Urban Manufacturing Q&A: Miquela Craytor, New York City Economic Development Corporation

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In the fall of 2013, New York City Economic Development Corporation (NYCEDC)’s Industrial Desk team, led by VP for Industrial Initiatives and Income Mobility Miquela Craytor, released the State of Local Manufacturing report under the banner of NYCEDC’s NYCrafted program. The report provides a detailed but accessible snapshot of what the sector looks like today: from the average makeup of manufacturing businesses that are choosing to make things in the city today, to which areas of the sector that are growing, to how New York stacks up against other major cities across the country. The following is an edited transcript of a conversation between Craytor and OHNY, and is part of an ongoing series of Q&As with experts on urban manufacturing that augments OHNY and NYCEDC’s’s Making it Here series.

Looking at the State of Local Manufacturing, it seems like, after a long period of decline, the city’s manufacturing sector is actually starting to stabilize; some sectors are even starting to grow again. What areas of this sector, specifically, are growing right now, and what does the success of those subsectors tell us about how manufacturing in the city is changing?

Food and beverage manufacturing is the bright shining star right now, and there are a couple of potential reasons for that growth. Part of it is the rising interest in food security, part is the interest in eating food that is locally grown or produced. You see this in the growth of farmers markets, and markets in general. Markets have definitely contributed to that sub-sector of manufacturers finding a really strong foothold here in New York City. A place this dynamic and large has a very opinionated customer base, so there’s naturally a larger set of people demanding that kind of smaller niche product.

Another interesting piece of data that we came across is that, across the manufacturing sector, there are fewer employees, but there are more firms. [This is enabled by larger trends in] technology and design: with the growing accessibility of design tools, open source resources, and online marketplaces like Etsy, businesses are able to rapidly get their products to market without some of the barriers that have traditionally made it more difficult for newer companies to break into the marketplace. The city also has a really great talent pool of designers and design appreciators. That doesn’t necessarily apply to one cluster or sub-sector, but you see a lot of new niche manufacturers emerging now as a result of that base.

There are also a lot of older firms that have adopted new forms of technology in order to survive. That is often overlooked or understated, and has happened more frequently than the average New Yorker, to the extent that they think about this stuff, might have necessarily realized. You might think that if a company has been around for fifty years they’re probably antiquated or old-school. Sometimes that’s the case, but more often than not, legacy manufacturers have had to adopt some sort of new technologies, whether it’s managing their inventories and implementing more just-in-time manufacturing processes, or becoming more efficient in the materials they’re using. This is not necessarily a new trend, but it’s a piece of the puzzle that we became familiar with as we worked on this report.

"Food and beverage manufacturing is the bright shining star right now." / Photo: Daniella Shin

“Food and beverage manufacturing is the bright shining star right now.” (Photo: Daniella Shin)

How is all of this impacting the physical spaces that manufacturers occupy, both in terms of the buildings that they’re in and the neighborhoods where manufacturing is taking place?

Manufacturing companies, as they become more efficient and adopt new technologies, are able to reduce their environmental impact. In a very densely populated place like New York City, that makes it possible for these businesses to coexist with other uses in a way that doesn’t create as many conflicts as it may have eighty plus years ago. So the increases in efficiency in manufacturing are not just about the overall operational efficiency of a given company, they can reduce that company’s environmental impact, so that it can be seen as a better neighbor, and a source of less conflict [within a mixed-use area].

One continued challenge is less about what happens inside your facility and more about how you get your products out to market. Manufacturers are more willing to go to upper stories than they once were, but for any industrial business that’s trying to move goods around this city, our streets are already packed; trucks have a difficult time navigating here, and they’re not necessarily ideal when you consider things like the city’s attempts to encourage biking and the greening of space. We’re not going to be able to build a bunch of new streets, so that’s an ongoing challenge that the city needs to think more thoughtfully about.

As manufacturers become more attracted to different types of vertical mixed-use spaces, and digital platforms—you mentioned Etsy—make it easier for more small, niche firms to enter the market, is it fair to say that urban manufacturing is actually getting more diffuse?

