“Information-” or “knowledge-based” jobs, in the FIRE sectors, so the conventional rationale went, were the wave of the future. Thus, a carefully planned, neat, newly created city to house a financial-based, information-age, and service-based economy would purposefully replace a messy, organically grown, unpredictable, and fundamentally flexible economy that had evolved according to no imposed plan. For this scenario, growth of the city economy was overly dependent on leveraging the value of real estate instead of the entrepreneurial spirit and energy of people whose innovative ideas create the new businesses, jobs, and meaningful expansion and growth. This scenario is also heavily dependent on public funds or incentives of all kinds, what many call “corporate welfare.” This distorted economic policy at best leaves the city vulnerable to economic shifts that would be mitigated with a more balanced and diverse economy in place. Instead, the current overdependence on Wall Street evolved.
In the 1980s, for example, white-collar jobs on Wall Street and in other FIRE sectors proliferated with head-spinning growth. Proponents of this “new economy” strategy patted themselves on the back. Then in the late 1980s, the stock market took a nosedive. Jobs were lost with the same head-spinning velocity they had grown. According to the Federal Bureau of Labor Statistics, Manhattan, where most FIRE-economy jobs take place, lost 149,000 jobs between March 1989 and April 1992. This equaled the entire gain since 1980. In other words, by the early 1990s, all the job gains of the 1980s were lost. Considerable revenue was lost, too, due to all the corporate tax breaks given to businesses to remain in the city and create jobs.15 Even more jobs were lost during a period of heavy mergers and consolidations. Of course, jobs in this sector multiplied again in the boom of the late 1990s. A bigger loss occurred in 2008. If, however, New York had nurtured its multiple economic assets, tumultuous ups and downs in one dominant sector might have been balanced by sectors experiencing less dramatic shifts.
Also during the 1980s, as city policy and investments were focused on nurturing this white-collar economy, industry experienced insult upon injury. Developers were getting tax breaks, subsidies, and cheerleading from all city agencies. But industrial districts were suffering service cutbacks and infrastructure neglect. Gratz Industries experienced periodic break-ins in the 1980s. When Donald sought some police assistance, he was told there was one patrol car for the entire district. When it rained, the street in front of the shop flooded due to a clogged drain that caused long-lasting backup. All pickups and deliveries occurred at this frequently flooded entrance and were made exceedingly difficult. I remember Donald’s innumerable frustrating attempts to call one city agency after another, over and over again, pleading for relief. It took years.
FALSE GOD OF EFFICIENCY
The 1929 plan of the Regional Plan Association (RPA) first reflected in a formal way the emerging disdain for the messy, difficult to define, individualized assortment of industries and the similarly varied residential neighborhoods. While this view of urban life already had been growing, it was codified in the 1929 Regional Plan and embraced and implemented enthusiastically by Robert Moses.
Here was the first potent articulation of the view still in force today that the city’s major asset was not its pulsating, complex industrial economy, its diverse entrepreneurs, its patterns of innovation and new start-ups, its energetic immigrants, and its skilled and semiskilled workers but its residential and corporate real estate. Rearranging the city’s built form to be more orderly, less congested, and cleaner was the goal. Real estate became the resource of choice to effect the change.
This transfer of economic priority was not a natural market shift but one of official policy. The RPA, the establishment’s favorite nongovernmental voice, led the chorus for this refrain, supported by “The Plan.” City officials, financial leaders, corporate heads, newspaper editorial boards, unions, architects, and the emerging profession of city planners embraced it wholeheartedly from 1929 forward. The appeal of this strategy was strengthened by the federal funding that would fuel it.
The broad acceptance of this urban strategy in effect gave Robert Moses carte blanche to pursue his vision of the efficient city of demolished, replaced neighborhoods connected by an efficient spaghetti network of highways. Under the skillful direction of Moses, the master builder who could get things done, all things would be put where they belonged. Productive efficiency would be the result, so the thinking went.
Cities, however, cannot be reduced to an efficient order like a machine, as Jacobs has taught. Efficiency stifles innovation and a diverse economy, as one learns well from her book The Economy of Cities (1969). In this, Jacobs’s second and probably most important book, she shows in several ways how “efficiency fails to make a city prosper.” In her chapter “The Valuable Inefficiencies and Impracticalities of Cities,” Jacobs describes how Manchester, England, stagnated due to its “efficient specialization,” becoming an “obsolescent city” and “the very symbol of a city in long and unremitting decline.” The economy of Birmingham, on the other hand, “did not become obsolete, like Manchester’s. Its fragmented and inefficient little industries kept adding new work, and splitting off new organizations, some of which became very large but were still out-weighed in total employment and production by the many small ones.” The key measurement of the economic rate of a city, Jacobs points out, is “the addition of new work to . . . older work” in which Birmingham excelled.16 Her analysis of efficient and stagnant Manchester contrasted to fragmented and diverse Birmingham remains instructive.
