Monday, November 21, 2011

NYC Regional Economic Development Council's draft strategic plan: priority projects involve the food industry, clean tech, incubators for artists and small biz (but there may be wiggle room for Atlantic Yards)

Well, the New York City Regional Economic Development Council has issued its Draft Strategic Plan (also embedded below) and, contrary to my speculation last month, there's virtually nothing about Atlantic Yards in the competition (with other regions) for packages of state economic development subsidies.

Rather, the priority projects involve the food industry, clean tech, an incubator for artists and others, and a small business incubator. Here's the 11/15/11 press release. The strategic plan review, in which regions compete, will be next week.

Then again, as described below, if Atlantic Yards--despite being excluded from the Downtown Brooklyn rezoning--is considered part of the Downtown Brooklyn "Opportunity Zone," then some state assistance could be steered there.

Priority projects

From the report:
The transformative projects that were identified as top priority and ―ready to go for the first competitive round of state funding include the following:

The redevelopment of the Hunts Point Produce Market: This project represents a major investment and job generator in the state’s poorest county, the South Bronx, and in a food distribution center that is critical for thousands of small and minority owned grocery and produce markets as well as for agricultural production activities across New York State.

The new Green Manufacturing Center in the Brooklyn Navy Yard: A relatively small state investment will leverage private funds for development of the city’s first clean tech manufacturing center, for which the Navy Yard has already identified an anchor tenant that will relocate from out-of-state. This will help position New York State’s promising development of a clean tech industry cluster that reinforces research and commercialization at universities in many regions.

CREATE @ Harlem Green: Redevelopment of a long vacant industrial building to accommodate artists, artisans, small business and community services that will serve as a critical link between the historic 125th Street entertainment and retail district of Central Harlem and the new Columbia University campus and City College of New York in West Harlem.

NYC SeedStart: Expansion of a program that nurtures entrepreneurs and connects them to funding and markets, as a way of building innovation industry clusters. This project involves extending admission to SeedStart to entrepreneurs from other regions of the state, in order accelerate the funding and growth of vibrant industry clusters across New York.
The Challenge of Concentrated Poverty

The report states:
While unemployment is lower in New York City than the rest of the country, it continues to be unacceptably high, and the citywide measure masks significantly higher pockets of unemployment in specific boroughs, as demonstrated below, and in local communities within boroughs. Chronic conditions of unemployment among black and Hispanic males in particular exact significant social and economic costs on those individuals and their families and communities, as well as on the city and state economies. This is one major challenge that the New York City Regional Economic Development Council will seek to address.
Guess which borough is second in unemployment:

Similarly, while the rate of poverty has increased more slowly than the rest of the country, "the trend is not conducive to a healthy society," states the report, which notes that some 500,000 full-time workers live in poverty in New York City.



Shortage of Affordable Housing

The report states:
While tens of thousands of homes and apartments were built and renovated, resulting in the renaissance of hundreds of formerly blighted neighborhoods, the affordable housing challenge remains enormous, due largely to population growth, continued high rates of poverty and the many legal, political and regulatory barriers to cost-effective development.

Today, New York City has both a shortage of housing, exacerbated by the credit crisis in residential finance, and a crisis of affordability. Unsubsidized construction costs for new or rehabilitated housing result in rental rates or sales prices that far exceed what most residents can afford. Two-thirds of all households in the city are renters and over 43% of those currently devote more than 30% of their incomes toward rent. (Generally housing is considered affordable when a household pays no more than 30% of its income in rent.) Nearly 24% of renters pay more than 50% of their incomes in rent. Median rent for regulated and unregulated rental apartments, including utilities, came to $1,080 a month in 2009. Among households in the bottom third of the income distribution for renters, nearly 80% paid more than 30% of their incomes in rent and nearly 60% paid more than 50%. The Bronx is the borough with the greatest percentage of residents paying half or more of their income to rent – 33%. The greatest percentage increase was in Staten Island, where nearly 8% more residents are spending half of their income on rent since 1999.
Additional state help

The report recommends additional state support for affordable housing:
The regional council has concluded that funding applications from the city are not receiving their fair share of state housing subsidy allocations, and will work to try to improve that situation.
In mentioning new potential projects, it does not mention Atlantic Yards (but I wouldn't rule it out):
Affordable Housing Preservation and Production: New York City has committed to investing $8.5 billion to build or preserve 165,000 units of affordable housing by 2014, and is now more than 75% of the way toward achieving that goal. One major new development, at Hunter’s Point South in Queens, will be the largest in the city since the early 1970s. New York State has been an important contributor to affordable housing initiatives in the city. These programs, which include opportunities for home ownership, serve the mix of middle and low-income households that is necessary to serve a diverse and growing population. Continuation of both state and federal housing aid is essential to the economic vitality of the region. There is also a need to revisit state and local incentives for private development of affordable housing, such as restrictions on the 421-a program, which may need to be more aggressive to help offset tight credit conditions.
Opportunity Zones