In terms of the trend where we’re seeing more of these innovative start-up companies, New York City is a very attractive place for them largely because of the talent pool that is here, but also the supply of buildings that have that sort of creative essence that these types of groups want to be in. A lot of these firms are really turned off by the idea of working in a high rise, even if it was a class B commercial space. In terms of thinking about building typologies that are appropriate for companies in this new wave of manufacturers, being in a multi story building is not a bad thing. There’s a sense of community in many of these [retrofitted industrial buildings] that new companies want to be a part of, and that sets them apart from more traditional manufacturers.

That works for a while at a certain stage of your growth as a company, but it will be interesting, looking toward the future, to see how and whether can we make sure that, if these companies hit growth spurts, we can still have spaces that they can move into. That’s something that we’re looking at here at NYCEDC, on the policy side, so that the city can continue to support these companies through their whole life trajectory, not just during their start-up phase.

"There’s a sense of community in many of these [retrofitted industrial buildings] that new companies want to be a part of, and that sets them apart from more traditional manufacturers." / Photo: OHNY

“There’s a sense of community in many of these [retrofitted industrial buildings] that new companies want to be a part of, and that sets them apart from more traditional manufacturers.” (Photo: OHNY)

That brings us to an interesting subject that a lot of New Yorkers probably know very little about: the Industrial Business Zone. What, exactly, is an IBZ?

Industrial Business Zones were a policy program that was started back in late 2005 and went into effect in 2006. Initially the city created a total of 16 IBZs; in the past year we’ve added five more. These 21 areas are located in all of the boroughs except Manhattan. IBZs can only exist within an area that’s zoned for manufacturing, aka an M-zone; they do not change the existing land use. The process to define the boundary lines of these areas is somewhat rigorous, and is governed by the city’s administrative law code. [IBZs aren’t actually formal zoning rules, but] if the city wants to create new IBZs or expand or contract existing IBZs, they have to follow a set of very specific steps in order to consider those changes or modifications.

The IBZ program was primarily created as an outcome of many businesses being concerned that the areas where they were located were going to be rezoned to other uses, like residential, and that they would be pushed out of the city. The program is a way of telling industrial business communities that they are still valued, and that we still want them around.

How do you explain to people why, at a time when it can be so much more profitable to build a condo tower or a hotel, it’s important for the city to make space for manufacturing?

Manufacturing companies tend to pay, on average, a much higher wage compared to other industries where you don’t need a four-year degree. Looking at that wage trajectory, and ensuring that the types of companies that offer good wages for someone without a degree, from a policy perspective, is something that this administration really believes in. The overall benefit to the city of having these jobs here is that these are living wage jobs; there is so much talk about the hollowing out of the middle class, and these are the jobs that can create some level of stability for the New Yorkers who are still pursuing that so-called American Dream.

We think that the city is at a very exciting inflection point. With the new administration, we’re at that point at which we can really send strong indicators to this part of the city’s economy and ensure that these companies feel welcomed and encouraged to stay, and also that they have access to additional tools and resources to grow to the extent they want to, and to become sustainable in the full sense of the word—not only for their bottom line, but for the communities which they’re a part of. There are a lot of things that go into that, and what’s exciting about the Making it Here series of tours, and the conversations that are coming out of them, is that it is helping to re-paint [the picture that New Yorkers have of] what the city’s industrial landscape looks like, how it’s evolved, and where it’s potentially headed.

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“With the new administration, we’re at that point at which we can really send strong indicators to this part of the city’s economy and ensure that these companies feel welcomed and encouraged to stay.” (Photo: OHNY)

Tour Recap: Brooklyn Army Terminal

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While many of New York City’s waterfront neighborhoods have undergone dramatic change over the past decade, Sunset Park, Brooklyn, still looks and feels like a solid, working class industrial neighborhood. The streets are lined with simple but attractive rowhouses, alternately framing views of ships passing by on the harbor, or the towering facades of industrial complexes like Industry City and the gargantuan Brooklyn Army Terminal (BAT).

