2015 Crain’s Business Breakfast Forum: Building Strong Neighborhoods and Creating Good Jobs
On November 5, NYCEDC President Maria Torres-Springer shared our strategy for building a dynamic, equitable, and sustainable urban economy at the Crain’s Business Breakfast Forum.
Her remarks, as prepared for delivery, below:
Good morning everyone.
Thank you, Jill, and everyone at Crain’s, for having me today.
And thank you all for joining us this morning. I’m very happy to have this opportunity to speak with so many friends and partners. The work we do at EDC to create good jobs for New Yorkers and grow our city’s economy — that work depends on strong collaboration with so many of you. I’m very excited this morning to share some of the major projects we have in the works, and to talk about some new ideas and commitments that will drive New York City’s next phase of innovation, creative disruption, and continued growth.
For those of you I have not yet had the opportunity to work with, a few words by way of introduction:
I am the first generation daughter of Filipino immigrants to California. I flew to the east coast for college in 1995, having never seen snow, with a single suitcase and $200 in my pocket. I had an opportunity to take a course at Yale called “Study of the City”, and was lucky enough to do a field project in the East Village, which would be my first trip to New York. That project gave me my first glimpse at what it meant to improve not only the physical environment of a city, but the underlying conditions for people and businesses. The experience started me on a path towards economic development as a career.
Through every experience, I have always felt very lucky — -lucky to have opportunities, lucky to have the support of friends, family and colleagues, and lucky to live in a city that gives us access to so much. And I made a very deliberate decision to do everything I could professionally to take luck out of the equation for the hardworking people of this city.
My ultimate goal, in any job I’ve had, has been to create a foundation that allows every New Yorker, regardless of circumstance, to reach even higher and dream bigger.
That’s why I’m so proud to be able to wake up every morning and help implement Mayor de Blasio’s goal of increasing economic opportunity for all New Yorkers. With our growing population — -and we’ve got a record 8.4 million residents — -more people than ever before need affordable homes and career-building jobs in innovative sectors. To create both good jobs and affordable homes, we also need to invest in high-quality, 21st Century infrastructure — things like high speed broadband and reliable transport systems.
Today, thanks to the hard work of my colleagues in the Administration and of New Yorkers like all of you, our economy is strong and growing. The city has an all-time high of 4.2 million jobs, hitting new levels each month. We’ve added 162,000 private sector jobs since Mayor de Blasio took office in January 2014, and average wages increased 4% in 2014 — the first annual increase since 2010 — -with gains in almost every sector.
People and businesses are voting with their feet to come here. More Fortune 500 Companies call New York City home than any other city in the world, and innovative businesses are growing their footprints here — -just last year, IBM opened its 12-story Watson Global Headquarters in Astor Place, hiring upwards of 600 people. We welcomed a record 56.4 million visitors in 2014, and we’re on track to surpass that number this year. We need solid economic fundamentals like these in order to solve the challenge that this administration has put front and center: building a city that is livable and affordable for New Yorkers across the economic spectrum.
There are two ways for city government to approach this challenge. The first is by making sure that our prosperity is shared and that New Yorkers have the foundational supports they need to thrive here. That’s why Mayor de Blasio has expanded high-quality universal pre-kindergarten to 65,000 of our children, implemented the city’s first municipal ID program, expanded Paid Sick Leave to include more than 500,000 New Yorkers, and started aggressively on a path towards building and preserving 200,000 units of affordable housing.
But of course, keeping life affordable is even harder without a good job. As one of my predecessors at EDC would remind us, affordability is a ratio of cost to income. And my job is to create the kinds of opportunities that allow New Yorkers to bolster their households’ economic security, while also expanding our city’s status as a global leader and innovator.
When Mayor de Blasio, Deputy Mayor Alicia Glen and EDC’s Board Chair Michael Schlein asked me to head up the Economic Development Corporation three months ago, they gave me a clear, very simple directive. They said: tell me what’s next.
Since then, my team and I have been hard at work developing an inclusive economic development strategy that is centered on the Mayor’s vision of building a Dynamic, Equitable, and Sustainable urban economy. It’s a strategy that works alongside the market forces that have enabled neighborhood revitalization, but is intentional in addressing the uneven access to opportunity faced by too many New Yorkers.
It’s a strategy that is based on two fundamental goals that will drive everything that EDC does: building strong neighborhoods and creating good jobs.
Let’s talk a bit about what each of these means.
First off, what do we mean by building strong neighborhoods? By capitalizing on the unique potential of every part of the city, we can provide the foundations for success: the right mix of housing, local commercial activity, and basic infrastructure.
