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November 4, 2020updated 23 Mar 2023 12:10pm

What the pandemic means for NYC’s controversial waterfront rezonings

Developers of projects throughout the city have clashed with neighbourhood activists who fear that rezoning will exacerbate gentrification trends already under way.

By karina piser

controversial rezoning in Brooklyn

Industry City withdrew its ambitious rezoning proposal for South Brooklyn in September after nearly a decade of opposition. (Photo by Karina Piser)

In late September, Andrew Kimball, CEO of Industry City – a sprawling, 35-acre complex of retail, offices, storage and restaurants on the South Brooklyn waterfront – shocked New Yorkers when he withdrew a controversial rezoning application that had been years in the making. The proposal, which aimed to add more than one million square feet of new development, including hotels as well as large retail and office space, had been the subject of an intense battle between Kimball and community organisers in the Sunset Park neighbourhood, who opposed the project since it was introduced in 2013.

Kimball’s proposal would have lifted restrictions on what types of retail can rent space at Industry City, further reshaping the industrial property into what he called “a job-intensive hub for manufacturers, innovators and entrepreneurs, while also maximising economic opportunity for area residents and local businesses”.

The battle over Industry City’s future and the fate of the South Brooklyn waterfront is hardly unique. It mirrors a dynamic that has become increasingly common across U.S. cities – massive rezoning projects in working-class, immigrant areas, marked by increasingly visible clashes between private developers and neighbourhood coalitions.

Still, the project’s collapse comes at an unprecedented time for New York and its economy. Unemployment is at 16%, twice as high as the national rate. Income tax revenue is expected to see a $2bn drop this fiscal year. Two-thirds of the city’s hotel rooms are unoccupied, and Manhattan is full of vacant apartments. Against that backdrop, private developers and their allies are doubling down on promises of job creation, arguing that large-scale rezoning projects are critical to saving the city.

But the pandemic’s economic tolls have exposed and exacerbated glaring inequities in housing, labour and public resources that – on the heels of sustained protests over racism and mounting calls for social justice – activists say can no longer be ignored. Although tension between developers’ promises of job creation and local warnings of gentrification is not new, some activists are seizing the moment to upend the decades-long near-reverence of private development as an engine for economic growth in New York City, epitomised by massive mall-like complexes such as Hudson Yards.

The demise of Industry City’s rezoning plans raises important questions about where development projects will go from here. The venture’s failure buoyed neighbourhood coalitions across the city that want to use the momentum to push for a more inclusive process. Meanwhile, it frustrated developers and some political leaders, who fear it will set the tone for future rezoning plans and, accordingly, undermine the potential for job creation.

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“You see people waking up to how development has been done in New York City for some time: flashy proposals, back-room secret negotiations,” says Jorge Muñiz-Reyes, an organiser with Protect Sunset Park, which opposed the Industry City rezoning. “We proved that if you submit empty promises to public scrutiny, they collapse. The business community will have to think about a new model and actually engage the community in a real way.”

Muñiz-Reyes was referring to Industry City’s promise to create 20,000 new jobs – and  Kimball’s own admission, at a hearing before he withdrew the application, that more than a third of those had already been created without the rezoning. (Critics also pointed out that those projections predated the pandemic.) Organisers in Sunset Park, home to Latino and Chinese immigrant communities, argued that, regardless, those jobs would offer low wages that wouldn’t allow locals to stay in the neighbourhood, where a third of residents are already rent-burdened and housing costs continue to rise, leading to displacement.

Sunset Park activists, notably the environmental-justice group Uprose, have developed an alternative plan for the waterfront that would restore manufacturing, with an eye on climate jobs – in energy retrofitting, green industry and others – that tend to pay higher wages than retail, office and construction. “Coronavirus has made us see that, right now, investing in big malls, shopping centres, retail, office space, it’s not what we need. Instead, we need to work to build things,” Muñiz-Reyes says.

Roberta Gratz, a journalist and critic who previously served on the New York City Landmarks Preservation Commission and the Sustainability Advisory Board, agrees. “Manufacturing jobs pay a living wage, whereas hotel and janitorial jobs are slave wages,” she says. “So all these apartments, these stores, they’d be for whom?”

Because of the pandemic, Mayor Bill de Blasio paused the land review process required for rezoning projects to go ahead in March; it reopened in September. The coming months will see an escalation in tensions between anti-gentrification activism and the city’s critical need for jobs and economic stimulus – a fight over who should dictate the future of New York City. They will also test whether the awakening Muñiz-Reyes described will spill over to other contested rezoning projects on the city’s waterfronts and endure as New York City moves towards economic recovery.

Business leaders have lamented Industry City’s rezoning failure and worry an anti-development push will prolong the recession. “The failure of many politicians to support the expanded development of Industry City undermines their call for employers to bring people back to the office and pay higher taxes,” says Kathryn Wylde, president and CEO of the Partnership for New York City. “The opponents of Industry City have further damaged the prospects for economic recovery from Covid-19.”

Some observers dismiss the notion that Industry City was the nail in the coffin for similar rezonings. “In the next mayoral administration, I think you’ll probably see a stronger argument for jobs and growth,” says Matt Murphy, executive director of NYU’s Furman Center. “The reality is, the city is going to be hurting, and these large land use deals lead to big investments – construction jobs in the short term but also permanent jobs in the long term,” he says. “It’s going to be hard to say no to these types of major private investments.” Murphy pointed out that unions often support these projects: 32BJ SEIU, for example, which represents 80,000 service workers in the Greater New York region, supported the rezoning, though a handful of members dissented in the lead-up to Kimball’s withdrawal.

