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Queens Chronicle

What will become of industrial zones?

IBZ supporters seek more funding; mayor remains mum on plans

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Posted: Thursday, February 27, 2014 10:30 am | Updated: 12:34 pm, Thu Mar 6, 2014.

City agencies’ defense of Industrial Business Zones — areas set aside to promote industrial growth — has become somewhat of an affectation as more and more pieces break off of the IBZs to accommodate residential and commercial uses.

Almost one year ago, a plan to erect a 90,000-square-foot residential building was presented at a Citizens for a Better Ridgewood meeting. Many were thrilled at having a new residence on the corner of Woodward Avenue and Starr Street but urban planning and IBZ advocates said the building is a blatant contradiction of City Planning’s “iron-clad commitment” to preserving manufacturers and industrial businesses.

City Planning’s response was that IBZs are a living entity, subject to change as neighborhoods develop. In September, they removed a slice from the Maspeth IBZ containing the plot for the proposed apartment building. Now the architect can move forward with his plans.

The series of loopholes intentionally placed in the zoning process has frustrated many, including Mayor de Blasio who, while he was campaigning, criticized former Mayor Bloomberg for discontinuing support of the city’s 16 IBZs.

“Currently, too many non-industrial uses are allowed in the city’s areas zoned ostensibly for manufacturing or industrial production,” de Blasio wrote in a document titled “A Progressive Vision for Industrial Development in New York City.” “... in too many of these zones, instead of workshops and factories, we see storage facilities, gas stations, superstore retail and hotels. These uses should not be allowed into industrial zones, and the zoning laws should be changed to restrict new developments of this type in these areas.”

The report was exactly what groups like the Pratt Center and leaders of IBZ groups were waiting to hear.

But shortly after he was elected, de Blasio’s budget proposal showed $1.1 million allocated for IBZs would be eliminated.

IBZs had been zeroed out of Bloomberg’s budget for the rest of this fiscal year, though $1.1 million was restored in the final version by former Councilwoman Diana Reyna (D-Brooklyn, Queens).

“At this time we’re scurrying around trying to get funding reinstated and increased,” Deb Mesloh, the IBZ manager for the Long Island City IBZ, said. “So far we’ve helped get $30 million in financing for businesses, $5 million in incentives and we’ve helped them get over a million in training. This is just Long Island City, I’m not even adding what the other IBZs do. We really want to be able to help these businesses thrive.”

Since taking office, de Blasio hasn’t publicly spoken about industrial businesses and the administration is still working on its economic development plans so specific intentions are not readily available, but a spokeswoman assured that de Blasio is just as committed to the IBZs as he was when he was running for office.

“The de Blasio administration is committed to making smart, impactful investments that will help industrial business thrive in New York City, and is working with our agency partners to take a fresh look at the suite of programs that support this critical part of the economy,” the spokeswoman said. “Spending differences in one program do not speak to the overall commitment to industrial firms and their jobs.”

According to the state Department of Labor, the annual wage for a manufacturing employee is more than $53,000, compared to the $36,000 wage for a retail worker and the $24,500 wage for a food-service employee.

With that in mind, supporting manufacturing business and IBZs would seem a natural fit for de Blasio, who has made a point to address the “struggling middle class” by creating good-paying jobs within the city.

“These businesses help so many people,” Mesloh said. “They are giving livable wages to New York City residents who often live near the neighborhood they are working in. Not everyone is an entrepreneur but these jobs give opportunities to good workers.”

While the fate of the IBZs and the businesses therein remains up in the air, rumors have surfaced.

Jack Friedman of the Queens Chamber of Commerce and a Community Board 13 member addressed his CB recently on the JFK IBZ — the largest in the borough.

“It looks like the city is going from IBZs to IBIDs,” CB 12 Economic Development Chairman Glenn Greenidge, who attended the meeting, said. “The funding would no longer be city based and would be generated from the BID structure.”

Friedman did not return requests to comment.

A BID or business improvement district is a defined area within which businesses pay an additional tax in order to fund projects within the district’s boundaries. The projects can include street maintenance, graffiti removal and beautification.

While the pros of such a district are obvious — for example, a BID would not rely on city funding, meaning budget cuts are less likely — the cons may be a little less so.

“The EDC is downplaying the aspect of cost,” Greenidge said. “The JFK IBZ is a major structure and source for job creation but if they can’t come up with $250,000 for the budget, it won’t happen. They would have to draw that money from the tenants and they have this elaborate formula to do so but the bottom line is: Commercial tenants are going to pay the bulk of it.”

In addition, critics of the BID system say the program indirectly promotes gentrification in these areas. Businesses that can’t afford to pay the required tax would move out of the district and be replaced with bigger box stores. And if the IBZ is repealed from the JFK area, there will be nothing to stop the mega companies from moving in.

There may be a way to pull the two ideas together. The most successful IBZ, the Brooklyn Navy Yard, has provided a model for nonprofit industrial development support that has provided industrial space and resources for companies.

According to de Blasio’s original plan for industrial businesses, the Brooklyn Navy Yard job levels have grown from 3,600 jobs at 230 businesses in 2001 to more than 6,400 jobs at 300 businesses.

They anticipate those numbers doubling in five years.

How exactly de Blasio would take this plan and implement it on a city level is unclear, but for now people like Mesloh are fighting to maintain the IBZs they represent.

“Let’s just say that BIDs are not supposed to replace city services,” she said. “When we started, our budget was about three times what it is now. It’s been cut continuously but we really haven’t changed how we work around here. We’re working hard to get the money reinstated and will continue to assist the businesses in our area as long as we can.”

There is no set date for de Blasio to unveil his economic development plan or his proposal for strengthening the IBZs.

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