At EDC, we’re advancing the kind of area-wide development projects that create new opportunities. In a few weeks, we will break ground on Phase II of the Hunters Point South development in Long Island City. Mayor de Blasio has committed $100 million in City capital to this project, to build the brand new streets, sewers, parks, and utilities needed to support housing and a vibrant mixed-use community that includes commercial and public open space.
When completed, Hunter’s Point South will be the single largest affordable housing development built in New York City since the 1970’s, with over 5,000 units.
We’re also driving comprehensive neighborhood planning projects across the city. That includes taking the first steps towards building an entirely new neighborhood atop a 200 acre railyard in Sunnyside, Queens. Sunnyside Yards could one day be home to thousands of units of housing, commercial and retail space, schools and parks. These are the types of projects that help us keep pace with the evolving needs of our city, ensuring that future generations of New Yorkers have the space they need to live, work, play and raise a family.
EDC is undertaking similar area-wide planning efforts throughout the City, in close collaboration with community members. In the South Bronx, we’re asking the community to share their most pressing infrastructure and business needs for a major upgrade of the neighborhood’s physical assets.
In Inwood, we’re holding a series of neighborhood meetings to shape development priorities that support growth and reconnect the people of upper Manhattan to their waterfront.
In Jamaica, Queens, we launched a 6 month community engagement process to develop a cross-cutting Jamaica Action Plan. The Plan covers issues like housing, commercial growth, and infrastructure development and is currently being implemented.
We’re also delivering on promises for other growing commercial hubs like Staten Island’s North Shore, completing the development of the New York Wheel, along with new retail and affordable housing at Stapleton. In Coney Island, we’re investing nearly $180 million in modern infrastructure and new homes.
To make sure that every community has the foundation it needs to facilitate growth, the Mayor has created a first-of-its kind Neighborhood Development Fund. The fund will leverage over $1 billion in City capital to deliver open space, community centers, and other neighborhood amenities that communities will need. As we create new housing and add people to neighborhoods, the funding is already in place to make sure that the supportive infrastructure that’s needed will be built.
We also know that quality public transit is key to unlocking the full potential of any neighborhood.
That’s why EDC is launching a Citywide Ferry Service.
Starting in 2017, New Yorkers from Sunset Park, Astoria, Roosevelt Island, and other neighborhoods that are currently underserved by public transit, will be able to travel by water to 21 destinations across the city, all for the same price as a subway ride.
Just think about what that means: a New Yorker can live in Soundview or the Rockaways, where rents remain relatively affordable but transit access is tough, and commute directly to a job in Manhattan, Long Island City, or Sunset Park. And entrepreneurs will have better access to the talent and customers they need to take their businesses to the next level.
This brings me to the other half of our mission at EDC — catalyzing the creation of good jobs in our city. We think of this work in three ways:
- First — providing the foundation that growing companies need to thrive in New York — things like affordable workspace, high speed broadband, and ready access to capital.
- Second — investing in the specific sectors that have the greatest potential to grow the jobs of tomorrow, but may need the City’s support to nudge the private market.
- Third — ensuring that New Yorkers from all backgrounds have access to economic opportunity. This last point includes our work to ensure that Minority and Women-Owned businesses are able to compete for, win, and perform on City contracting opportunities, as well as the Mayor’s recent expansion of the HireNYC program, which ensures that City services and development projects come with local job opportunities.
But today, I want to focus on one particular aspect of our work.
Talk to business leaders in almost any sector of our economy, and they’ll tell you that both new and established companies are having a hard time finding high quality space that fits their needs, at a price they can afford.
So I want to spend my time today on our strategy for generating more space that is both flexible and accessible to businesses across a number of sectors of New York’s growing economy.
Commercial Office Space
Let’s start with commercial office space.
High-rise offices define Manhattan’s iconic skyline, and new developments are adding to that profile every year. But even as our supply has increased, demand for commercial space of all types continues to grow even more rapidly.
While traditional office users have grown steadily, the real explosion is with tech and other emerging industries. These sectors are looking for new types of space — -not your traditional buildings with the coveted corner office, but creative, flexible, and wired spaces that encourage interaction. It’s a profile that aligns with the characteristics of older office buildings in New York City — -one of the reasons Silicon Alley businesses first set up shop where they did. Today, buoyed by the growth of our 300,000-person tech ecosystem, Silicon Alley has become more of a canyon, extending southward to Union Square and across the river to downtown Brooklyn and Long Island City.
So now, even our supply of older office space is running short.
Today, I’m here to announce the results of a new EDC analysis that shows market demand for new commercial space could reach as high as 60 million square feet over the next ten years.