At BAT, New York City Economic Development Corporation (NYCEDC) has spent the past three decades on a multi-phased renovation, re-activating more than three million square feet of once mothballed industrial space. Today, the usable space is 100% leased, to a mix of commercial and industrial tenants. On May 20th, Open House New York organized a tour of BAT as part of the Making it Here series on contemporary manufacturing spaces in New York City. The tour served as an opportunity to learn about how NYCEDC, OHNY’s lead partner on MIH, has leveraged this unique public asset to provide dedicated space for industrial and manufacturing businesses at a prime location.

BAT, designed by Cass Gilbert (of Woolworth Building fame) and opened in 1919, was originally built by the US Army to house soldiers and distribute supplies around the world. It was the largest military supply base through WWII, but had been decommissioned by 1975. Since 1984, when the city purchased BAT from the Army, NYCEDC has invested more than $165 million to transform the two main buildings of the 95-acre complex into a major employment center with a diverse tenant base of more than one hundred businesses, including dozens of manufacturers.

NYCEDC Vice President of Industrial Initiatives and Income Mobility Miquela Craytor (center-right) welcomed the group. (Photo: Daniella Shin)

NYCEDC Vice President of Industrial Initiatives and Income Mobility Miquela Craytor (center-right) welcomed the group. (Photo: Daniella Shin)

In fact, on the very morning of the Making it Here tour, BAT played host to a press conference where NYCEDC President Kyle Kimball and Mayor Bill de Blasio announced a commitment by the city of $100 million to renovate the last 500,000 square feet of unused space in the complex, which could add thousands of additional jobs to the 3,600 that are already on-site.

Later that afternoon, OHNY tour participants gathered in the lobby of Building B, a large space that was recently renovated to add a café and seating areas where workers from the many companies located within BAT can meet and mingle. The lobby is flooded with natural light thanks to floor-to-ceiling windows that look out into the iconic atrium through which trains moved more than 37 million tons of military supplies during the half-century that the Army occupied the complex.

Out in that soaring atrium space, Miquela Craytor, Vice President of Industrial Initiatives and Income Mobility teams at NYCEDC, used the State of Local Manufacturing report (October 2013) as a jumping-off point to explain how the city has responded to the local effects of the decline that has taken place in domestic manufacturing over the past few decades, as globalization has kicked into high gear.

An old railroad car was brought into the atrium during one of the renovation phases, and serves as a reminder of the soaring space's past use. (Photo: Daniella Shin)

An old railroad car was brought into the atrium during one of the renovation phases, and serves as a reminder of the soaring space’s past use. (Photo: Daniella Shin)

NYCEDC is able to provide space for mid-sized manufacturers (which typically require blocks of 15-40,000 square feet) thanks to its status as a public-private entity, which allows it to use the unique metric of jobs per square foot of usable space, rather than profit per square foot, to measure success. Just three years ago, BAT employed one person for every 1,200 square feet of usable space within its walls; today, that number has risen to one job for every 500 square feet of space. Continuing that process, Craytor attested, requires the transitioning of more warehouse space to light industrial use.

Once the stage had been set, tour participants split into two small groups and took turns visiting two manufacturers within Building B: Riva Precision and Jacques Torres Chocolates.

A worker at Jacques Torres Chocolates, somehow managing not to eat everything coming off of what may be the world's most delicious conveyer belt. (Photo: Daniella Shin)

A factory worker at Jacques Torres Chocolates, somehow managing to resist eating everything coming off of what may be the world’s most delicious conveyer belt. (Photo: Daniella Shin)

Up in Jacques Torres’ lofty chocolate factory, one could be forgiven for thinking they had stumbled into a Modernist interpretation of a Roald Dahl story. The space is full of clean white walls and shiny metal surfaces, and entrance is gained to the factory floor via a shoe-washing machine, a bristly contraption that provides a sensation suggestive of a walk over quicksand. Jacques himself led the OHNY groups around the facility, and even managed to work in a crack about the number of Oompa Loompas he has on staff. (It’s 10, in case you’re wondering.)

