January 19, 2005Creates New Office to Oversee Manufacturing Sector; Establishes Industrial Business Zones
Mayor Michael R. Bloomberg today announced the creation of the Mayor’s Office of Industrial and Manufacturing Businesses to support New York City’s industrial sector, and appointed Carl Hum, formerly the Chief of Staff and Special Counsel at the Department of Small Business Services, to direct the new Office. The Office will manage the creation of new Industrial Business Zones (IBZs), in addition to carrying out a number of initiatives to assist the manufacturing sector such as relocation tax credits, enhanced sanitation services and employee training programs. The City will invest about $17 million through 2009, and the proposed tax incentives are projected to cost the City about $9 million over the same time period if approved by the State Legislature. Council Members James Sanders Jr. and Erik Martin Dilan, Deputy Mayor for Economic Development & Rebuilding Daniel Doctoroff, Economic Development Corporation (EDC) President Andrew Alper, Small Business Services (SBS) Commissioner Robert Walsh, City Planning (DCP) Commissioner Amanda Burden, Brooklyn Navy Yard Development Corporation President & CEO Eric Deutsch and NY Industrial Retention Network Director Adam Friedman attended the announcement made at Arc Metal Group, which is receiving City benefits to expand in a future IBZ in East New York.
“Today, we are launching a comprehensive industrial policy that involves designing new business zones and creating new incentives to encourage long-term investment in manufacturing, warehousing and other industrial businesses throughout the five boroughs,” said Mayor Bloomberg. “As I said in the State of the City, we are committed to diversifying our economy in order to create opportunity and jobs for all New Yorkers. Over the past half century, the City’s industrial base has declined, along with many other American cities, but the industry remains a powerful engine of our economy and its 500,000 jobs represent about 15% of our workforce. We believe that our new industrial initiatives will stem this tide and grow our manufacturing sector. I want to thank all the Industrial Task Force members for arriving at a policy that will strengthen New York City’s industrial core, help businesses to grow and increase jobs.”
As part of the new citywide industrial policy, the City will designate specific boundaries for IBZs, which will replace outdated In-Place Industrial Parks, based on existing land uses, the industrial character of the neighborhood, traffic patterns and Empire Zone boundaries. The Mayor also announced that the Administration is committed to not rezone IBZs for residential use. To date, the City has identified the following neighborhoods for IBZs: Bathgate, East New York, Eastchester, Flatlands, Hunts Point, Jamaica, JFK Industrial Corridor, Long Island City, North Brooklyn, Port Morris, Southwest Brooklyn including Sunset Park and parts of adjacent industrial areas in Red Hook and Gowanus, Steinway, West Maspeth and Zerega.
“By making an ironclad commitment to maintain manufacturing zoning in key industrial areas and not permit residential use, we are responding directly to the concerns of many business owners who have articulated the need to make the City’s zoning policies in industrial areas more predictable,” said City Planning Commissioner Burden. “I am pleased that as part of an interagency effort, we will plan comprehensively for these key industrial areas to make them stronger and more competitive.”
The City is also working to create a one-time tax credit for industrial companies relocating within New York City to an IBZ or to the Brooklyn Navy Yard. This credit is geared toward industrial companies that cannot expand at their current locations and will cover eligible relocation expenses up to a maximum of $1,000 for each industrial job relocated. Outside IBZs, the City will support industrial businesses in certain mixed-use neighborhoods through the new Industrial Ombudsman Program. Ombudsmen will develop relationships with businesses to understand, identify and respond to area problems, serve as the first point of contact for local issues, provide direct access to assistance programs offered by City agencies, and help resolve maintenance or regulatory issues. Initially, Ombudsmen will be designated for Manhattan’s Garment Center, parts of Greenpoint/Williamsburg, sections of Red Hook and Gowanus near the Southwest Brooklyn IBZ, Long Island City and the mixed-use areas near the Port Morris IBZ.
“Mayor Bloomberg’s economic development strategy focuses on three key initiatives: making the City more livable, more business friendly and diversifying our economy,” said EDC President Alper. “Improving business conditions for our critical manufacturing sector touches on all three of these initiatives. This new policy will help us create a better partnership with the City’s many industrial companies and create the proper conditions to catalyze job growth.”
