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Old 08-09-2008   #3
superbeautiful
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Now city officials, landlords, real estate developers and bankers are said to be lobbying to free up some of that 10 million square feet for higher-paying tenants or buyers. Some singled out Renzo Piano’s skyscraper for The New York Times as one of the buildings that is driving up rental space to $75 per square foot. Last month, the Mary McFadden Building at 240 West 35th Street was sold for $58 million, or nearly $359 per square foot, to Hidrock Realty, which has already leased the 17-story building, including three street-level retail spaces.

Last year, according to the most recent statistics available from the New York State Department of Labor, there were 17,613 manufacturing jobs in the Garment District, compared with 18,158 in 2006. In 2007, there were 59,035 industry jobs in the five boroughs, versus 60,526 in 2006. In the industry’s heyday in 1950, there were 369,000 textiles and manufacturing jobs. FCBID’s executive director Barbara Randall said she doesn’t have an inkling about what the city plans to discuss this week.

“We’re hoping there is some sort of proposal that includes preserving the space required to accommodate today’s fashion industry. Our concern isn’t about zoning changes, we’re just afraid if something doesn’t happen in this administration, it is never going to happen,” she said. “Using zoning as a tool to preserve manufacturing in New York City did not work. We would look for a more meaningful tool that included preserving the space required to support today’s designers.”

Long Island City and Brooklyn, two areas with ample industrial space, are options. Creating clusters of production in either place, or anywhere else in the region that has the room, could be attractive, especially if “corridors of transportation” are set up to expedite the commute, Kolb said. “Irrespective of any designer who wants to keep production in the U.S., I’m sure they’d rather keep production in Long Island City than get on a plane to India,” Kolb said.

Kolb “loved” the idea of conversions credits, which would allow Garment District landlords to make a payment to a trust, a fund or perhaps another agency to opt out of the zoning restrictions regarding manufacturing. Conversely, another option might be to offer subsidies to landlords who commit to apparel manufacturing on a long-term basis. “It’s appropriate that during fashion week, we will be talking about the future and preservation of the Garment District in New York. The irony is that fashion week is all about New York,” Kolb said. “The challenge for me is getting word back from the city about what the active plan is.”

When the theater district was rezoned eight or nine years ago, certain landlords were able to sell unused development rights to allow for broader use — as in skyward, according to Michael Slattery, senior vice president of the New York Real Estate Board. But there, the garment center’s zoning is much more restricted, especially on midblocks, he said.

Restore Clothing co-founder Anthony Lilore rounded up signatures for a petition last year, after suppliers and cutting rooms his company had used for years were displaced. “The landlords nearly tripled the rent when the lease was up. How do you possibly stay in business?” he said. “A lot of the floors were just vacant. Landlords would not renew the lease and let the place stay dormant until they could rent it for significantly more money.”

But the boroughs are not the answer for him. “Let’s face it, kids don’t come to New York City to get involved in the fashion industry, to work in Long Island City. They don’t point to a building in Long Island City and say, ‘That’s where ‘Project Runway’ was.’ It’s right here on Seventh Avenue and 40th Street,” he said. “The beauty of this neighborhood is that it’s such a concentrated supply and labor network that even if Ralph Lauren, Donna Karan and Calvin Klein get some of their samples from Italy, they get here and sometimes still have to be altered. By allowing these people to move to other parts of the city, your support network disappears.”

Stan Herman, the previous CFDA president who was involved with the original zoning laws in the Eighties, and is still at it, said the Garment District’s unpolished image is driving designers to Chelsea or the Meatpacking District. “One of the problems is that many find it’s not a cool place to be,” Herman said. “There should be somebody appointed from the mayor’s office or our own to give a sheen to the center, so that people move back. If you had major designers, young designers and hot designers in tow, you could retain a demi garment district,” and one with a designated venue to preserve manufacturing.

“It’s a money factor,” Herman said. “The height and width of Manhattan is finite. Every time there is gentrification, it kills the original core. The city in itself has to help out. It’s not fair to ask somebody to take $20 a square foot when they could get $80. There have to be certain tax abatements to make this viable.”

The outer boroughs could be a good alternative, said Dennis Basso, whose fur and ready-to-wear factory and design offices are based in a 30,000-square-foot Long Island City space. And the commute there from his Madison Avenue store is faster than the one to his old West 29th Street offices. “On the outskirts of Paris or Milan, this is often a very common scenario, where the offices are outside the city,” he said.

Other designers agree. Costume jeweler Alexis Bittar is one of those companies keeping production in-house, which, until 2002, was located on 38th Street and Eighth Avenue. “My lease was up at that space and they were going to double the rent,” said Bittar of his decision to move to Brooklyn, where he employs 120 people. “I found out about this program called REAP [Relocation and Employment Assistance] that was run by the city and it paid businesses to relocate from Manhattan to different areas, one of which was DUMBO.”

Bittar’s realtor clued him in about REAP. “It gave you an incentive per employee for five years,” said Bittar. “It was great. It was one of the smartest things I’ve done.”

Back in Manhattan, where commercial real estate is at a premium, interest in the Garment District has increased and retail rental rates have shot up to $175 or $200 per square foot — a 20 percent gain compared with last year, said Joanne Podell, a retail broker at Cushman & Wakefield. The area is now known as “Times Square South,” she said, adding that steady foot traffic and robust tourism have helped drive up prices, but only local merchants and service industries have entered the area, not national chains.

The city has tried to spruce up the area with the Broadway Esplanade, a seven-block stretch that includes a bike lane, tables, chairs, benches and planters and runs along the east side of Broadway from 35th to 42nd Streets. The $700 million project required reducing the street’s four traffic lanes to two, and subsequently slowing down traffic. On Friday, Mayor Bloomberg held a press conference touting Broadway Esplanade and other newly christened plazas.

But even as landlords fight to free up space in the district for more offices, the forecast isn’t that rosy. Steven Kaufman, president of the Kaufman Organization, which owns or manages 15 buildings in the Garment District, said office rental rates have been slightly off, due to the general economic malaise. The average going rate is “in the mid-30s,” compared with last year’s average of $36.46 per square foot. Tenants coming off 10-year leases or longer are the ones facing sticker shock, he said. And while residential towers are rising up on side streets west of Eighth Avenue, Kaufman said that is not his firm’s end game.

“We’re not asking for the right to convert into residential properties,” he said. “We’re asking people to recognize the reality that manufacturing has left the city, and the country as a whole. To have a zoning law that mandates renting to manufacturers that don’t exist anymore doesn’t make any sense...showrooms are going to continue. They have actually increased.”

But some argued that it’s the factory workers and sample and pattern makers — many of whom have worked in front of the same sewing machines for decades — who will face the fallout. Craig Hoffman, president of Bill Blass LLC, said, “Bill Blass has a history and legacy tied to the Garment Center. We have people working here who couldn’t possibly be replaced in 100 years. There are people who have been making samples by hand for the company for 32 years,” he said. “You can’t possibly replace them, and there aren’t any young people coming down the pike with those skills.