Relocation advantages in the greater boroughs.
Queens and Brooklyn are unique geographic centers richly fed by sophisticated transportation systems (advancing, as in the JFK monorail and the potential intermodel connecting JFK and LaGuardia Airports to Manhattan), and the new "Q" subway train line connecting Long Island City to Roosevelt Island and East 63rd Street in Manhattan. With pending zoning legislation to expand the allowable use of industrial buildings to retail use, retailers are vying for accessible, high visibility locations.
Advantages of relocating to the boroughs include access to customers and markets, cost per square foot, availability of suppliers, quality of workforce, and accessibility of labor to work site. Also seen as a lure to attract and retain companies to the boroughs are the incentive packages offered through the City of New York economic development programs, which recently introduced major changes such as the "straight lease program," with a recognition for the need on the part of our municipality to compete with our tri-state neighboring jurisdictions.
In Queens, a typically over-developed borough, retail-to-industrial conversion sites are limited and do not come cheaply. For example, with the opening of the new Home Depot in Flushing, Queens, unimproved land in and around this retail anchor has jumped from a former value in 1994 of approximately $18 to $25 per square foot to a staggering asking price of $90 per square foot, with multiple offers on the table for seller consideration and review.
When the 50-story Citicorp Tower on Jackson Avenue in Long Island City was erected some five years ago, it inspired a frenzy of inflated property values as a new world appeared before the eyes of local landlords, who raised the asking prices of their properties as expectations of future development projects reigned. Sadly, the subsequent years have illustrated dashed hopes of ever meeting these price expectations, as insufficient street traffic prevented the enthusiastic lure of retailers to the Jackson Avenue corridor.
On the horizon, however, slated for Spring 1996, the first of seventeen 40-story commercial/residential towers beaconing the "Emerald City" of the Queens West waterfront development project in Long Island City will have it's long-awaited ground-breaking, already inviting a flurry of investment and development interest in this area once again. Unlike the Citicorp project, however, in this particular development spur, the backbones of a full-scale development project replete with community input and participation have taken place, opening doors to draw retailers, investors and new residents to Long Island City with unprecedented variety and intensity. The spinoff to retail and support services will naturally follow.
Already, we have seen industrial sections of Queens undergo a renaissance. The Sports Authority in Long Island City, which recently had its grand opening in the location of a vacant auto dealership, opened next door to the former Ronzoni plant. The Ronzoni plant itself is scheduled for a make-over to a 125,000 square foot K-Mart store directly on Northern Boulevard, opening across the street from the new Tops Appliance retail store, housed in the former Associated Retailers Building warehouse, which is now re-suited as a high-visibility retail showroom. Forest City Ratner Companies have announced plans to ground lease the 200,000 square foot Gallo Wine site in this corridor, with 75 percent of the space already pre-leased to major retailers.
Brooklyn, a still as of yet under-developed borough, also offers a wide array of unimproved land and large industrial sites centered in and around critical mass population density for true development potential value. For example, in November 1995 in Greenpoint, Brooklyn, a site formerly used as a Mobil Oil Terminal became home to The Samuel Feldman Lumber Company, which took occupancy in a 175,000 square-foot industrial-to-retail conversion as a competitor to The Home Depot. One only has to look at the map of New York City and its boroughs to see the spectacular advantages to basing operations in these geographic areas, situated only minutes from the Brooklyn Battery Tunnel, Manhattan, Brooklyn, and Williamsburg Bridges, and the Queens Midtown Tunnel, which can be reached in seconds from Greenpoint, Brooklyn's northernmost community, bordering Long Island City, Queens.
Credit for the economic success of borough real estate is given to the fact that property is well-priced, allowing for entrepreneurial risk-taking in response to "niches within industries that feed the distinct and rapidly changing appetites of New Yorkers," (New York Times, 9/4/95). Companies facing typically-cited aggravations of life in New York City argue that they nonetheless need the market access, suppliers and customers, with which no fax machine or online program can compete or replace. A recent cover story in The New York Times touted Long Island City as a particularly prosperous industrial and commercial business community, organized in large part through a business membership organization known as the Long Island City Business Development Corporation, whose business members form its Board of Directors in a voluntary capacity.
Such local development corporations, scattered throughout Queens, Brooklyn and The Bronx, and often funded with City and State funds, collectively represent a tremendous boom to the fostering of an economic success story in the boroughs.
Also cited as evidence of unique value in a city often cited for its labor problems is the vast supply of skilled employment available for work in the trades, such as printing, painting, metal trades, sewing and graphics work. In August 1994, The New York Times ran another rather propitious cover story discussing the improving outlook for industry in New York, citing three factors as its cause: the shift away from large scale mass-production inviting specialized smaller industries to succeed; the drive on the part of small business to respond quickly to consumer trend-oriented tastes; and the collapse of a 1980's run-away real estate market that has limited the conversion of industrial buildings and thus expanded the opportunities available in industrial buildings which might otherwise remain vacant.
Marjorie D. Seaman, a resident of Manhattan, is President of Seaman Realty & Management Co., Inc. in Long Island City, Queens and was formerly an Aide in the Koch Administration administering economic development programs to attract and retain industry in the boroughs.
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|Title Annotation:||Annual Review and Forecast; New York, New York|
|Author:||Seaman, Marjorie D.|
|Publication:||Real Estate Weekly|
|Date:||Jan 31, 1996|
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