One of the keys to creating an “innovation district” is small leasing space.
“From a buildout strategy, you have to be willing to go really, really small,” Andrew Kimball, CEO of Industry City, said during a panel held on Thursday. “You start these companies small, they want to be around each other, and then you grow them.”
Kimball said 250 of the office complex’s more than 450 tenants occupy space of less than 1,500 square feet. Kimball was one of the panelists at an event held by New York University’s Schack Institute of Real Estate titled “When Real Estate Meets Innovation.” He shared the stage with Kate Bicknell, senior vice president of commercial and residential development at Forest City New York; Regina Myer, president of the Downtown Brooklyn Partnership; and Brian Platt, chief innovation officer for Jersey City. The Real Deal‘s digital editorial director Hiten Samtani moderated.
The panel touched on some of the obstacles that could prevent tech companies and their products from succeeding in the city. Kimball acknowledged that proposed changes to healthcare law could be disastrous for small startups and freelancers who are drawn to spaces like Industry City.
Transportation options and aging infrastructure can also be major turn-offs for tech giants like, say, Amazon — a company that several cities are throwing money at in an attempt to lure its second headquarters. The fates of projects like Gateway and the Brooklyn-Queens Connector, which promise dramatic improvements to access, remain up in the air and could make or break New York’s chances to compete for businesses.
Myer noted that transportation options between the Brooklyn Navy Yard to Downtown Brooklyn are severely lacking.
“I’m ashamed, honestly of what access looks like,” Myer said. She said the partnership plans to work on connecting Downtown with other areas of Brooklyn.
Outdated laws also stand in the way. Kimball said the city’s zoning laws that segregate uses (commercial, residential, industrial) can also be a hindrance to innovation (he’s seeking a rezoning at Industry City that would allow for different uses on site, like academic and retail space).
At Pacific Park, Forest City put modular construction to the test, an experiment that came with a few construction mishaps and litigation with the project’s contractor, Skanska. Forest City eventually sold the modular company it launched for the project.
“When you are the first to try something big, there are roadblocks,” Bickell said. “In terms of the technology, in terms of solving high-rise modular construction… I think we’ve cracked the code in that space.”
She added that as a public real estate investment trust, Forest City has decided that owning the business was no longer a focus for the company. As part of the mayor’s affordable housing plan, the Department of Housing Preservation and Development is seeking to expand use of modular construction throughout the city.
Bicknell said state and city governments need to create policies so that New York becomes a “city of yes,” meaning that it’ll pave the way for new technologies like driverless cars. Platt agreed.
“What we find a lot is that governments, for the city and the state, are not as flexible and responsive as we’d like to technology,” he said. “We find a lot of people say, ‘We tried this in New York, there’s a lot of bureaucracy so we’ll come and try it in Jersey City.'”
He explained this is often a misconception. (New Jersey also, apparently, has laws.)