We will use every tool at our disposal to meet that demand: working with the private sector, leveraging city owned assets, investing city capital, and working with our colleagues at other agencies to make sure that commercial space is being considered in new developments. If we work successfully with the private sector, this would be the largest and most rapid pace of office space development New York has seen in almost two generations.
It will take comprehensive neighborhood planning — -like work with our City partners to bring state-of-the-art, high rise commercial buildings to the 73-block area around Grand Central Station, through the East Midtown rezoning. Along with the new neighborhood at Hudson Yards and oncoming office space at the World Trade Center, these types of area-wide projects in Manhattan alone can generate over 20 million square feet of space.
But it will also take a steady stream of more targeted projects, looking at every possible building or parcel with an eye to its commercial potential.
With that in mind, I’m also happy to announce that today we are issuing an RFP for a new commercial development at 124 East 14th Street in Manhattan.
The current site of the PC Richard store will serve as a new tech hub in Union Square, capitalizing on the academic and transit advantages offered by the neighborhood and its proximity to the Flatiron District. Recognizing the specific needs of the tech community, this development will include a focus on providing step-out space for growing companies. The opportunity to completely redevelop a 15,000 square foot lot, with the capacity for more than 80,000 buildable square feet, is just one example of EDC finding creative uses for the assets we have in a city where space is harder and harder to come by.
We’re also working to fortify emerging business districts throughout the outer boroughs, which we anticipate can handle about 25 million square feet of this growth. In transit hubs like downtown Jamaica, Queens, Lower Concourse in the Bronx, and Staten Island’s north shore, we are exploring the viability of additional commercial development. And areas like Downtown Brooklyn, where we see low vacancies fueled by a tremendous tech boom, and western Queens, where companies are anticipating the Cornell-Tech Applied Sciences campus at Roosevelt Island, provide even more space for commercial expansion.
We know that new commercial corridors need fast and reliable broadband connectivity in order to support innovation. A few months ago, we launched our Connect IBZ program, a $5.3 million public-private partnership to develop high-speed internet in areas that have been digital deserts. We’ll be using that program as a model as we work to make sure commercial office space around the City has the 21st century infrastructure it needs.
Life Sciences & Biotechnology
This brings me to the second component of our growth strategy. Many of the most dynamic sectors of the new economy have specialized needs when it comes to real estate. Among the most exciting of these sectors is bio-technology, which is quickly becoming one of the driving forces of the city’s 21st century economy.
Let me share just one success story out of this sector: three years ago, EDC’s Entrepreneurship-Lab program — -a sort of mini-MBA for bio-tech companies — -graduated Joe Landolina, the then 19-year old co-founder of a company called Suneris. Joe’s company developed VETIGEL, a plant-based ointment that stops severe bleeding in less than twelve seconds. With an ability to seal wounds almost instantly, Brooklyn-made VETIGEL is poised to revolutionize emergency trauma care, whether through EMT response, for burn treatment, in war zones, in high-intensity surgeries, or even for basic scrapes and cuts.
To invent and bring to market these kinds of ground-breaking products, biotech innovators like Joe need three things: access to talent, funding, and space.
We’ve got a strong foundation from which to build.
New York is home to 9 world-class academic medical centers that receive some of the country’s highest levels of NIH funding.
To build on this solid base, we worked with Memorial Sloan Kettering and CUNY-Hunter to create a $1.2 billion cancer treatment center and training lab on East 74th Street. Just north of that in East Harlem, we will soon break ground on the New York Proton Center — the first of its kind in New York State — which will use targeted radiation to kill cancer cells without harming neighboring tissue. New York City is also home to leading pharmaceutical companies — -like Bristol-Meyers Squibb and Pfizer — -and we have one of the country’s largest healthcare systems.
All of this positions New York City to build a top-tier innovation ecosystem for biotech.
Between 2009 and 2013, life sciences employment in New York City grew 15%, to a total of 14,000 jobs. That number could have been much higher. But for years, discoveries made in New York City institutions would be taken to Boston, to Raleigh, to San Diego to be commercialized and produced.
We struggled to retain these new companies because of a dearth of two things: early stage capital and the wet lab space needed for advanced research and product development. Right now we’re laser-focused on addressing those obstacles.
To close the capital gap, we recently announced our new Early-Stage Life Sciences Funding Initiative. The fund began with a $10 million EDC investment, and has been able to leverage another $140 million in venture capital and other private funding, for a total of 150 million dollars. Our Fund will help seed dozens of new and transformative biotech companies while strengthening and diversifying our city’s economy.