Jacques Torres, himself, (left) lead the tour of his facility. (Photo: Daniella Shin)

Jacques Torres, himself, (left) lead the tour of his facility, providing generously frequent samples along the way. (Photo: Daniella Shin)

Jacques’ facility at BAT, which just opened this past year, produces a variety of sweet treats that are then distributed to half a dozen stores around the city. The new factory has everything from giant machines for roasting thousands of almonds, to a cookie room that puts out 80 cookies every minute. There are also supportive spaces for accounting, product photography, and marketing: “Everything needed to support the manufacturing,” Jacques says. “It’s all right on site.”

The cookie room produces more than 80 cookies per minute! (Photo: Daniella Shin)

The cookie room produces more than 80 cookies per minute! (Photo: Daniella Shin)

Asked by a tour participant why he chose to keep his manufacturing business in New York City, despite the challenges presented by a search for an affordable, mid-sized industrial space, Jacques gave a short, impromptu speech outlining some of the key benefits of contemporary urban manufacturing: quality control and quality of life. “I like my life,” he began. “I like to have time for pleasure. If I opened up in another region, I’d have to spend my time traveling, and that’s it! Here, I can go to every one of my stores in one day. Do I really need to go get business in Las Vegas? My ego may tell me yes, but I think, maybe not.”

At Riva Precision, the group was met by CEO Ted Doudak. Informed that there was a short window of 15-20 minutes for the tour of his facility, Ted flashed a shocked smile. “Fifteen minutes! Fifteen minutes! Oh, we’ll need bikes!”

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Riva Precision occupies 37,000 square feet of space on the sixth floor of Building B. (Photo: Daniella Shin)

Indeed, Riva’s 37,000-square-foot factory, to which the company re-located this past year after two decades in Long Island City, is cavernous–more than 15,000 square feet larger than their LIC facility had been. Most of the machines and workstations, which produce high-quality jewelry for clients like Tiffany & Co., are located in a single large room. One of the most fascinating machines produces the tiny, fine platinum chains often used in necklaces and bracelets, rapidly blasting a thin metal rod with a tiny laser beam to create and fuse each link around the previous one in barely a second. Riva is also home to a row of bulky computer numerical control (CNC) machines. Ted was pleased to inform the group that he had worked out a partnership with a tool maker next door to share the use of the CNC machines. When Riva isn’t using them, they often produce a variety of metal tools, allowing both manufacturers to share in the costs of owning and operating these very high-tech pieces of machinery, and illustrating another important benefit of co-location for manufacturing businesses that often require expensive equipment.

Ted Doudak explains the use of the "lost wax method" in jewelry production. (Photo: Daniella Shin)

Ted L explains the use of the “lost wax method” in jewelry production. (Photo: Daniella Shin)

Ted was a fan of BAT for many of the same reasons that Jacques had listed, and quality of life was, yet again, an important consideration in Riva’s re-location; Ted (and many of his employees) live within walking distance. At the end of the day, this seemed to be one of the key takeaways from the tour: far from detracting from the livability of the surrounding neighborhood, BAT is an amenity, providing a range of jobs for New Yorkers at different skill levels within walking distance of affordable housing and mass transportation.

A factory worker at Riva Precision mans a machine that uses tiny laser blasts to create fine chain link. (Photo: Daniella Shin)

A factory worker at Riva Precision mans a machine that uses tiny laser blasts to create fine chain link. (Photo: Daniella Shin)

After the tour, workers could be seen hanging out on the patio in front of the neighboring Building A, where the complex’s managers had set up picnic tables with a panoramic view of the harbor. If there is room for manufacturing in contemporary New York, it will need to fit into the diverse weave of mixed uses that make up the city’s urban fabric, rather than standing off to the side, by itself. At BAT, it is easy to start to imagine how this might look.

Riva's facility looks out over the Sunset Park neighborhood of south Brooklyn, a solid, working class neighborhood. (Photo: Daniella Shin)

Riva’s facility looks out over the Sunset Park neighborhood of south Brooklyn, a solid, working class neighborhood. (Photo: Daniella Shin)