City agencies try to remake the Garment District

Volume One, Issue 28, March 30 - April 05, 2007

By Chris Lombardi

City officials met privately with garment-industry insiders on Monday at Parsons School of Design, soliciting feedback on new zoning proposals and, in the process, bringing to a head competing visions of the Garment District’s future that is leaving a bitter taste in the mouths of some fashion entrepreneurs.

At the request of the Garment Industry Development Corporation, the nonprofit advocacy arm of apparel designers and manufacturers, representatives of the New York City Economic Development Corporation, the Fashion Center Business Improvement District and the Department of City Planning sized up the state of the area and unveiled their strategic plan for reviving what they see as a moribund district. The plan calls for a much glitzier Garment District, a radically transformed streetscape with a mix of showrooms, hotels and restaurants that welcomes foreign buyers, investors and tourists to the fashion capital of the world.

The attendees at the meeting, which filled the basement of Parsons’ Fashion Building, had come with a different vision—that of a Garment District where these entrepreneurs and small manufacturers, the small businesses that feed New York’s third-largest industry and employ more than 5,000 people, are supported and protected, and of a neighborhood that retains some of its hardscrabble character, where it’s not uncommon to walk down the street pushing bolts of cloth or still carrying pinking shears in one hand.

Some of them were young designers, like Yeohlee Teng; others represented larger designers like Bill Blass and Donna Karan. Most were producers of apparel and detailing or provided services to showrooms—the sector of the industry that is, according to GIDC, actually growing. They came because rising rents in the district have already been making it harder for them to stay, and they wanted to hear how these officials would help them.

Patrick Murphy, strategic planner for fashion and retail for the NYC Economic Development Corporation, offered a list of “ideas” for the future, which he said had been developed in consultation with GIDC as well as the Fashion B.I.D. and building owners. “We’re here to find some common ground,” he said before stating three goals for the strategic plan: to preserve the remaining base of producers, prevent the displacement of showrooms, and allow more “complementary uses” for the rest of the space—what the plan called a “more varied streetscape,” which means adding nightlife and retail to showrooms and seamstresses.

City officials then offered a future that included

· Zoning changes that would allow landlords to rent out significantly more office space, while still allowing for an unspecified amount for local apparel producers

· Allowing one square foot of office space for each foot of showroom

· Conversion of some space for hotels and restaurants, especially on lower floors

· Non-zoning strategies to preserve producers, such as tax benefits for capital improvements, targeted relocation grants for producers and suppliers, increased enforcement of rules that proscribe illegal uses of district buildings, and allowing single buildings to become Industrial Business Zones (IBZ) and thus receive tax breaks.

The officials stressed that zoning rules enacted in 1987, when the Special Garment District was created, are no longer workable. The rules, for side streets only, require building owners to set aside fully half their square footage for apparel manufacture or related businesses. Those haven’t even protected apparel businesses the way they were meant to, said Murphy and the others, and they have contributed to a slow decline in the area.

Although New York is still the leader in fashion, said Murphy, with $47 billion in sales versus $4.9 billion for Los Angeles, $29 billion for Paris and $3.9 billion for Milan—and although the city has 82 percent of the nation’s showrooms for buyers—the districts’ employment levels have dropped significantly even since 2000, when a full one-third of spaces in the district were devoted to apparel manufacture and supply.

In 2006, only 21 percent of space was devoted to such uses, while 36 percent were used for showrooms, 16 percent for Class B office space, 5 percent were vacant, 5 percent were under construction, and a full 13 percent were illegally rented for office or residences, according to GIDC’s most recent figures. Rents for manufacturers and suppliers are about half of what is paid for offices and one-third for stores and homes, making the buildings—as the Fashion Center B.I.D. put it in a 2006 report—“under-performing sector in terms of income.” Thus, landlords are failing to invest in their own buildings, said Murphy, and the resulting shabbiness has caused an exodus of younger designers to more fashionable locales like Soho. If the rules allowed building owners to make a more reasonable income, he argued, then the city could more intensively enforce the new rules— and perhaps create nonprofit status, with subsidies, for buildings devoted to apparel production.

Monday’s meeting was off-limits to the press, since the proposals offered were “just ideas” and not full-fledged zoning rules, officials told Chelsea Now. Leaving after having been invited by one of the small business owners, we managed to report the story through sources inside, after the fact. The details of the pre-proposals, and the supporting evidence, came from the officials’ PowerPoint presentation, which Chelsea Now was privy to when they showed them to the zoning committees of Community Board 4 and 5 last month.

Responses to the Parsons presentation ranged from quietly skeptical to more openly hostile. Most of the attendees were angered by the lack of specifics like dollar amounts for relocation funds, subsidies for manufacturers, or even the actual percentage of floor space to be set aside for services to the industry, from patternmaking to trim. “It’s hard to have a super-productive conversation,” said GIDC Executive Director Sarah Crean, “if they won’t say exactly how much they are planning to set aside for our producers.”

Others noted that the city officials did not really seem to be listening to their concerns. “They didn’t take notes,” said Samanta Cortes, of Fashion Design Concepts, who had invited Chelsea Now to the meeting and thought she knew why we had been asked to leave. “They don’t care what we think. They said they want to get this done by the end of the year, and that they started last summer,” she said. “They must know exactly what they want to do, but they want to do it on the QT without anyone noticing.” She said that the panel took notes on scrap paper they quickly rounded up 20 minutes into the meeting—and only after it became obvious that they were expected to.

As for better enforcement of the rules that protect small business, Cortes said, “If they’re not following the rules now, why do you think they will when you’ve given them more?”

At the meeting, many of the attendees also questioned the city’s assertion that young designers are fleeing to Soho, noting that Theory, the most often mentioned Soho design company, owns its building and doesn’t have to contend with rising rents. Meanwhile, Yeohlee Teng, a young designer at the meeting, has exhibited her collections at the Kennedy Center and the Galerie Museum of Paris but bases herself firmly at West 35th Street. She came to the meeting to stand alongside her suppliers as they asked for help.

All, including those who took the officials’ desire to help at face value, were deeply concerned about what the future held. They wondered how long they would be able to remain in the district, or even in New York City. “I could move this business to New Jersey,” said Paul Cavazza, of Create-a-Marker, a company that turns designers’ sketches into workable patterns and electronically ships those patterns to factories. “But it would be a loss, and not just for me.”

Crean, whose GIDC agency receives more than half of its operating budget from city funds, sees room for compromise, given that with the deeply diminished footprint of manufacturing, “we’re really talking about five to seven buildings worth of space.” The question in her mind is how the changes needed to protect the producers in her constituency can actually be carried out, and by whom.

This, she added, is a higher priority than speeding up the district’s transformation into a velvety cocoon for high-end fashion. Before talk of hotels and restaurants, she said, “I’d like to talk about making sure that the people can stay.”