“Thanks to the Mayor’s new Office of Industrial Policy, New York City’s manufacturing and industrial businesses will now have the support they need to continue to comprise such a vibrant economic role,” said Commissioner Walsh. “IBZs will go a long way toward creating districts that are cleaner, safer and more attractive places to do business.”
Recognizing the importance of the industrial sector to New York City, the Mayor had convened a task force to develop a citywide policy that would support this viable industrial base. The task force made recommendations based on a series of focus groups, a survey of more than 500 industrial companies and roundtable meetings in each borough. One of the key recommendations was the creation of the Mayor’s Office of Industrial and Manufacturing Businesses, which is a new entity that will be housed within SBS. Carl Hum will serve as Director of the Office and will work closely with EDC, the Industrial Development Agency (IDA) and serve as chairman of the newly formed Industrial and Manufacturing Business Council, a Mayoral-appointed public/private partnership that will advise the City on the sector’s needs and opportunities. The Council will have up to 15 members made up of representatives from industrial and manufacturing businesses, development corporations, researchers, academics and advocates for industry and the real estate community.
“Carl’s distinguished career in public service and economic development have given him both the equanimity and the expertise to be an unparalleled leader in this effort, and we are fortunate to have him,” said Mayor Bloomberg.
“I want to thank Mayor Bloomberg for this wonderful opportunity,” said Director Hum. “My connection to the industrial and manufacturing sector in the City runs deep. I grew up in Sunset Park, Brooklyn, and my parents were both employed in the sector. My father pressed shirts in Greenpoint, Brooklyn and my mother was a seamstress in Chinatown. In fact, if it wasn’t for these jobs, my sisters and I never would have been able to go to college and pursue our careers. Even with the challenges of a global economy and changing urban landscape, the industrial sector still manages to significantly contribute to the City’s economy and provide gateway employment for many workers with minimal skills and limited English proficiency. The Office will not only help retain current businesses but help them grow and attract even more businesses to New York.”
The City will also expand employee recruitment, screening and training services to help industrial businesses reduce labor costs and access funds for employee training. The Office will offer $1 million in grants for industry-specific training programs, special initiatives that bring services closer to industrial businesses, and technical assistance to help industrial businesses access additional New York State training grants.
The initiative is designed to deliver tangible results quickly in areas that impact business operations. For example, a new “dumpster shed” program will ease the burden of trash storage, which was sited by industrial companies as a major source of frustration. Currently, the City offers businesses the option of building a shed on the sidewalk to store dumpsters, but this program requires completing a lengthy, expensive and burdensome process. The improved program will significantly lower the costs, streamline the process and reduce the time required to build a shed from roughly one year to six months. In addition, the City will:
In addition to these new initiatives, the City is already investing in this sector; in 2004 alone, the Industrial Development Agency closed on 23 transactions helping industrial companies in all five boroughs to expand or locate in New York City by providing them access to financing or tax benefits. Those deals spurred more than $94 million in private investment, and helped preserve about 2,100 jobs and create about 350 new ones. In addition, the Energy Cost Savings Program, which reduces the utility bills of qualified companies, is currently being received by more than 900 companies across all five boroughs including many industrial businesses, providing roughly $30 million in annual savings. And the City is investing more than $430 million in industrial capital projects throughout the five boroughs including $110 million at the Hunt’s Point Fish and Produce Markets, $117 million in the JFK Industrial Corridor, $68 million at the Brooklyn Navy Yard and $22 million at the Bush Terminal Piers in Brooklyn.
Founded in 1993, Arc Metal makes retail displays for department stores and boutiques and architectural metal detail and custom furniture for architects and designers. The company, located in Brooklyn’s East New York section, is receiving Industrial Development Agency assistance to buy and renovate the building it currently leases to reduce its operating costs and remain competitive with companies in less expensive locations. The IDA benefits, which total about $730,000 over the 25-year lease agreement, allows Arc to increase its number of employees to over 50 and includes real estate and sales tax abatements and a mortgage recording tax waiver.