Latino residents. Without any capital investment, neighboring Brooklyn waterfront property values rose and in 2007, Industry City’s appraisal at $570 million enabled Cammeby’s International and FBE Limited to borrow loans amounting to $300 million. These loans were then converted into commercial mortgage backed securities (CMBS) that were securitized by Goldman Sachs and Citigroup; in other words, the Industry City-backed loans were repackaged as bonds and sold to investors.

In short order, the 2008 subprime mortgage crisis catalyzed a deep global recession. Bruce Federman, former director of real estate at Industry City, said Cammeby’s International and FBE Limited had to make loan payments out-of-pocket because major tenants declared bankruptcy as a result of the financial crisis. From January to June 2010, the debt service on the loan was about $9.6 million, while the property’s net operating income was $5.8 million. By January 2011, Cammeby’s International and FBE Limited defaulted on the $300 million loan. The loan was then transferred to LNR Partners, LLC, self-described as “the world’s largest commercial mortgage special servicer.” By 2012, Industry City’s appraised value had fallen to $136 million.

Even though Cammeby’s International and FBE Limited were overleveraged, they managed to hold on to Industry City and restructured the $300 million debt into two loans -- a $190 million A note and a $110 million B note -- with a reduced interest rate from 6.28% to 4.68% through April 2013. Part of the loan restructuring terms required Cammeby’s International and FBE Limited to invest $30 million in deferred maintenance, such as repaving the streets, upgrading the buildings, modernizing elevators and other infrastructure. Months later, Superstorm Sandy devastated New York City’s waterfront communities and the damage to several of Industry City’s buildings was estimated at $50 million. As the Commercial Observer noted, “Hurricane Sandy almost literally put the property underwater.” This setback led to Cammeby’s International and FBE Limited’s search for new financial partners.


In August 2013, Jamestown Properties and their real estate investor partners, Belvedere Capital and Angelo, Gordon & Co., entered a joint venture agreement with the owners of Industry City and assumed the $300 million debt for their 49.9% ownership share. Jamestown Properties hired Andrew Kimball from the Brooklyn Navy Yard – a city-owned industrial park a few miles north – to serve as Industry City’s CEO and lead the repositioning of this underperforming asset.

Jamestown Properties specializes in repurposing industrial buildings for innovation economy tenants. Their extensive international portfolio includes Chelsea Market and the Milk Studios Building in Manhattan, the Falchi Building in Long Island City, Queens and the Innovation and Design Building in Boston’s Seaport Innovation District. An article titled “Gentrification Inc." describes how Jamestown Properties has perfected the blueprint for gentrifying historic industrial neighborhoods, as exemplified by Chelsea Market and the Falchi Building. Industry City’s new consortium of investor-owners made a $100 million investment in deferred maintenance, such as elevators and replacement windows, which led to the leasing of 850,000 square feet of space to tenants including Li Lac Chocolates, Shyp (an on demand shipping service), event producer David Stark Design, and architecture firm Studio ai.

In addition to Kimball’s leadership, Jamestown hired numerous lobbyists, including MirRam Group LLC, Yoswein NY, and the Marino Organization, to help rebrand Industry City. One strategy was placing puff pieces promoting the maker movement as modern manufacturing, including one titled, “Industry City: An Industrial Revolution For The 21st Century In Brooklyn.” Kimball is a frequent real estate conference panelist touting how creative producers, makers, techies and niche retailers are driving the borough’s renaissance. Most recently, he advised commercial real estate developers at the May 2017 Brownstoner Real Estate Conference to take advantage of the borough’s extensive industrial properties to develop “cool spaces” preferred by Brooklyn office tenants.

Andrew Kimball speaks at Brownstoner conference, “Brooklyn Boom Nowhere Close to Ending, Experts at Brownstoner Real Estate Conference Predicts,” May 4, 2017.

In March 2015, Jamestown Properties and their joint venture partners announced an “eye popping” $1 billion dollar investment to transform Industry City into an innovation ecosystem. The investment is contingent on a city rezoning to permit non-manufacturing uses such as a hospitality center with two hotels and meeting space, university-based academic facilities, and expanded retail. Kimball noted that since 2013, when Jamestown Properties and investor partners acquired an ownership share, their efforts to attract new tenants had only reduced Industry City’s underutilized space by 9% so that 56% (2.9 million sq. ft.) remained either vacant (27%) or used for warehousing and storage (28%). Without regulatory land use changes, Kimball argued it would take 25 or more years to “fully invest in the portfolio”, i.e., securing the highest rent returns. Without a rezoning, the primary use at Industry City would remain warehousing and storage while innovation economy tenants would be a secondary use for decades. Subsequently, Kimball argued only 7,000 (5,900 direct on-site) jobs would be created in contrast to 20,000 (13,300 direct on-site) jobs if a rezoning is granted. To expedite the “highest and best use” at Industry City, Kimball proposed a “special innovation district” that would expand retail and permit the new construction of two academic buildings and two hotels in order to “create an economically self-sustaining innovation ecosystem portfolio,"

Source: 2016 Connecticut Brownfields Conference. Industry City CEO Andrew Kimball’s Keynote PowerPoint


In the meantime, Jamestown Properties needed a fast infusion of capital to keep Industry City afloat. Under Andrew Kimball’s leadership at the city-owned Brooklyn Navy Yard, the complex was able to leverage $250 million in public funds for $750 million in private investment that included transnational capital. The Brooklyn Navy Yard was New York City’s first project to receive EB-5 investments, one of five employment-based categories established by the 1990 Immigration Act to offer permanent residency to professionals, investors, and priority workers.