The report states:
“Opportunity Zones” – Thanks to completed rezoning plans and major public and private investments, neighborhoods and business districts across the five boroughs are poised for significant economic growth in the coming years. Accelerating job creation and economic growth in part will depend upon expedited regulatory approvals, targeted assistance, and support for public-private initiatives to market, finance and develop "shovel ready" sites in these communities, which have already undergone a decade or more of planning and predevelopment work. These are "Opportunity Zones" that are "Open for Business" and that the regional council will prioritize and assist.
The Opportunity Zones include:

  • 125th Street (Manhattan)
  • Coney Island (Brooklyn)
  • Brooklyn Navy Yard
  • Greenpoint-Williamsburg (Brooklyn)
  • Hunts Point (Bronx)
  • Long Island City (Queens)
  • Lower Manhattan
  • Jamaica/Southeastern Queens
  • Hudson Yards (Manhattan)
  • Flushing/Willets Point (Queens)
  • North Shore (Staten Island)
  • South Bronx
  • Southwest Brooklyn
  • West Shore (Staten Island)
And Downtown Brooklyn. Here's the description:
Particularly after a historic rezoning in 2004, Downtown Brooklyn has become one of the fastest-growing neighborhoods in New York City. Its population more than doubled in the last decade. With the completion of the Barclays Center and several crucial cultural institutions and commercial developments to complement this boom in population, Downtown Brooklyn is poised to be one of the city’s most active central business districts. This area also anchors Brooklyn’s participation in the innovation economy, with NYU Polytechnic Institute at its center. An opportunity exists to either expand the Polytechnic campus and/or accommodate expanded entrepreneurial uses at 370 Jay Street, a building that the MTA intends to sell.
Of course Atlantic Yards was not part of that "historic rezoning," it was a state override of city zoning.

So that description above doesn't sound like subsidies directed, say, at the long-stalled office tower(s) planned for Atlantic Yards. But it doesn't rule them out.


Infrastructure improvements

The report recommends public-private partnerships--a broad term that encompasses, at least in the official description, Atlantic Yards--for infrastructure improvements:
Neither city nor state government has the budget or borrowing capacity at this time to finance many necessary infrastructure investments. This should not stop progress, but instead motivate New York to adopt a major public-private partnership (P-3) approach to meet the challenge. Labor leaders and investment professionals in New York State have been working on national and state proposals for infrastructure funds that leverage private-sector expertise and the patient capital available from public and private pension funds. Whether in the context of a national infrastructure bank, should it be established, or a state initiative, New York City’s regional council is prepared to mobilize support for a new infrastructure financing program. P-3s are a growing trend in infrastructure finance and operation in the country.
Examples include the Port Authority's plans for the Goethals Bridge connecting Staten Island and New Jersey. Proposed examples include Moynihan Station and the Jamaica Station Plaza.

Improved public construction

The report recommends:
It is not enough to line up new financing mechanisms for public infrastructure construction, however, since the procurement, legal and management structures of most public construction in New York are inefficient and slow, resulting in under-funded, over-budget, and past-deadline capital projects. A major overhaul of legislated and regulatory processes and management practices surrounding public construction in New York—at the MTA, the Port Authority and State Department of Transportation—is urgently needed. A Blue Ribbon Task Force, established by the MTA and comprising industry and labor experts, issued a report five years ago that outlined many of the legislative and regulatory actions required to deal with the most egregious problems at the MTA, where it estimated construction costs to be 20% higher than necessary. The regional council will press for this reform.
Here's a 4/28/08 press release on the Blue Ribbon Panel for Construction Excellence. The report (also embedded below) stated:
The panel focused on six areas for action, with recommendations presented in six "white papers":
  • Bonding Considerations for Large Projects in a Competitive Environment,
  • Increasing Competition by Way of Project Delivery Options,
  • Manpower, Materials, and Logistics: Constraints and Opportunities,
  • Contractual Provisions: Issues and Opportunities to Improve Competition,
  • New Technology and Mega-projects: Improving Planning and Implementation, and
  • Project Management: Strategies to Bring Large Projects in On-Time and Within Budget.
None of it seems to deal with the failure, as with the Vanderbilt Yard crucial to the Atlantic Yards project, to ensure fair competition for public property.

NYCREDC Plan MTA Blue Ribbon Panel Construction Excellence

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