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Mayor Michael R. Bloomberg today announced the start of renovations to Federal Building #2, a vacant 1.1 million-square-foot warehouse in Sunset Park, which will create approximately 1,300 permanent industrial jobs and 400 construction jobs, and when completed will be used for light manufacturing. In May, developer Salmar Properties was selected by the City and paid $10 million to purchase the building and will invest approximately $35 million to transform the warehouse into a state-of-the-art industrial center, including repairing the building’s façade, roof, and windows, as well as installing elevators, plumbing, and electrical wiring. Mayor Bloomberg was joined at the groundbreaking at the Federal Building by Congresswoman Nydia M. Velázquez, Congressman Jerrold Nadler, Council Speaker Christine C. Quinn, New York City Economic Development Corporation President Seth W. Pinsky, Salmar Properties co-owners Marvin Schein and Sal Rusi, Brooklyn Borough President Marty Markowitz, Councilmember Sara M. Gonzalez, and General Services Administration Regional Administrator Denise L. Pease.
“By encouraging private investment in an array of sectors, we are diversifying and strengthening our economy for the long-term,” said Mayor Bloomberg. “New York City always has been, and always must be, a place where people can find good jobs in making and moving products. Bringing manufacturing back to Brooklyn means job opportunities for New Yorkers in Sunset Park and across our city.”
“Finding new ways to utilize federal facilities located in New York not only creates good jobs, but, over the long term, can attract additional commerce to an area,” said Rep. Nydia M. Velázquez. “Sunset Park is a walk-to-work community and the majority of the industrial jobs created by this project will employ local residents, right here, in our neighborhood.”
“I am thrilled that we are breaking ground on this major manufacturing development," said Congressman Jerry Nadler. "This project will breathe new life into Sunset Park’s waterfront and Brooklyn’s manufacturing district, ushering in 1,300 permanent jobs, 400 construction jobs, and essential economic development. I applaud the General Services Administration and the City, which, along with community stakeholders, Congresswoman Velazquez, and myself, have done so much to see this project through. We have been working for over a decade to finally arrive at this great day.”
“My Council colleagues and I are proud to be a part of this project that will create good paying construction and permanent jobs and bring vibrant new industry to Brooklyn,” said Council Speaker Christine C. Quinn. “I want to thank Council Member Gonzalez, Mayor Bloomberg, EDC President Pinsky, Congress Members Nadler and Velázquez, and all our partners in government and the private sector who worked so hard to make this project a reality.”
“Manufacturing has always been and will always be a critical component of New York City’s economy,” Deputy Mayor for Economic Development Robert K. Steel said. “With the redevelopment of Federal Building #2 we will help ensure that New York will remain the home of growing, vibrant, dynamic industrial businesses.”
“Transforming this vacant warehouse into a state-of-the-art industrial center is a major achievement, and a critical step in the Bloomberg Administration’s efforts to strengthen New York City’s industrial sector,” said New York City Economic Development Corporation President Seth W. Pinsky. “This building will soon be home to more than a thousand well-paying jobs, and is a perfect example of how we can creatively work together with our private and public sector partners to grow the City’s economy.”
“Fed Building #2 is well suited for industrial and manufacturing uses, with 23 elevators banks, multiple loading docks and parking that will enable tenants to easily move raw materials and finished goods in and out of the building,” said Marvin Schein, co-owner of Salmar Properties. “Salmar looks forward to developing this site into a class A building that will help generate jobs and keep industry in New York City.”
“The development of Federal Building #2 will not only create 1,700 much-needed permanent and construction jobs for Brooklynites and New Yorkers, but bring more light manufacturing and retail space to Brooklyn and Sunset Park,” said Brooklyn Borough President Marty Markowitz. “This is what we call a ‘win-win’—and my office was proud to join the New York City Economic Development Corporation and president Seth Pinsky, our representatives in Congress, Nydia Velázquez and Jerrold Nadler, Council Member Sara Gonzalez and Salmar Properties in efforts to repurpose this vacant building and turn it into a thriving and environmentally sustainable industrial center.”
“After years of negotiations and planning meetings, disappointment and hope, I am so grateful to have finally arrived at this point,” said Councilmember Sara M. Gonzalez. “The Federal Building #2 project represents the continued rebirth of the Sunset Park waterfront and will bring thousands of much needed jobs to local Brooklyn residents. I would like to welcome our new neighbors, Salmar Properties, and thank my friends and colleagues in Congress – Congresswoman Velazquez and Congressman Nadler - who worked so tirelessly to make this day a reality and to Mayor Bloomberg and EDC for their continued attention to and investment in Sunset Park.”
