The Brooklyn Army Terminal: New York’s Next Manufacturing Hub?

NEW YORK — The Brooklyn Army Terminal was built for war, and during World War II, it was the largest military supply base in the country, with its own railroad line and police and fire departments along what today is the Sunset Park waterfront.

But on a Saturday afternoon in September, children lined up for ice cream on the terminal steps. A little girl in a pink shirt reached for what appeared to be her fourth free sample of a chocolate-flavored waffle cone. Down by the ferry landing, two women sat on a wide platform that wrapped around a tree, sharing hummus and pita from one of the food trucks set up for the day. And at the parking lot at 58th Street and Second Avenue, which had been cleared to make a dance floor and outdoor venue for the day, couples and families waited for rapper Busta Rhymes to take the stage that evening.

The daylong event, celebrating the terminal’s 100th birthday, was part of a continuing city effort to take this giant relic and retool it for the 21st century.

But in this case, the city, which owns the terminal, is not transforming the structure into a tech jobs hub; it’s leaving Amazon to do that in Queens. In Brooklyn, something arguably much more revolutionary is developing: a manufacturing hub.

In May, the city finished a $115 million renovation of part of the complex — replacing windows and elevators, remediating mold and asbestos, and making landscaping improvements like the new waterfront seating, to attract entrepreneurs. This is not the first time this sprawling complex, designed by Cass Gilbert, an architect better known for designing the Woolworth Building, has been re-imagined. During Prohibition, the federal government stored crates of seized alcohol, with workers dumping the contents into the harbor. In 1958, crowds of fans and news photographers gathered to watch Elvis Presley deploy to Germany.

And in 1967, the U.S. Postal Service set up a temporary facility at the terminal after a fire damaged a Chelsea post office. By the time the city bought the terminal in 1981, however, it was a dilapidated behemoth. Its revival, a project marked by decades, not years, has cost around $300 million.

At 4 million square feet, the Brooklyn Army Terminal is much, much larger than the Empire State Building. It’s so big that trains once pulled into the central atrium of one building, where cranes hoisted goods up to the jutting concrete balconies. In this complex — built for an era when the Brooklyn waterfront was a bustling industrial center with 20,000 workers — the city sees an incubator for today’s manufacturers, said James Patchett, president of the city’s Economic Development Corp., which operates the terminal.

Currently, 3,800 people are employed at 100 companies there. They make goods like eyeglasses, sweaters, HVAC parts, pasta sauce and salad dressing. The city hopes to add another 1,000 jobs once the renovated space is fully leased.

“We can bring the waterfront back to its former glory with tens of thousands of people working there in a modern, industrial way,” Patchett said, referring to the revival of the larger waterfront area all the way up to the Brooklyn Navy Yard.

One solution for the terminal may have been to encourage Amazon to consider moving there. After all, its surrounding area is much less congested than Long Island City. A number of Sunset Park developers, including nearby Industry City, about 22 blocks north of the terminal, did try to bring Amazon to the neighborhood.

But the Brooklyn Army Terminal never became a contender because it did not meet Amazon’s criteria. “Ultimately, Amazon was looking for 500,000 square feet of existing commercial office space” that would be move-in ready by 2019, Ryan Birchmeier, a spokesman for the Economic Development Corp., wrote in an email, emphasizing that the city was committed to keeping the terminal as a place for industrial jobs.

Manufacturing is not the most obvious choice in 2018. The challenges for keeping the industry afloat in the city are daunting. Between 1992 and 2017, the city lost 152,400 manufacturing jobs, according to the New York State Department of Labor. Today, only 72,300 remain.

New York companies that haven’t left the country for cheaper labor overseas are lured across the Hudson River to New Jersey, where operating costs are substantially cheaper and ports and highways are easily accessible. The asking rent for manufacturing space in Hudson County, New Jersey, for example, was $7.06 per square foot in July, compared with $22.20 per square foot in Brooklyn, according to Costar Group, a commercial real estate research firm.

“You’re competing with regional cities that have lower taxes and better tax abatements,” said Dan Marks, a partner at TerraCRG, a commercial real estate brokerage in Brooklyn.

Even for those willing to pay a premium to stay in Brooklyn, the space just isn’t there. The vacancy rate for manufacturing space in Brooklyn was 4.6 percent in July, according to CoStar. But there’s also a real desire, at least among the New York entrepreneurial class, to keep production local.

In recent years, there has been an influx of more creative companies in industries like film, television, media, technology, food and traditional manufacturing. Other industrial renovations around the city have proven successful, like the Brooklyn Navy Yard, another city-owned complex. Industry City, the privately owned mixed-use complex also in Sunset Park, has become a hip destination with a 40,000-square-foot food hall serving avocado toast, soup dumplings and Blue Marble ice cream.