But as more companies access the capital they need to stay in the city, they’ll be looking for a steady supply of wet laboratory space close to the research institutions where they were founded.
Based on our analysis of sector trends, we project that there will be market demand for as much as 3 million square feet of new life sciences space by the year 2025.
This is nearly triple the current amount of this specialized space, and it presents a tremendous opportunity for new development and investment by the private and public sectors.
Once again, EDC is committed to using every tool at our disposal to meet this demand — including leveraging City assets and capital. We’ll continue to focus our efforts along what we are calling Manhattan’s East River Life Sciences Corridor.
As a major next step, we’re looking at expanding the Alexandria Center for Life Science, which at full build-out, will provide nearly a million square feet of wet lab space, and already hosts leading companies like Roche, Cellectis , and Kadmon. We believe there is potential for hundreds of thousands of square feet of additional space there, and the City is committed to making this happen.
We will also renovate the City’s Public Health Laboratory at 455 First Avenue to generate 100,000 square feet of private wet lab space. The Lab helps the City confront major public health challenges like biochemical threats and infectious diseases. Not only will this renovation create space for new jobs, the value generated from the private space will offset building renovation costs, helping to deliver a new public health laboratory at lower cost to taxpayers.
And through our Build NYC Corporation, we’re also helping the New York Stem Cell Foundation finance a brand new headquarters in midtown.
The Foundation uses the latest stem cell research technology to provide clinical treatments to neurodegenerative diseases like Lou Gehrig’s disease. Their Global Stem Cell Array is a robotic technology that turns skin or blood samples into heart, liver, or brain cells. It allows researchers to see how different people respond to new drugs — -sort of a “clinical trial in a dish.” The Foundation has been a lynch pin for the life sciences sector, and we’re extremely excited to help them continue to grow here in New York.
The three sites I’ve mentioned would contribute roughly 750,000 square feet of new biotech real estate to our city, bringing us a quarter of the way towards meeting that 3 million square feet of projected demand. We’ll be talking about even more exciting projects in this sector over the months ahead.
As you can see, biotech isn’t just about creating the next revolution in cancer care in New York; as an industry, it’s also a competitive advantage for New York’s economy. It’s the role of government to help catalyze the most promising new sectors that haven’t yet reached scale. That’s what we did at Alexandria, and it’s what we’re doing with our Life Sciences funding initiative. Now that we’ve demonstrated that constructing new life sciences space is not only financially viable, but that demand continues to outpace supply, we expect the private sector to up its investment. So I’m looking forward to working with many of our city’s leaders in the finance and development communities to see how we can best work together to meet the needs of this booming sector.
Industrial and Manufacturing
The story of biotech in New York is certainly instructive. Whatever the sector, innovation in both product and process needs an entire ecosystem to really thrive. That’s why the industrial and manufacturing sectors are critical.
Industrial and manufacturing don’t just help to grow and sustain New York City’s middle class. They also close the loop on innovation, ensuring that we can improve production processes; that we can create real, practical products; and that we can obtain and transport the resources we need to function as a city. And we are poised to become the go-to destination for advanced manufacturing.
Just two days ago, I stood beside the Mayor to announce a bold new Industrial Action Plan for our city, outlining ways we will protect and grow industrial spaces that allow New Yorkers to make, move, and mend things.
Our announcement included a $150 million industrial fund to jumpstart industrial real estate development and better support growing manufacturing firms.
Industrial sites exist citywide. From an emerging green tech industry on Staten Island’s west shore, anchored by a global logistics network, to a rapidly growing food manufacturing cluster at the Hunts Point Food Market, and a swath of specialized industrial spaces between northern Brooklyn and western Queens, we already have much of the infrastructure needed for a diverse and modern manufacturing sector.
All of these components — -production, innovation, infrastructure, talent, and space — -come together in a complete ecosystem in Sunset Park, Brooklyn.
The area’s system of industrial properties includes the 11 buildings at the Bush Terminal Industrial Campus, where even today, more than 600 people come to work at 65 different industrial businesses.
To the north is the SIMS recycling facility, powered partly by a wind turbine, that processes the plastic, metal, and glass collected by the Department of Sanitation — -functions that are vital to the upkeep of the whole City.
And we recently constructed Bush Terminal Park, a much-needed waterfront open space that’s open to the community for recreation and leisure. Sunset Park already links closely to the BQE and the subway system. And in the coming years, the neighborhood will connect to the rest of the City’s waterfront through the Citywide Ferry Service.
But two important institutions in Sunset Park are the focus of my announcements today: the EDC-managed South Brooklyn Marine Terminal and Brooklyn Army Terminal.