The efficiency that has great value, Jacobs also shows, is the efficiency of density, what she calls the “concentrated market.” That concentrated market “is, in itself, an efficient thing. And its chief characteristic, that it is concentrated, makes it possible for small, fragmentary, exceedingly special, weak or much-duplicated enterprises to operate with considerable inefficiency and yet often get away with it. But apart from this, as far as I can see, the conditions in a city that promote efficiency of operation are in conflict with the conditions that promote development work.”17
Economist Sandy Ikeda provides a similar take on this idea:
The modern demand to rationalize the city and to make it ‘more efficient’ is misplaced. A living city cannot be efficient. Efficiency, in the economic sense, presupposes an overarching plan against which measured outcomes can be evaluated. A living city, however, follows no such plan. It is itself the unplanned, collective result of the countless individual plans executed continuously in it day after day.
Neither can it be inefficient, because that too presupposes a system-wide plan. Both efficiency and inefficiency presume that we know how things ought to be, what success and failure look like, and that’s impossible in the urban dynamic. Instead, . . . a living city is a ‘dynamically stable’ process . . . [that] generate[s] order through time. It embodies trial and error, surpluses and shortages, apparently useless duplication, conflict and disappointment, trust and opportunism, and discovery and radical change. These are in the nature of the living city.18
The valuable economic density that Jacobs refers to, fostering new business formations and breakaways from existing businesses, is what is being eroded as the city’s industrial neighborhoods are purposefully transformed into high-end residential communities, erroneously labeled “mixed use” because some retail and commercial space is included. This continues the never-ending search for order. Overdesigned order represented by large-scale redevelopment projects inhibits new patterns of activity. It stifles the fundamental DNA of the New York economy, which is more complex, unpredictable, fluid, and diversified. The result is a monoculture revolving around financial and related services—in other words, Moses’s sterile vision of efficiency.
Thus, in the name of rational planning for the efficient service and financial economy, many of New York’s industrial jobs were deliberately and needlessly lost, an occurrence still happening in twenty-first-century New York. City officials boast of a much dimin
ished rate of displacement from renewal-type projects since the days of Robert Moses. Maybe the loss is less, but, of course, what’s left is already diminished considerably. And maybe it is more scattered around the city. But it is like being a little bit pregnant: first month or ninth, you are still pregnant. Displacement is displacement at any rate. The loss continues to be unnecessary and avoidable, given available alternatives. The pursuit of oversized replacement projects continues to cause needless disruption and economic and social loss.
City officials, for example, are enthralled with new mall development where possible, missing the opportunity to preserve small, growing businesses or create new, much-in-demand industrial space to incubate new ones. In 2007, a large city-owned vacant industrial building provided a redevelopment opportunity for which the city sought a developer. The location was in Sunset Park, a traditionally mixed industrial and residential area in Brooklyn. One development team proposed to recycle the existing building, making it totally energy independent and giving it a modern new design. Most of the space would be retained for industry, but retail and residential would be added modestly. The developer’s primary goal was to preserve industrial space and advance a sustainable development opportunity. The proposal offered an interesting mix of uses asked for by the city. But, instead, the city chose a politically well-placed developer planning a conventional shopping mall and upscale housing mix. The idea of preserving some space for industry was dropped entirely. Fortunately, the economic collapse caused the winning developer to withdraw, and a chance exists that the first developer interested in industrial space may be the winner after all.
Moses’s power diminished and then disappeared in the late 1960s and ’70s, but the industrial erosion continues under new policy formations.
LONG ISLAND CITY ESCAPES FOR A WHILE
For reasons not apparent, most of Long Island City escaped the worst of this urban strategy for a long time, probably because the focus and interest of planners and real estate speculators were elsewhere in the city. Our factory is just south, in the shadow of the Fifty-ninth Street Bridge. North of the bridge had been totally bulldozed and replaced in the 1930s with a thirty-six-hundred-unit tower-in-the park public housing complex—twenty-six six-story buildings on six superblocks and a lot of fenced-in green grass. But south of the bridge—down to the entrance of the Queens-Manhattan Tunnel and the beginning of the Long Island Expressway—escaped major surgery. It was the strongest and densest area of the whole city’s industrial economy until recent years.
Long Island City’s escape from the worst was not through any positive action on the city’s part. In fact, commercial and residential development was heavily encouraged by the city but went nowhere fast because the market wasn’t there yet. But even at slow speed, redevelopment began a nibbling trend that has accelerated over time. In 1989 CitiCorp built a huge tower with a facade of green glass and ninety-seven million dollars in tax abatements. Several suppliers of materials like aluminum and small job shops disappeared. All sorts of ancillary service businesses—pattern makers, cabinet shops, upholsters, machine shops—were priced out and moved away. The farther they moved, the higher became our cost of doing business. The serious erosion of this industrial heartland was perhaps later than other areas but gaining momentum.
Queens West, at a onetime waterfront port and terminal site with varied industrial buildings, was begun—a massive, highly subsidized complex of high-end residential and commercial towers meant to be a whole new neighborhood, not unlike Battery Park City but surely out of place in a functioning industrial district. Five apartment buildings went up in ten years. The plan for sixteen apartment buildings with forty-four thousand apartment units and four office towers on this seventy-four-acre site gained momentum in recent years as new development raced forward all over the city.