Even if retail, offices and hotels are suffering right now, they’ll eventually bounce back, Murphy added. “Land use decisions are not made to calibrate to a perfect moment. They’re not made to say, if market demand changes, we’re going to change the zoning or vice versa.”

Kimball attributed his decision to a political climate hostile to new development, blaming the “lack of interest at all levels, but particularly at the city council, in engaging in a constructive dialogue”. Business leaders have also blamed de Blasio, who refused to take a position on the Industry City dispute, calling it a private matter. According to reporting by Politico, the mayor is “worn down by community opposition to development”; a recently announced rezoning proposal to add affordable housing to SoHo, a predominately white, wealthy Manhattan neighbourhood, signals a possible shift in approach.

Anti-development sentiment and efforts to combat gentrification are increasingly reflected in policy, such as moratoriums on evictions and utility shutoffs, and in politics, notably with the growing influence of the Democratic Socialists of America, whose South Brooklyn chapter opposed Industry City’s rezoning. In July, Marcela Mitaynes, a tenant activist and outspoken opponent of the proposal, defeated longtime Assemblyman Felix Ortiz, who had held his seat since 1994. Kimball has said that some politicians explicitly told him that even if they supported the proposal’s substance, supporting it would hurt them politically.

The trend hasn’t been lost on organisers in other boroughs. In Flushing, a predominantly Asian neighbourhood in Queens, developers are moving ahead with the Special Flushing Waterfront District proposal to rezone the waterfront, adding a 13-tower complex that includes retail, hotels, offices and more than 1,700 apartment units (75 to 90 of which would be affordable-housing units). Flushing has already experienced massive development in recent years; it saw the city’s second-highest rate of new condo construction (none of which included affordable units) from 2009 to 2019.

Seonae Byeon, the lead housing organiser at the MinKwon Center, a New York non-profit that represents Asian American and immigrant communities, has been fighting not only the project but the land review process itself. She says that undertaking sidelines neighbourhood residents and has paved the way for luxury development and high-end retail. “You have a virtual public hearing due to the pandemic, in the middle of the workday, on a project that concerns a neighbourhood where 41% of households don’t have internet access,” Byeon says, referring to a City Planning Council hearing last month. “My tenants were out collecting water bottles on the street to earn enough to feed their families, while this hearing was going on.”

In June, the MinKwon Center and other groups sued the Department of City Planning and the City Planning Commission, arguing the developers had failed to conduct an environmental review or consider locals’ demands.

The Flushing development’s backers echo Industry City’s employment claims, promising 3,000 new jobs. “Nothing is perfect in life or in development, and taking into account the fact that we have nearly 20% unemployment, we should embrace development projects that require no city or state funding,” says Tom Grech, CEO of the Queens Chamber of Commerce. “This is a remarkable opportunity as we try to exit Covid. We’re nowhere near the home stretch and should be rolling out the red carpet as a city for these projects.” The City Planning Commission approved the Special Flushing Waterfront District proposal on 4 November.

An aspirational rendering of Gowanus waterfront rezoning

New York City’s planning departments says that increasing the resiliency of the neighbourhood has served as the focal point for the Gowanus rezoning effort, but many activists are sceptical. (Rendering courtesy of NYC Planning)

In Gowanus, another waterfront slated for rezoning, residents are also putting up a fight. The Brooklyn neighbourhood runs along the Gowanus Canal, one of the most polluted bodies of water in the US, and is near one of Brooklyn’s largest public-housing complexes. Residents have asked city representatives to address pre-existing environmental concerns before green-lighting any new development, and notably to address toxin-related health risks that disproportionately affect public housing in the area; instead, they say, the rezone map excludes some 10,000 public-housing residents.

“There’s a struggle going on in these communities between [land review] policies and procedures and community engagement and constituency power,” says Karen Blondel, an environmental organiser with the Fifth Avenue Committee, a non-profit that advocates for economic justice, and a longtime resident of New York City public housing. “We are at a transitional time where people want these antiquated processes upgraded, they want more transparency, and they want to be part of the conversation about what should be done in their neighbourhood.”

Activists are increasingly focusing on the land review process itself, arguing that structural imbalances make it difficult to influence how projects unfold. In Gowanus, residents are calling for public hearings to be held outdoors for the remainder of the pandemic, rather than online, to increase accessibility. In Sunset Park, activists say the City Charter should be revised to allow for community input on rezoning plans. There’s already a built-in mechanism for that, too: a required waterfront plan every ten years (the next is due at the end of this year).

Members of city council seem to be at least acknowledging the costs of a process that doesn’t give all the parties an equal say. “We’ve had some non-successful endeavours if you just look at what happened just recently at Industry City,” Robert Cornegy, who chairs the housing committee, said at a recent event. “There was an opportunity there, potentially, if everybody would sit at the table, to come up with a comprehensive plan in a time that calls for that. So I’m hoping that, moving forward, we can begin to look at this.”

For Gratz, the journalist and critic, economic growth shouldn’t be the only goal. “What city are these developers building for?” she asked. “They don’t care how it disturbs the urban texture of a city or inflates local prices, displacing people. But New York cares.”

Karina Piser is a New York-based journalist whose work has appeared in the Nation, the New Republic, the Atlantic and elsewhere.

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