“By successfully disposing of this warehouse building GSA is supporting President Obama’s mission to put people back to work and enable small businesses to grow,” said GSA Regional Administrator Denise L. Pease. “This is about creating opportunity for small businesses, for workers, and for our local communities. GSA has taken a non-performing asset and facilitated the private sector to build a state-of-the-art industrial center; essentially this is what public private partnership is all about.”
As part of the sale, Salmar Properties has agreed to a deed restriction for 30 years limiting the majority of the building – at least 85 percent – to light industrial uses, with the remaining 15 percent available for retail and other uses that will also create jobs. Minimum build requirements –which include the repairs to the façade, roof, and windows, as well as the elevator, plumbing, and electrical installation – must be fulfilled within two years. The renovation was assisted by the New York City Industrial Development Agency, which approved approximately $37 million in sales and real-estate tax exemptions, contingent upon the project reaching and maintaining 1,300 industrial jobs. Salmar is seeking a Leadership in Energy and Environmental Design (LEED) Silver rating for the building, and has also agreed to work with local stakeholders, and minority and women-owned business associations to develop a comprehensive strategy to identify local businesses and residents that are seeking construction jobs.
Federal Building #2 was built in 1916 as a warehouse for the Department of the Navy and was last occupied in 2000. Located in the Southwest Brooklyn Industrial Business Zone, the activation of the Federal Building will build upon the City’s Sunset Park Vision Plan and Waterfront Vision and Enhancement Strategy for a modern industrial waterfront. The area is already an enclave for light manufacturers and other industrial businesses, with 5.8 million square feet of City managed industrial space presently spread across the Brooklyn Army Terminal, Bush Terminal, South Brooklyn Marine Terminal, and Brooklyn Wholesale Meat Market. These four facilities already employ approximately 3,400 people at more than 140 companies, with an additional 400 jobs to be created at South Brooklyn Marine Terminal once Axis Group and Sims Municipal Recycling Facility begin operating. The neighborhood is easily accessible by a variety of mass transportation options and is able to draw employees of all skill levels from throughout the City.
The industrial sector is an integral part of the City’s economy that has faced serious challenges in recent decades, but now offers real opportunities for growth and development. The renovation and activation of Federal Building #2 as a hub of industrial jobs is a key component of the City’s recently announced 22 initiatives to strengthen the City’s industrial sector and help small industrial businesses stay and grow in New York City. In total, the 22 initiatives will revitalize, modernize, and preserve up to 9 million square feet of underutilized industrial space, and create and retain up to 30,000 direct and indirect industrial jobs, generate annual payroll earnings of more than $900 million and more than $150 million in City tax revenue.
The initiatives resulted from an inter-agency review of the City’s industrial policies, led by Deputy Mayor for Economic Development Steel, New York City Economic Development Corporation President Pinsky, Department of Small Business Services Commissioner Robert W. Walsh and City Planning Commissioner Amanda M. Burden. The review found that while the City’s industrial sector has been declining in line with national trends of 8 percent annually over the past 10 years, there are certain subsectors showing stability and growth. As offshoring costs increase, it is anticipated that industrial activities will continue to grow nationwide. New York City in particular offers unique location-based advantages for industrial activity, including a population of about 8.4 million, access to a large workforce and highly-skilled labor, and one of the nation’s busiest ports based on import volume. The review also found that industrial businesses in the City are challenged by a lack of building stock appropriate for modern industrial uses, higher costs, and difficulty maneuvering City processes. Industrial sectors account for 16.3 percent of New York City’s overall private employment and more than 25 percent of employment outside of Manhattan, and industrial jobs have a mean wage of $64,000.
The renovation is also part of the Waterfront Vision and Enhancement Strategy (WAVES), a citywide initiative launched by Mayor Bloomberg, which will create a new sustainable blueprint for the City’s more than 500 miles of shoreline. WAVES has two core components: Vision 2020: The New York City Comprehensive Waterfront Plan, which establishes long-term goals for the next decade and beyond, and the New York City Waterfront Action Agenda, which sets forth priority initiatives to be implemented within three years. Together, the initiatives will provide a blueprint for the City’s waterfront and waterways, and focus on the following categories: open space and recreation, the working waterfront, housing and economic development, natural habitats, climate change adaptation and waterborne transportation.