Long Island City’s Hunters Point community was hardly a blighted outpost. A longtime industrial and manufacturing district was mixed in with a historic Italian working-class community that included small locally owned businesses. Thirty-two companies were located there, employing two thousand people doing everything from baking to servicing elevators. Some land had been vacant for years, left from the 1940s when land-banked property was held for large-scale schemes, such as a possible UN residential village, directly across the East River. The Planning Department staff member who surveyed the area in 1980 found that this was a robust mixed neighborhood with a fair amount of thriving industrial businesses. Her bosses did not want to hear it. They demanded instead that she sign a document reporting it was blighted. She resigned instead.
THE PAST IS PAST
Absolutely no one is suggesting that New York City will or could once again become an “industrial” city, but this is a simplistic way of dismissing economic realities that question current thinking. The challenge the city fails to face is allowing existing industry to survive instead of being excessively sacrificed on the altar of real estate development. The loss of industry is no more now a natural process than it was over the past fifty years.
The twenty-first century needs a new set of definitions for such things as “manufacturing,” “industry,” and “crafts.” New York has become a so-called service, not production, economy. But what is service and what is production? Is Kinko’s a service provider with its copying services or a manufacturer with its production of bound books or both? Is the stained-glass craftsman who restores deteriorating old church windows but also designs and produces new lighting fixtures a craftsman, service provider, or object producer, or all three? And what is the designer who designs for others and also produces a small inventory to sell retail on-site? Then there is Sarabeth’s Kitchen, which started twenty-nine years ago as a jam-and-jelly shop and became one of the city’s top gourmet-food brands. Two Sarabeth’s Kitchen restaurants are quite popular. The brands are sold in grocery stores, with baked goods and soups added to the mix. So is it a restaurant, wholesaler, or retailer, or all three? And what about the hairdresser who provides the usual services but also produces his own line of products, manufacturing and selling them? In what categories are these businesses classified and measured in the economy?
Likewise, one need not advocate bringing back lost industry to promote the idea that manufacturing is not only alive but actually an undervalued economic sector with new things bubbling up that could be nurtured instead of strangled. Industry can’t be brought back to what it was, but neighborhoods where new innovations might emerge could be protected and nurtured. New elements of a green economy—products to serve the new interest in green construction—are starting here in hidden ways, but may not be able to find the space in which to grow, expand, and add new work to old.
The important thing is to recognize the multiple values that existing industry has for the city and its workforce and not lose what exists because a real estate speculator has designs on a site or a district. A manufacturer today may lose a market or find a more economical way to produce overseas, but that does not mean another form of production won’t fill the unused space or employ the same skilled labor, just as Gratz Industries has over the decades. And who could anticipate production work returning to our shores because of the weak dollar, increased production costs abroad, and high shipping costs?
CREATIVE CONVERSIONS
As larger businesses leave today, the spaces once occupied by single-use tenants are sometimes being divided up for multiple smaller businesses. One of several buildings once occupied by the Eberhardt-Faber Pencil factory in Greenpoint was divided into dozens of smaller spaces for woodworkers, designers, jewelry manufacturers, printers, and artists. The forty-thousand-square-foot former Nassau Brewery in Crown Heights has been carved up into two dozen smaller spaces ranging from four hundred to four thousand square feet, and includes a mix of metalworkers, designers, video producers, and others. The former Monti Moving & Storage building, also in Crown Heights, is now home to twenty-five workspaces that include artists, woodworkers, film editors, set designers
, and architects.
Also significant is the proliferation of food-preparation businesses occupying old factories. This is especially true of ethnic specialty foods, the fastest-expanding segment of the growing New York food industry that includes everything from a variety of breads to chocolate and beer (again). The problem comes as these small companies succeed and grow and need larger spaces, the kind the city is losing rapidly. Many will be forced out of the city. At the same time, Friedman notes, not enough big spaces are being divided into small spaces, as O’Connell and Sweeney have done, as we will see. Start-ups need rental spaces under ten thousand square feet. A space mismatch exists. The supply is the bigger older buildings for single-use tenants, and the demand is for small and medium-sized properties. This seeming contradiction becomes understandable when one observes that the big ones frequently are converted to high-end condos, not new industrial space.
TRUE ECONOMIC DEVELOPMENT IS A RENEWABLE PROCESS
Many familiar corporate giants—Kodak, General Motors, Apple Computers, Macy’s—were started by a single innovative entrepreneur. Starting in a small, limited way, each one expanded, shifted its product mix, and evolved into a corporate giant. That process is not anachronistic. It repeats itself regularly when not stifled by city policies. This is the DNA of economics. Some famous companies didn’t start out making what they became known for, as Catherine Rampell pointed out in her article mentioned earlier about companies reinventing themselves. Nokia made paper before cell phones. Toyota made looms before cars. Some auto-parts manufacturers today have reinvented themselves into windmill turbine producers. For city planners to continue to plan and rezone as if industry can’t survive, grow, and be a significant contributor to the city economy is dramatically shortsighted. The rezoning of almost every industrial district in the city reflects that shortsightedness.
The Battle for Gotham Page 25
