Outer borough growth fueled by small deals.

City One Real Estate's principals say: "The bigger deals may get noticed, but it's the smaller deals which are providing the real 'fuel' for City's economic development."

With scores of industrial and corporate back office operations being priced out of Lower Manhattan to less expensive, redeveloped properties throughout the tri-state area, real estate professionals are beginning to mention Long Island City, Queens as the "fourth" potential "downtown" now developing in New York City, after Midtown and Downtown Manhattan, and Downtown Brooklyn.

Other commercial real estate professionals say that area's successful development won't happen without the government stepping in to improve zoning restrictions and encourage the assemblage of new, large tracts.

To Avi Feinberg and Rob Morel, cofounders of City One Real Estate of Brooklyn, it's just business as usual.

"Fifty-three percent of the workforce in this country is employed by small business classified as companies with 500 or fewer employees. 'Very small businesses,' according to the U.S. government, are those with less than 20 employees. And this sector was responsible for two-thirds of the jobs growth nationwide during the first six years of this decade," quoted Avi Feinberg, reading from a copy of a Small Business Administration report, sitting on his desk. "Businesses from one to 500 employees are City One's market."

Feinberg's partner, Rob Morel, continued "Collectively, we've done more than 100 lease, purchase and economic development package deals since the recession ended in 1992. A good percentage of these were in Long Island City." When talking of "package" deals, he was referring to his firm's specialization in putting together a mix of governmental incentives, such as relocation grants, tax abatements and 30 percent electricity discounts, and combining those savings with below market-rate, small business financing to see their firm's clients through to a successful deal.

Feinberg continued, "When a 'big-box' retailer moves into an area, or a larger conversion of existing stock is concluded, that makes headlines. But we're facilitating a heck of a lot of incremental growth this way, albeit much more quietly. According to government figures, this is what's at the heart of economic growth everywhere."

"Individually, the deals which we've concluded throughout the outer boroughs may not make headlines, but collectively they've facilitated keeping thousands o f jobs here," Feinberg said. "And, due to the expansion of most of the firms involved, these deals have allowed the development of hundreds of new jobs, too, not to mention the increased concurrent benefits which go hand-in-hand with this growth."

"But this isn't going on just in Long Island City," said Feinberg. "Due to escalating rents in Manhattan, it's happening throughout the outer boroughs now. The sizzling economy is causing many small businesses to burst at the seams. These successful firms are looking for reasonably-priced opportunities for expansion. That's where City One comes in. We provide the whole package from finding the right property, to ferreting out the best possible financing, to navigating through state, municipal and private sector incentive programs."

"We've done no less than 100 deals throughout Queens and Brooklyn in the past eight years," Feinberg said. "And each one of these relocation deals substantiates the reality that businesses are coming to these boroughs to save a buck on their space. When a small businessman is faced with a choice between relocating to New Jersey or here, we have to compete effectively, and we are."

Citing City One's recent experience relocating client Eva Tees, a Lower Manhattan sportswear distributor, as an example, Feinberg said "The Neuhoffs (the name of the family which owns and operates the business) came to us and said, 'Look, we want to grow our business in the City, but Manhattan's just too expensive. What do we do?'"

Feinberg and Morel closed a deal for Eva Tees early last year, moving the firm to a 25-year-old, 75,000 square-foot, bank owned property at 48-40 34th Street in Long Island City. As a result of the move, Eva Tees executives plan to follow through with their projected growth plan, which includes tripling its gross annual income and increasing staff by over 40 percent in the next three years.

City One worked with the Neuhoffs to develop a 90 percent fixed-rate financing package to facilitate the transaction. Morel also arranged for Industrial Development Authority (IDA) Straight Lease Program benefits for their client.

"Given the ability to navigate through the available financing programs and incentive packages that are out there, a successful small business owner can use a firm such as ours to realize what we already know - the City's outer boroughs are quite competitive. Even enticing," said Feinberg.

Even with their list of recently concluded deals in neighborhoods which are attracting headlines for their increased development activity, such as Long Island City, the partners feel that there are many other neighborhoods in the outer boroughs which are beginning to attract notice.

"Take East New York, Brooklyn, for example," said Morel. "We're seeing a lot of activity there. This is not exactly considered the Upper East Side of Manhattan. But given commercial demand, it is evolving. Space is needed. Driven by cost efficiencies and geography, properties and their neighborhoods get revitalized."

Among the numerous recent deals Feinberg has completed in East New York, he cited DXB Video's move to a 90,000 square-foot property in that community. "This company's employment has quadrupled to over 200 employees since their move two years ago."

Last month, City One concluded financing of a 47,000 square-foot building at 800 Snedeker Avenue to Vinyl Pack, Inc., a manufacturer of heat-sealed vinyl bags and promotional materials, allowing them to expand from Sunset Park, Brooklyn to East New York, Brooklyn.

Also in February in East New York, Morel helped furniture manufacturer Renaissance Woodworking, Inc. obtain a $485,000 Small Business Administration loan to purchase two adjacent properties: a 15,000 square-foot building at 2490 Atlantic Avenue, and a 13,000 square-foot edifice at 21 Snedeker Avenue.

In addition to developing the deal and assisting Renaissance by helping them navigate through the SBA loan process, City One also steered Renaissance through New York City property tax abatement and Con Edison energy cost savings programs.

Underscoring Morel's efforts, Renaissance President Gaspar Di Stefano said, "They really paid attention to my needs as a small businessman. I'm very happy with the efficient way they solved my problems. City One had the answers when it came to working with the Small Business Administration, getting through the City's tax abatement hierarchy and taking advantage of Con Edison's electric cost savings program."

"There's an incredible amount of opportunity out there for the small businessman if they know where to go and what to do," Morel said. "Our job is to show them the way. The smaller businesses' options are fewer. Maybe they must stay in New York City due to the idiosyncracies of their small, trade-oriented staff. Or, in some cases, the concept of moving to New Jersey is tantamount to closing down the shop. Or maybe they're afraid of losing their perceived competitive edge of just being in the City. Sometimes the option of moving out of the City just doesn't even enter into the decision process. Usually, the small business owner doesn't have the trained staff or the deeper pockets to navigate through the maze of incentive programs and financing alternatives available to them here in New York."

"For the small businessman to seek out incentive options in New Jersey or anywhere else becomes a non-issue, because they don't have the resources," Morel added. "We're here to help them. And they're providing the backbone for growth in these boroughs."