Here’s how Industry City’s controversial rezoning unraveled

A 7-year history of the contentious plan

New York /
Sep.September 25, 2020 07:00 AM
The proposal to rezone Industry City in Brooklyn was unveiled five years ago, but collapsed under political pressure (Courtesy of Industry City)

The proposal to rezone Industry City in Brooklyn, unveiled five years ago, collapsed under political pressure (Courtesy of Industry City)

Industry City was once set to become one of the biggest manufacturing hubs — and, with any luck, job creators — in Brooklyn. Now, it’s the latest example of a major development that couldn’t get through New York City’s political gauntlet.

This week saw a crushing setback for the 35-acre campus: The development team — a partnership between Jamestown Properties, Belvedere Capital, Cammeby’s International and Angelo, Gordon & Co. — abandoned its plans to rezone the site, which would have allowed for more retail, academic and commercial space. Instead, the team will turn to other uses, such as a last-mile distribution center.

The developers’ stunning reversal rankled the real estate and business leaders who viewed the rezoning as a much-needed jolt to the city’s pandemic-ravaged economy. The development team projected that the rezoning would create thousands of jobs and generate $100 million annually in tax revenue.

The decision followed years of debate and mounting political pressure from Brooklyn elected officials. Sunset Park City Council member Carlos Menchaca, who supported the proposal in its infancy, became a vocal opponent of the rezoning. He argued it would exacerbate displacement and gentrification in the neighborhood, endangering the livelihood of its thousands of working-class immigrant residents.

He and others also called the development team’s estimate that the rezoning would generate 20,000 jobs misleading, pointing to the fact that 8,000 of those jobs were off-site and the sum included jobs that already exist at the complex.

“Industry City attempted to use their money and influence to circumvent the community-backed position and win over Council members,” Menchaca said in a statement after the developers pulled the rezoning application. “This is a huge win for the Sunset Park community. People power has triumphed. ”

But how did it come to this? Here’s a breakdown of how the rezoning proposal evolved — and unraveled — over the last seven years.

September 2013: Jamestown Properties agrees to buy a stake in the 16-building campus, joining a partnership that already includes Belvedere Capital and Angelo, Gordon & Co. The developers proceed to invest more than $400 million to complete renovations and infrastructure improvements at the complex.

March 2015: The development team unveils a $1 billion, 12-year proposal to change the site’s M3-1 zoning, limited to heavy manufacturing, to M2-4, which permits light industrial and commercial uses. The developers propose adding 900,000 square feet of retail and 270,000 square feet for hotels, as well as academic and community space.

Menchaca tells Commercial Observer that the announcement represents “a moment to celebrate” and that the proposal is “going to include jobs for the local community which has been asking for this for 20 years.” He also expresses concern for Sunset Park’s immigrant population, which has long been left out of workforce development programs, but says he’s hopeful that these connections will be a focus for Industry City.

November 2018: The development team presents its plans for Industry City at a contentious Community Board 7 meeting. Elizabeth Yeampierre, executive director of nonprofit UPROSE, tells the Brooklyn Reporter that the rezoning is “completely in opposition to a vision that supports the working class and good-paying jobs for those people.”

February 2019: Industry City CEO Andrew Kimball files a 135-page rezoning application with the city, four years after the site’s expansion was first announced. The proposal would allow the campus to increase to 6.5 million square feet, up from 5.2 million.

The application is filed just days after Amazon ditches its plan to build a headquarters in Long Island City. Opponents of that project, like Industry City, were concerned that local residents would suffer from, rather than reap, the economic benefits touted by its proponents.

March 2019: Menchaca and Community Board 7 Chairman Cesar Zuniga write to Kimball that the community needs more time to evaluate concerns about displacement and gentrification before the Uniform Land Use Review Procedure commences. After criticizing the request, Kimball agrees to postpone the public review, which is needed to make the zoning change happen.

September 2019: Plans to officially start Ulurp are once again delayed after Menchaca says he will only support rezoning if a series of changes are made to the application, including the elimination of hotels. He also calls for the formation of an independent coalition to review the application and ultimately sign off on a community benefits agreement containing promises by the development team.

October 2019: The application moves forward and is certified by the City Planning Commission, marking the official start of Ulurp. Menchaca says he is prepared to vote against it when it reaches the City Council.

January 2020: Community Board 7 is split on the application. The body votes against two of the requested land-use changes and can’t reach a consensus on the other two.

“I hope that this is going to be a message to the developer, to City Planning, and to the administration that the application is highly fraught,” Zuniga tells Curbed. “We are not just going to rubber-stamp unmitigated development to the detriment of our community.”

Borough President Eric Adams gives conditional support of the proposal.

July 2020: After the city halts Ulurp for several months due to the pandemic, the developers indicate that they might withdraw the rezoning application, telling Politico that “a number of convergent factors are causing Industry City to question whether or not it should pursue the rezoning.”

The next day, Menchaca announces that he will vote against the proposal. Following his announcement, the developers change their tune, saying they are holding out for a hero.

“Often, in times of great crisis, great leaders emerge,” Lee Silberstein, a spokesperson for Industry City, tells The Real Deal. “We are hoping that will be the case in our effort to work with city leaders to fully implement a plan to create 20,000 jobs and generate hundreds of millions of dollars in taxes.”

August 2020: Council members Ritchie Torres, Donovan Richards and Robert Cornegy come out in favor of the rezoning. It’s an unusual move in a land-use fight where the local council member vehemently opposes the application.

The rezoning also secures support from key labor groups, including the Building & Construction Trades Council of Greater New York, 32BJ SEIU and the New York City District Council of Carpenters. The groups call on City Council Speaker Corey Johnson to save the controversial proposal.

September 2020: Johnson declines to swoop in to the proposal’s rescue — publicly, at least. The City Council holds its first hearing on the rezoning, during which Kimball highlights concessions his team has made, such as agreeing to eliminate dormitories, hotels and conference space from the proposal. The development team agrees to put off adding retail and new buildings until it has proven that jobs at the complex will go to local residents.

On Sept. 22, a dozen elected officials who represent Brooklyn — including four members of Congress — write a letter opposing the rezoning, saying it would “supercharge the displacement and gentrification that is undermining Sunset Park’s affordability and blue-collar job base.”

That same day, the development team pulls its rezoning application. At a press conference Sept. 24, Kimball says the “supercharged environment” prevented a “thoughtful consideration of the substance of the proposal.”

“It became clear to us in recent days that there was just a lack of leadership in government,” he says.

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