The South Brooklyn Marine Terminal, or SBMT, is a 72-acre marine industrial facility with berthing space for cargo ships and barges. SBMT is the only maritime site in all of Brooklyn, Queens, and Long Island with direct rail access, giving it the potential to open up large markets for New York’s producers and reinvigorate southern Brooklyn’s transportation networks.
By the end of this year, we will be releasing an RFP for maritime-dependent businesses at the Marine Terminal, which will allow us to bring this important piece of the Sunset Park industrial ecosystem online by the end of 2016.
By bringing this vital asset back into operation, waterborne shipping and logistics capabilities can reconnect Brooklyn to the rest of the country, handling the transport needs of the borough, the City, and the whole region over the next decades. An active SBMT will take trucks off City streets, and slash transport costs for construction, wholesalers, and manufacturers anywhere east of the Hudson.
I also want to talk about an exciting new project at the Brooklyn Army Terminal, which is really the crown jewel of our industrial assets in Sunset Park. BAT is an industrial campus that’s currently home to 3,700 jobs in areas like circuit board, furniture, food and jewelry manufacturing. There are even people at BAT developing advanced products for NASA. Our Administration has already invested over $100 million to transform 500,000 square feet of unoccupied space in BAT into quality, affordable industrial space, which is expected to create an additional 1,000 quality jobs.
I am very excited to announce today that BAT will also be home to our city’s next great hub for advanced manufacturing.
EDC has been renovating 55,000 square feet of prime waterfront industrial space at the BAT Annex building, and I’m happy to share for the first time that this brand new space will be dedicated to advanced manufacturing and related uses.
The new Annex Building will be complete and available for lease-up starting in January of next year, offering thousands of square feet of space to some of our city’s most exciting and creative new firms. The new Annex Building will be a home for manufacturers, technology developers, entrepreneurs, industrial artists, and non-profits with a shared passion for learning, teaching, inventing, and making things.
As an anchor for the new facility, we will be investing up to $10 million in an Advanced Manufacturing Center featuring shared workspace and equipment. The Center will provide both traditional and advanced manufacturers with cutting-edge equipment, and R&D and prototyping space to drive innovation across industries — -while strengthening their connections to a talented community of Sunset Park residents, workers, and businesses.
The new Annex Building will be a microcosm of the dynamic, resilient, inclusive, and diverse economy we’re seeking to develop citywide.
Working closely with residents and business leaders, these two projects at SBMT and BAT will bring us another step closer towards an even stronger Sunset Park — -one that leverages the community’s rich diversity of talents, affordable places to live, growing transit access, and job-intensive industrial heritage.
The Sunset Park of tomorrow will be a thriving community where advanced manufacturing technologies integrate with tested production techniques; where local workers in industrial complexes are trained for the jobs of today and tomorrow; and where a pioneering manufacturer can step on a ferry or walk home to her family.
We can achieve this vision together, by building on the strengths we already see in this great neighborhood.
And that is how we will continue to grow all areas of our city. By working collaboratively with communities, and with all of you — the business leaders, builders, and investors that help drive our economy forward. We know we can’t do it alone.
Even as we move forward on spurring 60 million sq feet of new commercial office space over the next 10 years, as we catalyze the development of 3 million sq feet of life sciences R&D space by 2025, and as we tap the full potential of our industrial assets at Sunset Park to strengthen our production economy, we know it will take more than a commitment to new space.
It will take smart use of development incentives to ensure that we’re attracting and retaining the right kinds of jobs in the right kinds of sectors. It will take continued investment in both traditional infrastructure, including new out-of-the-box methods for connecting major nodes in the outer boroughs, as well as 21st century infrastructure like high-speed broadband networks. It will take an economy with an even more skilled workforce; one that provides businesses with the talent they need to grow and connects New Yorkers of every background with opportunity.
To move towards our vision of one, inclusive, and growing New York, we need solid economic fundamentals. All of us in this room share that belief. We cannot provide New Yorkers with access to quality, well-paying jobs unless we continue to grow jobs in every corner of every borough. We cannot have inclusive development without development; we cannot have equitable growth without growth. My experiences working for the people and businesses of New York have taught me that, in the vast breadth of our backgrounds and experiences, our hopes are shared.
New York City is an inclusive, diverse and dynamic place. That’s exactly what drew me to the five boroughs, and it’s what keeps me here. But the one constant, from the very get-go, is that New York is the city where the next big thing happens.
So working together, let’s continue to build a city that all New Yorkers can count on, a place that nurtures all of our potential, and that allows each and every one of us to reach just a little higher; a place that takes luck out of the equation.