The proposed Garment Center rezoning reached a major milestone with the beginning of the 60-day review period by the City Planning Commission.  The new zoning rules would eliminate the current manufacturing preservation requirements on the midblocks within the Garment Center area, facilitating more investment and improvements by property owners.   In conjunction with the proposals to modify the Garment District rezoning, the City has simultaneously launched new incentive programs designed to preserve existing garment manufacturing space and to provide long term leases at affordable rents to the city’s garment manufacturing businesses.  These proposals grew out of discussions spearheaded by the Garment Center Steering Committee, which was chaired by Borough President Gale Brewer.

Garment Center District Zoning

The Special Garment Center District was enacted in 1987 to help stem the loss of apparel manufacturing jobs by limiting conversions to office and other commercial uses on midblocks within the Garment District area.  Generally extending between West 35^th and West 39^th/40^th Streets in portions of areas between Broadway and Ninth Avenue, any conversions required the preservation of an equivalent amount of garment production space.  Despite these restrictions, apparel manufacturing has continued to decline in the Garment Center over the past 30 years, as it has declined across the City and across the country.  In June, the Department of City Planning began the formal public review of proposals to eliminate the restrictions on midblock conversions while continuing to prohibit residential uses.

The zoning changes would:

• Maintain existing manufacturing and commercial zoning
• Lift the preservation requirement of garment production space
• Limit the development of new hotels by requiring a hotel special permit
• Improve neighborhood character through new height, setback and signage regulations

The City Planning Commission is expected to act on these changes in November, and the City Council in December/January.

New Incentives to Promote Garment Manufacturing

In addition to the zoning text changes, and as a response to city stakeholders who have advocated for more robust support for garment manufacturing companies, the city launched two financial incentive programs designed to preserve garment manufacturing space.

• Garment Center IDA Program: This program offers tax incentives to Garment District property owners through the New York City Industrial Development Agency (NYCIDA). Property owners are eligible for a range of real estate tax benefits, ranging from $1 per square foot to $4 per square foot of manufacturing space preserved. To receive these benefits, property owners will be required to offer long term (15 year) leases to fashion manufacturers, with rents capped at $35 per square foot (plus escalations). The Garment Center IDA Program already has three properties in its pipeline, totaling approximately 200,000 square feet of fashion manufacturing space, for properties at 307 West 36^th Street, 247 West 37^th Street, and 327 West 36^th
  
• City capital commitment of $20 million: These capital funds are targeted to facilitate the acquisition of a building in the Garment District. A nonprofit organization will be required to operate and manage the building as a dedicated fashion production space. The city, through the New York City Economic Development Corporation, expects to release a Request for Expressions of Interest for the use of this city capital later this month. While this acquisition financing program is new in the context of the Garment District, the city has used city capital in the past to assist nonprofit industrial developers (such as through the city’s Industrial Developer Fund).

For more information, visit the Department of City Planning’s Garment Center District Text Amendment, as well as NYCEDC’s Garment Center IDA program.

Capalino will continue to keep abreast of updates and developments regarding zoning and incentives in the Garment District and other areas of opportunity throughout the city. If you have property that is potentially affected by the zoning-related changes in the Garment District, please contact Richard Barth at 212.616.5845 or richard@nullcapalino.com. To learn more about citywide incentive programs, please contact Jeff Lee 212.616.5824 or jeffrey@nullcapalino.com.

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