A proposed waterfront redevelopment would have created thousands of jobs and cost the city nothing.
In an echo of last year’s Amazon debacle, a proposed economic development project slated to bring 20,000 new jobs and $100 million in tax revenue to New York City is dead. Again the city’s progressive politicians are to blame.
Last month the owners of the 35-acre Industry City site, a 16-building warehouse complex in Brooklyn’s Sunset Park neighborhood, withdrew their rezoning request rather than let the City Council deny it. Crime and unemployment are soaring, residents are fleeing amid the pandemic, the city’s budget deficit has topped $9 billion, and as many as a third of its small businesses have closed permanently. But New York’s elected representatives think the Big Apple’s real problem is gentrification.
The developers would have built desperately needed manufacturing, commercial and retail space in an economically distressed area tucked between the waterfront and Brooklyn-Queens Expressway. But it also included hotels, restaurants and nice apartments, so politicians decided to kill it. Even some members of the Democrat-dominated council don’t understand why the project had to die. “The potential for mass job creation at Industry City, a rare oasis of manufacturing, is one of the few glimmers of hope in a moment of despair,” wrote Councilmen Richie Torres and Donavan Richards in an August op-ed.
Mayor Bill de Blasio notably declined to take a position on the Industry City proposal. A host of prominent Democrats, including Reps. Nydia Velasquez, Jerrold Nadler, Yvette Clarke and Hakeem Jeffries, weighed in against it. These are the same politicians begging Washington to bail the city out. But it was Carlos Menchaca, the councilman who represents the area, who drove the knife in.
Mr. Menchaca said he opposed the project because the city’s land-use process “favors corporate developers as they profit off the displacement of working-class New Yorkers.” He also objected to what he called its lack of accountability: “When a private developer says they will create 20,000 jobs, it doesn’t mean they will. We must always ask the follow up: For who?”
This is shameful economic ignorance. No developer can pinpoint exactly how many jobs a project will create, or determine in advance who will take those jobs. Business isn’t a “program.” Investment entails risk, not guarantees.
Still, it isn’t hard to imagine how the Industry City jobs scenario might have played out. A start-up begins by hiring young techies rather than the Hispanic and Chinese immigrants who predominate in Sunset Park. Over time, however, a new tech product requires assembly and marketing. When immigrants who work in the new Industry City hotels and retail shops hear about the high-paying tech jobs, they might apply and be trained to take them.
Mr. Menchaca is evidently satisfied with the economic conditions in Sunset Park, where 29% of residents live in poverty, according to a 2018 report by the city’s Health Department. The citywide poverty rate is 20%.
Because of their elected representatives’ malfeasance, New Yorkers will now miss out on something akin to an economic free lunch. Unlike Amazon, the owners of the site weren’t seeking tax breaks, only a rezoning. So in a time of economic duress, the city passed on an opportunity to make an essentially costless bet on a major job-creating project in an underserved part of town.
New York’s politicians share the blame for this fiasco with several antidevelopment community organizations in Sunset Park. One such group, Uprose, has its own proposal for Industry City but no investment capital. Uprose fantasizes about turning the site into a “Green Resilient Industrial District” that would create “well-paid climate jobs in renewable energy, energy efficiency, construction, and sustainable manufacturing.” The group asserts that such jobs would pay more than retail and office jobs contemplated by the now-dead proposal, but wishful thinking is no basis for policy.
Another group, Protect Sunset Park, worried that the new Industry City apartments would be a magnet for devotees of avocado toast and chardonnay—and push up the rents for adjoining parts of the neighborhood. Some Sunset Park brownstones—there aren’t many—have attracted wealthy hipsters to the area. But, if anything, a new supply of high-rent apartments would serve that demand and reduce the displacement that Mr. Menchaca and others are so worried about.
Jane Jacobs became a New York hero largely because of her successful protests against Robert Moses’s highway plans. But Jacobs remains our most astute observer of how cities thrive—or die. She would have much to say about the Industry City debacle. In her 1969 book, “The Economy of Cities,” she described how healthy cities grow sick when new economic activities threaten to displace entrenched ones: “This is a conflict that can never be put to rest except by economic stagnation.”
That’s what New York, and Sunset Park in particular, faces. Progressives should be interested to learn that Jacobs believed “the only way to keep open the economic opportunities for new activities is for a third force to protect their weak and still incipient interests. Only governments can play this economic role.” If only New York’s government were willing to do it.
This piece originally appeared at The Wall Street Journal (paywall)
Photo by Spencer Platt/Getty Images