“The days of the smokestack are gone, and they’re not coming back,” said Andrew Kimball, chief executive of Industry City, who previously oversaw the redevelopment of the Brooklyn Navy Yard. “But there is this new kind of making that is happening, that is creating the same kind of pathways to employment that the old-school manufacturer jobs did 50 or 75 years ago.”

Gerard Masci is one of those makers. A founder of Lowercase, which designs and produces eyeglasses, Masci almost gave up on New York after he spent a year working out of his West Village apartment while looking for a place that could support the 7,000-pound machine he needed to cut frames. “I got to the point where I said, the city doesn’t have the infrastructure for this kind of business,” he said. He considered relocating the company to the Hudson Valley, but ultimately rejected the idea. “It would lose the essence of made-in-New York City,” he said. “I was born here, and that’s part of the whole aura of the story.”

So he kept looking and found places that lacked running water, or enough electricity to power the heavy equipment. He and his business partner almost settled on a space in the basement of a residential building in Bushwick, Brooklyn. The landlord took them up to the first floor apartment and told the tenant there that he would need to cut a hole in the floor to drop the heavy machinery through it. “The guy was unfazed,” Masci said. “I would have done it, except for the fact that when I wanted to get it out I wouldn’t be able to.”

So, in 2015, when 1,800 square feet became available in the Brooklyn Army Terminal, Lowercase moved in, opening for business in early 2017.

Another tenant is the Konery, the artisanal waffle-cone maker that was selling ice cream cones at the September block party. In 2017, the family-owned business moved into 3,000 square feet at the terminal. Now Konery employees work in their window-wrapped room with views of lower Manhattan, New York Harbor and the Statue of Liberty, mixing batter, pouring it into waffle makers and rolling out colored cones with flavors like red velvet, salted blue corn and orange Creamsicle.

“Some days we don’t even turn the lights on, the light is so nice,” said Kristine Tonkonow, who owns the company with her parents. Tonkonow said the company’s previous factory, in the former Pfizer Building in South Williamsburg, was less than half the size but cost more than twice as much per square foot.

To attract tenants like Lowercase and the Konery, the city sets rent below market rate, asking between $15 and $25 per square foot, depending on the size and condition of the space. Some of the 72,000-square-foot floors have been subdivided.

The city is not renewing leases for tenants that primarily used the terminal for warehousing and distributing goods. Those tenants are being replaced with ones that promise to bring jobs and actually make things. The median employee salary at the Brooklyn Army Terminal ranges from $42,000 to $75,000 a year, according to the Economic Development Corporation.

“These are really important, accessible, middle-class jobs for New Yorkers,” said Jonathan Bowles, executive director of the Center for an Urban Future, an urban research group. At this point, renovations on the terminal are 92 percent finished. Renovating a decaying building is a long process. The latest phase, which began in 2015, restored 500,000 square feet spread over seven floors in one building. The city also restored an annex building for food manufacturing. Two NYC Ferry routes, the Rockaway and South Brooklyn, now stop at the terminal. In July, the city released a request for proposals to build a distribution center on an existing parking lot.

Despite the investments, failure still happens. The city spent $5.2 million renovating 20,500 square feet to bring TechShop, a membership-based workshop and manufacturing studio, to the terminal in October 2017. The next month, the California-based company liquidated, and the space has been vacant ever since.

The city announced on Oct. 29 that MakerSpace NYC, a Staten Island-based nonprofit industrial workshop, would take over TechShop’s old quarters early next year.

“We are going to see manufacturers fail,” said Bowles, of the Center for an Urban Future. “The global competition is intense. But at the same time, I feel more optimistic about manufacturing today, more than at any time in a while.”

The optimism can be found in the amenities slowly developing around the terminal, including a deli and two day cares. A GrowNYC Fresh Food Box pop-up operates weekly on the grounds. During the summer, Swale Barge, a floating food forest, docked near the ferry landing. But it still feels empty. Most of the common areas are sparse, with halls that can feel barren, and grounds that are largely vacant.

“On a map, it looks like it’s 5 million miles away,” said Masci of Lowercase, who has struggled to convince customers to come to the factory for demonstrations and showings. “It feels really far and isolated.”

Masci said the city tried to bring food trucks out to the property, but without enough foot traffic, they didn’t last long. By comparison, Industry City has a tenant lounge with a coffee bar and billiard table, a tenant gym, and a 5-acre courtyard where tenants can mingle.

But for smaller manufacturers looking to grow, the bells and whistles take a back seat to affordable rent and plenty of space.

“It’s more and more difficult for those types of companies to operate in many neighborhoods in New York,” said Ben Margolis, the executive director of the Southwest Brooklyn Industrial Development Corporation, which runs a job placement center in the terminal. “Where can you move your truck around or will you be ticketed? How do you move goods? To have a place in New York that’s a dedicated workplace is just essential.”