Working to revive manufacturing in US financial capital
| Brooklyn, N.Y.
For some time, the conventional wisdom has been that New York City was destined to become a service, financial, and real estate economy. The once-proud manufacturing base that produced clothing, books, processed food, and electroplated goods was composed of waning industries.
The city lost almost a quarter of its manufacturing jobs during the 1970s. While behemoth financial firms sank their anchors ever more firmly into Manhattan, some observers complained that city government neglected the still-important manufacturing sector.
''At one time this area (East Williamsburg in Brooklyn) was so successful that you couldn't get a spot,'' says Martin Greenfield, a wholesale clothier who is president of the East Williamsburg Valley Industrial Development Corporation. ''You had to acquire other firms and pay them to go out of business to get space.''
Then the community had a ''bad spell,'' says Mr. Greenfield. Crime increased. Fires became common. Many companies left or went out of business.
Now businessmen and businesswomen, city officials, and community activists are rebutting the argument that New York should dismiss its manufacturing. In Brooklyn, for example, there are three local industrial development corporations that serve as advocates for the business community. These groups, often started by local employers searching for ways to turn their neighborhood around, do everything from acting as liaison to city government to helping a firm get a bank loan to setting up a local security patrol.
The reasons for reviving manufacturing are straightforward. Though New York City gained 142,000 jobs from 1977 through 1982, residential employment dropped nearly 3 percent, according to a report by the Setting Municipal Priorities Project. Those jobs often go to commuters. And according to a study by Interface , a public policy research group, the city loses $1,177 in revenues for each manufacturing job that disappears.
Jed Marcus, executive vice-president of the Public Development Corporation of New York City (PDC), says that before 1978, the city didn't really have an industrial development policy.
The city ''would try to catch businesses as they'd go through the Holland Tunnel (to New Jersey),'' he says. In 1979, an industrial strategy group was formed by the administration of Mayor Edward I. Koch.
''The consensus was that probably New York was not a bad place for manufacturing,'' says Mr. Marcus. But there were acute problems. Competition from operations in the Sunbelt and overseas, skyrocketing real estate costs in Manhattan, and rising energy rates hit small manufacturers hard. Add to that the frustration of high crime rates, poor services such as garbage collection and road repairs, and the lure of cheaper, safer havens in New Jersey, suburban New York, and Connecticut.
No one expects that New York City will ever regain the 100,000 jobs lost since 1977, but manufacturing employment showed a small increase in the past year, according to the Bureau of Labor Statistics. The stabilization may signal a leaner, stronger base that will continue to provide jobs and benefit the local economy.
Though there are similar groups throughout the city, Brooklyn has three of the most ''mature'' industrial development corporations, say observers. And the three represent a wide spectrum of problems.
In Sunset Park, which stretches along Brooklyn's waterfront, a lot of industry is already in place. Formerly a bustling port area, Sunset Park has become more dependent on manufacturing. Southwest Brooklyn Industrial Development Corporation (SWBIDC) focuses on helping the community with financing and with job-training and job-development programs.
''A lot of businesses in the area would like to expand,'' says Dominick Massa , chairman of SWBIDC and owner of New York Piggyback Services Inc. ''We show them how. If they are refused a bank loan, we help push it. . . . In essence, it means more jobs.''
In East Williamsburg there have been more problems with a deteriorating neighborhood, although there are several hundred businesses in place. One vacant lot had been used as a dumping ground for several years. When it was finally cleaned up, says Michael Rochford, director of the local development corporation , there were 150 truckloads of garbage and 1,000 old tires.
''The dumping was detrimental,'' says Mr. Rochford. ''It was difficult to get businesses to expand or to stay here, because of the neglect the city had for the area.''
East New York was by far the most devastated area tackled by the three development corporations in Brooklyn. In fact, the area did not particularly fit into the mold that the PDC had in mind when it began designating in-place industrial parks. But it had a dedicated group of businessmen who convinced the city that it was worth the effort, says Jed Marcus of the PDC.
''It was an example of real urban blight,'' Marcus says. ''There were 100 abandoned buildings. Companies were under siege.''
The development corporations are an odd alliance of businessmen with savvy and pluck and liberal community activists who understand the link between problems such as inadequate housing and the local economy.
And they claim this alliance has met with success. In East Williamsburg, more than a dozen business have bought city-owned land, and have been helped in arranging loan packages. SWBIDC has placed 250 workers in jobs, and is currently training ambulance drivers for a local firm. East New York's accomplishments have been considered dramatic by some.
''Since we began (five years ago), we've gotten 14 new businesses,'' says Rick Recny, director of the Local Development Corporation of East New York. ''There is no more available space to rent. But there is lots of land.'' Mr. Recny estimates that his program will add 2,500 to 3,000 jobs to the community.
''If a couple thousand people begin working that weren't working before, they are grabbing breakfast or lunch locally,'' says David Gallagher of Interface. ''If there are jobs (here), it's a more attractive place to live.''