EB-5, also known as the Immigrant Investor Program, seeks to stimulate economic development and job creation through foreign investments in exchange for visas. Loans of $1 million or $500,000 in a targeted employment area (defined by high unemployment) for projects that create at least 10 jobs will secure US permanent residency and eventual citizenship for the investor and their immediate family members. This controversial program was largely underutilized until the 2008 financial crisis when commercial real estate developers began to heavily tap EB-5 as a source of cheap financing. In fact, one developer described the EB-5 program as “legalized crack cocaine” for the real estate industry.

After flying to China to personally promote his Brooklyn Navy Yards project, Kimball secured $60 million dollars through the EB-5 program, which he described as a “gift from the gods.” Chinese transnational capital (this time in the form of a bank loan) similarly provided a lifeline for Industry City. A few months after announcing their $1 billion investment, Jamestown Properties recapitalized their outstanding debt with a massive $403 million loan from the Bank of China (as the senior lender) and SL Green Realty, a major Real Estate Investment Trust, financing a mezzanine loan. At the December 2015 closing, Jamestown received $220 million with the remaining $183 million to be distributed over time as Industry City is renovated and leasing goals are met.


In his 2017 State of the City speech, Mayor de Blasio shared his personal connection to New York City’s quintessential manufacturing niche – apparel production. De Blasio described how his grandmother’s shop did not represent the fashion industry of “glamour and runways” but one of hard work. This would also be an apt description of Sunset Park’s garment industry.

As late as the year 2000, apparel manufacturing was still a relatively large employer in the neighborhood. Nine thousand plus workers representing more than a quarter of the local workforce were employed in manufacturing sectors with a majority (52%) in apparel production. Sunset Park’s garment industry is now much diminished, with only a hundred or so firms employing about 1,100 workers. Sunset Park’s manufacturing businesses were able to hang on, in large part, because of the low rents in the neighborhood’s industrial zones at the waterfront and near the N subway 8th Avenue station.

Last summer, I led a group of CUNY faculty on a tour of Sunset Park’s garment industry near the neighborhood’s dense 8th Avenue commercial corridor. We saw numerous Chinese-owned garment factories, including the one in the photograph below with an advertisement to hire a tailor and four sewing machine operators including two operators of double needle machines that set collars and cuffs. Operating this type of machine requires a higher level of skill. Despite a clustering of garment factories still abuzz with workers, these firms and their immigrant workforce have largely been left out of the city’s manufacturing policy discussions.

Photo by Cathy Chu of a Sunset Park garment factory, August 2016

At last year’s well-attended Brooklyn Waterfront Research Center conference on “The Past, Present and Possible Future of Manufacturing Along the Brooklyn Waterfront,” expert panelists repeatedly stated that affordable space is essential for industrial manufacturers, underscoring that these businesses simply cannot pay the same rents as commercial tenants.

Firms like Jamestown Properties’ ability to raise capital from financial markets, however, is contingent on securing the highest rent tenants such as office, hotels, and luxury retail. Rents at Industry City are steadily increasing. In 2012, the asking rent for industrial space was $8 per square foot. By 2015, rents more than doubled and ranged from the mid-teens to the mid-$20s per square foot, which may be affordable compared to DUMBO and Manhattan rents for TAMI tenants but is certainly unrealistic for small manufacturing firms. Under these conditions, industrial manufacturing is highly unlikely to be the primary use for places like Industry City.


Even with extensive public support, countering the real estate imperatives of an innovation economy may be a losing proposition for urban manufacturers. Located one block north of Industry City, Federal Building #2 was sold by NYC EDC to Salmar Properties in May 2011 for a mere $9.1 million dollars, which works out to $8.27 per square foot. Built in 1916 as a warehouse for the Department of the Navy and vacant since 2000, Federal Building #2 offers 1.1 million square feet in an 8-story building. The below-market sales price came with a 30 year deed restriction that limited 85% of the building to light industrial manufacturing. Moreover, the New York City Industrial Development Agency provided $37 million dollars in sales and real estate tax exemptions to help facilitate the development of a “state of the art industrial center.” Salmar Properties renamed the building Liberty View Industrial Plaza, and in media accounts of the purchase, co-owner Marvin Schein enthusiastically endorsed the return of industrial manufacturing to Sunset Park.

