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Industry City Failed To Lure Amazon, But Is A Billion-Dollar Sunset Park Rezoning Inevitable?

Dashed Arrow New York Underworld / Flickr

Long before Amazon backpedaled on plans to plant a second headquarters in Queens, another rising real estate player hoped to land the trillion dollar corporation on its home turf.

It was September 2017 and Andrew Kimball had a pitch: Amazon should come to the Brooklyn neighborhood of Sunset Park.

Kimball, the CEO of Industry City, and Marvin Schein, the managing partner of neighboring Liberty View Plaza, argued to city officials that Amazon belonged on the Brooklyn waterfront, where “technology, media, design, art, fashion, manufacturing and craft-making collide across an amenity rich urban campus, creating new opportunities for today’s innovations to cross-pollinate and collaborate across sectors,” according to documents shared with Gothamist.

Industry City’s general bid for Amazon has been public knowledge, but not the scope or detail. Kimball and Schein proposed handing over 5 million of their properties’ 7.5 million square feet to an Amazon campus. Effectively, this would have transformed Industry City into Amazon City.

In their Amazon pitch, Industry City talked up benefits like proximity to a ferry stop and express subway lines, as well as eligibility for START-UP NY, a tax subsidy program for new businesses.

Had Amazon selected the sprawling, privately-owned industrial complex that City Hall and real estate interests hope to convert into a retail, hotel, and tech destination, history might have been different.

The document, obtained via a Freedom of Information Law request and published in full below, also reveals what Industry City, publicly at least, did not want to link with Amazon: a controversial rezoning that would change the scope of the property, creating 1.3 million square feet of new commercial and industrial space by allowing its owner to erect several new buildings that will also house hotels, retail spaces, an academic campus, and parking. Kimball and Schein touted the rezoning as a way to “expand and accelerate the vibrant Innovation Economy ecosystem that exists today” and add new density.

The rezoning, a part of $1 billion overhaul supported by the de Blasio administration, was set to go through the uniform land use review process before the local councilmember, Carlos Menchaca, demanded a six-month delay in March. Menchaca, a Democrat, bowed to furious community opposition, threatening to kill the rezoning altogether if Industry City moved forward.

Industry City begrudgingly agreed to the extension.

In a letter to Kimball, Menchaca wrote that a typical land use review process “is insufficient for evaluating displacement, gentrification, and the effects of climate change.” Menchaca and Community Board 7, which represents Sunset Park, intended to use the six months to study the rezoning further, solicit additional community input, and await a study from academics at NYU Langone Hospital-Brooklyn, Wagner College, and Hunter College.

The details of Kimball’s pitch to Amazon are only likely to anger local activists and rezoning opponents further. For them, Industry City’s stated desire to transform their property into a full-scale Amazon campus underscores their true intentions: accelerate gentrification in the largely Hispanic and Asian Sunset Park, a traditionally working class neighborhood.

“It was pretty heart-breaking,” said Marcela Mitaynes, a Sunset Park tenant organizer with the group Neighbors Helping Neighbors. “We all knew and were very fearful when Amazon showed an interest in New York City because there aren’t many places people can build.”

“Even without Amazon, we are already going through a lot of changes,” Mitaynes added. “There has to be a change in the way we do business. We are not against development or developers but it isn’t fair—you shouldn’t be able to make money off the displacement of my community.”

Developers Jamestown and Belvedere Capital acquired Industry City in 2013, and initial redevelopment there has fueled real estate speculation and substantial rent increases in Sunset Park. Angelo Gordon & Co., another investor in the partnership, is a hedge fund that has profited off the fiscal crisis in Puerto Rico, the homeland of many longtime Spanish-speaking Sunset Park residents.

Industry City’s argument for a rezoning is rather straightforward: we generate beneficial economic activity and we can create high-paying jobs for locals. The rezoning promises to add 15,000 jobs.

“Today, more than 500 businesses employ more than 7,500 people, many of whom are long-time residents of Sunset Park. In fact, more Sunset Park residents who work in the neighborhood work at IC [Industry City], and some 700 area residents have either landed a full time job or internship at an IC business through its on-site employment and business support center,” said Lee Silberstein, an Industry City spokesperson, in an email. “The mix of businesses is remarkable—including traditional manufacturers which occupy over 1 million square feet of space—more than at any time in the past several decades.”

