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)

Urban Manufacturing Q&A: Jen Becker, Pratt Center for Community Development

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Last February, the Pratt Center for Community Development—one of the leading research organizations focusing on manufacturing in New York City—published a detailed report analyzing the success of the Brooklyn Navy Yard, located along the East River waterfront just a stone’s throw from the Pratt Institute campus, where the Pratt Center is based. The report also identifies and analyzes potential sites in other cities around the US where a similar type of campus could be developed. The following is an edited transcript of a conversation between OHNY and Jen Becker, a Senior Fellow for Economic Development at the Pratt Center and the lead author of the Navy Yard report, looking at the trends impacting urban manufacturing in the US today and, specifically, how those trends are changing the shape of manufacturing in New York City.

Let’s start off by taking stock of how the public understands manufacturing: what is the biggest gap you’ve observed between the public perception of urban manufacturing and the reality on the ground, today?

There’s a myth that manufacturing doesn’t exist in a lot of cities—certainly in New York City—because people just don’t see it anymore. Obviously, manufacturing has declined; we have a lot of old sites that aren’t used for manufacturing anymore, and a lot of old industrial buildings that have been converted to residential. And as our economy has changed to more of a service economy, people are not as personally connected to the manufacturing sector as they once were, so it’s become a lot less visible.

In actuality, there’s still a tremendous amount of manufacturing going on in New York. It’s really diverse, it’s very vibrant, and it’s tied to a lot of the more high profile industries that NYC has become known for, like finance and design. Manufacturing is part of [the city’s overall economic] system, but it’s not as visible, so people just aren’t aware that it’s happening and that things are still being made here.

 

There’s also the perception that manufacturing is part of the ‘old economy,’ and the ‘new economy’ is all about creativity, innovation—brain work, as opposed to manual work. But that’s changed a lot, hasn’t it? A lot of the manufacturing that’s happening in NYC today is pretty creative.

In the past few years there’s been a resurgence in the way we value the making of things. I don’t think the public perception has shifted completely, but I think there is more of an acknowledgement of this field than there was a few years ago. I think people still think it’s more of a hobbyist thing, like “Oh, I can take a class,” and the focus is on the Maker Movement, but people aren’t yet aware of the breadth of companies that are here that are creating jobs and employing people.

 

A number of the manufacturers visited so far through Making it Here tours have cited quality of life as a big issue for why they choose to operate here: when people ask, “Why on earth do you want to manufacture things in New York?”, manufacturers respond they want to live in New York and to be here for many of the reasons that anyone else does.

The manufacturers that are here today, in large part, are of a different type than what was here fifty years ago. The vast majority of these companies are not competing just on price or volume. The companies that want to be here, and that are thriving here, are the ones that are more custom oriented. There’s a real benefit to them being close to their market, and being close to designers, to other innovators, and being part of that network.

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In the Navy Yard report, you mention the dynamic clusters that have formed within that campus; can you talk about co-location and some of the benefits of having manufacturing in urban neighborhoods?

The value of clustering is not new. New York City is actually built on that: think of the Garment District, the Flower District. In many cases today that’s dissipated, and a lot of those districts have now become more diverse, in terms of the industries that are there. But companies still find a strong value in being near other similar companies. It doesn’t have to be in terms of ‘we’re making the same product,’ but that there’s a sort of shared, creative energy. Especially for companies that are smaller, or just starting up, I think there are a lot of benefits to being in close proximity to others. They can share resources such as equipment, or work together on particular projects, and that kind of collaboration is really useful, especially for the smaller companies.

 

It used to be that the city had these huge companies doing a lot of manufacturing on one site. As the companies doing manufacturing have gotten smaller, how has that changed the demands for industrial space?

Older industrial real estate often consists of multi-story buildings that people think can’t accommodate manufacturing anymore, and that since we don’t have the space for giant, single-story industrial buildings [like those found in suburban industrial parks], manufacturing can’t fit into contemporary New York City. And that’s true, we don’t have that kind of space, and those companies aren’t going to stay in the city.

But there’s still a way to re-use older, multi-story buildings to meet the needs of these smaller industrial firms that are looking for around 5,000 square feet, by breaking up those spaces. That’s what the Navy Yard has done, and we’re seeing this all across the city. What we’re looking at is that there are going to be a lot more of these smaller manufacturing companies in the future, rather than a few bigger companies. We still need to make sure that we have room for these companies to grow. We need flexible real estate.

 

Why should the average New Yorker care about manufacturing in their city? How does it affect the future of their neighborhoods?

Manufacturing has been, and still remains, one of the best job opportunities for people with limited educational attainment, or limited English-speaking skills; manufacturing pays more on average than jobs at similar skill levels, like retail or hospitality. Entry-level jobs in manufacturing tend to pay better and provide better access to career ladders, so it’s a really important sector to maintain just in terms of economic diversity. From an environmental perspective, we don’t want to just be a city of consumers that’s importing all of our goods. There’s an environmental impact to transporting all of the goods that we consume into the city. It would be unrealistic to say that everything we need is going to be made in New York City, but having some of those goods made here cuts down on transportation and carbon emissions.

Lastly, and this ties into both of those things, is the economic vitality of the city as a whole. Manufacturing has a really significant economic impact, and manufacturing jobs have a really high multiplier effect. The economic impact of a manufacturing job is quite high, and bolsters the economy in a positive way. Having a diverse economy is just really important to the overall health of our city.

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How will manufacturing fit into New York City in the coming years? Will we see more manufacturing integrated back into our neighborhoods? Or is the campus model of something like the Navy Yard more desirable?

There’s not a one-size-fits-all solution; we need to have a mix of tools at our disposal. There is a real need to have areas like the Navy Yard that are universally acknowledged as places for job creation, not for residential development. Underlying all of this is the real estate pressure facing manufacturing; that’s the number one challenge for maintaining manufacturing in New York. Residential and commercial uses are always going to be able to pay more than manufacturers for real estate, so it’s important for there to be areas in the city where manufacturers know that they can invest in their companies and facilities, to buy new equipment, and to know they aren’t going to get priced out.

Also important are mixed use areas; there are some manufacturing companies that really want to be in those kinds of areas, which have a different kind of vibrancy. It’s really critical that we develop tools to be able to maintain that mix, though. Saying that anybody can be in a given area without some kind of mechanism to balance that mix out over time will lead to the loss of that manufacturing space.

And one concluding thing, for people who haven’t been in a factory before, is that it’s one of the coolest things you can see: watching people make things, either by hand or even by machine. [Manufacturing is something we often] take for granted, and one of the things that I love about my job is being able to go into factories and see how things are made, and to acknowledge that work, and reinforce its value in our community.