Fashion designer and founder of Manufacture New York Bob Bland had a plan to reinvent the city’s garment manufacturing sector by promoting a high value added and socially conscious fashion industry that is based on local sourcing, local labor, and local consumption. In 2014, Deputy Mayor Alicia Glen announced that Manufacture New York was selected to operate and manage a 160,000 square feet incubator that would accommodate 20-30 businesses creating 300 jobs. The NYC EDC committed $3.5 million dollars to modernize space at the Liberty View Industrial Plaza for a Manufacturing Innovation Hub for Apparel, Textiles, + Wearable Tech. Manufacture New York envisioned an on-site fashion ecosystem with designated space for garment production, an incubator to support new designers, and a research and development lab. Last summer, Senator Kristen Gillibrand visited Manufacture New York to announce her bipartisan Made in America Manufacturing Communities Act to designate localities such as Sunset Park “manufacturing communities” eligible for $1.3 billion in federal economic development funding to support manufacturing businesses.

Brooklyn Reporter, “Pushing the Made in America Manufacturing Act in Sunset”, August 11, 2016

Despite three years of working with NYC EDC and Salmar Properties, Manufacture New York can no longer afford to rent at Liberty View Industrial Plaza, and left in October 2016. The imperatives of real estate finance and development, and the city’s lack of transparency and oversight, doomed Bob Bland’s vision for a garment manufacturing innovation hub. The simplest explanation for the demise of this initiative is the lack of public and private sector commitment to provide affordable space for manufacturing. Bland shared that a hard lesson from her experience is that dedicated affordable manufacturing space is only feasible as a non-profit endeavor due to the “sociopathic” expectations of private landlords and NYC EDC in terms of economic returns.

Even with Liberty View Industrial Plaza’s deed restriction, Salmar Properties’ asking rents ranged from the high $20s to low $30s per square foot. With the exception of a few manufacturers (such as Koppers Specialty Chocolates), their tenants were major corporate retailers including Amazon, Saks Fifth Avenue, and Bed Bath and Beyond. According to Bland’s original lease, her rent was set at $12 dollars per square foot but Salmar Properties wanted $25. NYC EDC’s lack of oversight and enforcement of the deed restriction allowed Salmar Properties to broadly define light manufacturing to include a private law firm and a tech firm because they were “making” software. Throughout her tenancy at Liberty View Industrial Plaza, NYC EDC told Bland that she couldn’t say anything and had to continue working with Salmar Properties who eventually forced Manufacture New York out of their space. Reflecting upon her ordeal, Bland stated that NYC EDC used Manufacture New York for marketing the concept of an inclusive and sustainable fashion industry, but ultimately the city was not committed to making affordable manufacturing space possible.


Andrew Kimball has often noted that during his tenure as the Brooklyn Navy Yard CEO, “the government wrote me a $250 million dollar check to deal with the deferred maintenance” but “(T)hat isn’t happening here” in Industry City. But in fact, the city and state provides millions of dollars to support commercial real estate through below-market sales prices (as in the case of Liberty View Industrial Plaza), infrastructure investments such as a fiber optic broadband network for high speed internet access and ferry service, and numerous subsidy and property tax exemption programs including the Industrial and Commercial Abatement Program and Relocation and Employment Assistance Program. Deputy Mayor Alicia Glen noted, “If we were not doing all this other stuff, [Industry City] wouldn’t be as successful as they’re going to be.”

Another example of the city’s complicity in advancing the real estate imperatives of an innovation economy is Mayor de Blasio’s endorsement of a developer-initiated proposal for a streetcar dubbed the Brooklyn-Queens Connector (BQX) that will travel a 16-mile “scenic” route along the East River linking Sunset Park, Brooklyn to Astoria, Queens. The financing scheme for this $2.5 billion project is premised on “capturing” the increased property taxes of the real estate along the BQX route. In other words, the city is counting on the gentrification of waterfront neighborhoods to pay for a transportation project that clearly serves the interests of innovation economy developers including Jed Walentas and Andrew Kimball.

With 6.5 million square feet spread out across nearly 7 city blocks and a rezoning proposal to add several hundred thousand square feet of luxury retail, hotels, office, and academic space, Industry City is a behemoth driving the wholesale obliteration and remaking of Sunset Park’s working class community of color. The imperative of an innovation economy, as advanced by commercial real estate financiers and developers, is to appropriate and repurpose industrial buildings to accommodate commercial tenants who can pay premium rents. The ripple effect on Sunset Park’s industrial real estate—including the city’s extensive portfolio—does not bode well for local manufacturing businesses. Despite his numerous visits to announce public investments in industrial infrastructure and job creation, Mayor de Blasio’s policies may be deepening the occupational and residential segregation of Sunset Park’s working class Chinese and Latino residents.


Tarry Hum is a Professor of Urban Studies at Queens College and Graduate Center, CUNY. Her first book, “Making a Global Immigrant Neighborhood: Brooklyn’s Sunset Park,” received an Honorable Mention for the Association of Collegiate Schools of Planning’s Paul Davidoff Book Award in 2015. She is currently working on a second book, “The Asian Century”: Chinese Transnational Capital and City Building in Immigrant New York,” and a forthcoming Temple University Press edited volume,Immigrant Crossroads: Globalization, Incorporation, and Placemaking in Queens, NY.



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