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Councilmember Carlos Menchaca in his district (William Alatriste / City Council)

For much of its history, Sunset Park’s waterfront was home to heavy manufacturing and shipping. Real estate developers never coveted the stretch. Immortalized in Hubert Selby Jr.’s brutal, best-selling novel Last Exit to Brooklyn, the waterfront was a hub for sailors, longshoremen, and ironworkers.

In the second half of the 20th century, many manufacturers fled New York, lured overseas by cheaper labor costs. At the same time, city policy makers sought to fuel real estate speculation and raise land values by rezoning waterfront property, further incentivizing manufacturers to decamp elsewhere. After the 1970s fiscal crisis, City Hall was desperate to court new investment—for developers, rezoned land held the promise of future profits.

Industrial manufacturers offered physically demanding, unionized jobs that paid sustainable wages. Unlike real estate developers, manufacturers had little interest in raising land values because they required their blue collar workforce to afford to live nearby. Speculators had no use for unsightly factory buildings and factory owners, once in possession of land, saw little reason to agitate for increased value if they planned to remain long-term.

Real estate, not manufacturing, now drives policymaking in New York. Mayor Bill de Blasio, a Democrat who enjoys a close relationship with the real estate industry, has voiced support for the Industry City rezoning, telling reporters recently he must ensure “there are jobs for working people in communities.”

“I understand why people are concerned about development and I understand there’s concerns about gentrification, and those are honest and those are real,” de Blasio said. “But the irony to me is that this particular initiative was aimed at creating jobs for working people from the community and from surrounding communities, which I think are part of what allow people to stay in their community.”

Opponents of the rezoning are offering an alternative vision: a return to full-scale manufacturing, especially green jobs. UPROSE, a community-based organization, has been advocating for Industry City to become a home for the assembly of wind turbines and solar panels, hiring Collective for Community, Culture, and Environment—a consulting firm of Pratt Institute researchers—to explore how Industry City can be repurposed for a sustainable future. (Though at least one manufacturing company struggled to survive there: in 2016, MakerBot, a 3D printing company, laid off many of its factory workers at their Industry City location and moved most of its operations to China.)

For community groups, the hope is that such jobs will pay both a sustainable wage and slow the gentrification already underway in a neighborhood that borders the affluent—and long ago gentrified—Park Slope.

Silberstein, the Industry City spokesperson, acknowledged the interest in maintaining and expanding manufacturing at the site, though did not confirm this would be a priority for Industry City.

What comes next isn’t immediately clear. Under pressure from local organizers, Menchaca, a self-identified progressive Democrat who has tangled with the city before, is unlikely to support a rezoning that gives Industry City most of what it wants. Any type of support, ultimately, may be perceived as selling out.

“This is what we have clearly been pushing for and saying: no rezoning, no conditions, no accommodations,” said Jeremy Kaplan, a Sunset Park activist and documentary filmmaker. “There’s pretty much nothing in a community benefits agreement that Industry City could offer that would offset the enormously negative impact the rezoning will have in all facets of the community from the industrial waterfront to small businesses.”

Fellow colleagues have faced similar dilemmas. Manhattan Councilmember Ydanis Rodriguez supported a City Hall-backed rezoning of Inwood last year, drawing the wrath of activists and tenant groups.

“We must not forget what the situation is. A single well-resourced private actor has asked its neighbors for a favor in changing the zoning laws that govern its property," Councilmember Menchaca told Gothamist in a statement.

"Industry City has argued that its fellow neighbors should do this huge favor for them because it will boost the economy and grow jobs. An important consideration, but only one of many," Menchaca continued. "Will it also displace local residents in the process? Will it accelerate gentrification? Will it ensure the waterfront is able to confront the challenges of climate change? These and other questions matter a lot when you consider Industry City’s footprint is larger than the World Trade Center and Hudson Yards."

Industry City’s proposal could be even more consequential. If the rezoning ultimately goes through the City Council and Industry City evolves into the premier retail and tech hub that the city and its property owners want it to be, displacement of working class and low income residents is inevitable, said Tom Angotti, professor emeritus at Hunter College’s Urban Policy and Planning and the CUNY Graduate Center.

“If you start putting in hotels and high value industries, it will create a demand for housing,” Angotti said. “The Industry City proposal doesn’t really address that, and the city doesn’t have an answer to concerns about resident displacement.”

“It will start pushing out tenants,” he added. “That’s pretty obvious.”

Industry City's Pitch For Amazon HQ2 by Christopher Robbins on Scribd

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