Navigating NYC’s Industrial Boom
Overcoming Environmental Obstacles Leads to Growth for e-Commerce
There is an industrial boom underway in New York City, thanks to both the rise in e-Commerce and a growing makerspace and manufacturing sector. This presents great opportunity to investors and developers with appetites for challenging sites, as the sought-after land is often brimming with various engineering, ownership, and environmental justice complexities. Navigating these matters requires an experienced team to carefully mitigate the risks associated with buying and building complex sites.
The current industrial boom could actually be considered a blast from the past, as industry initially popped up along New York City’s 520 miles of shoreline during the 19th century. Operators of these facilities – including petroleum refineries, manufactured gas plants, coal yards, tanneries, machine shops, and more – often legally disposed of waste in the cheapest, most convenient way possible: directly into the water or along the shore.
Fast forward to 1961, when a Zoning Resolution memorialized existing industrial zoning in New York City with an aim to separate industrial from residential uses. The timing of the Zoning Resolution also happened to coincide with a fundamental shift in how manufactured goods were transported: from barge to truck. By the 1970s and 1980s, many waterfront industrial facilities in New York City were abandoned and in disrepair.
More recently, however, private-sector interest is increasing the footprint of e-Commerce and manufacturing in New York City. With this rising interest comes the need for knowledgeable project teams to forge ahead on these complex sites. Langan’s experience redeveloping industrial properties, particularly brownfield sites, includes overcoming a variety of unique challenges that may arise, from poor quality soils and environmental contamination to infrastructure issues, failing bulkheads, traffic complications, and more.
While creating a separation between industrial and residential zones made sense in 1961, New York City has changed considerably since then. For one, optimal siting of industrial properties is now near highways due to the shift to transporting goods by truck. Secondly, the rise in e-Commerce has led to an increased demand for last mile delivery facilities in proximity to New York City’s dense population. Lastly, multi-family developers argue that the city’s industrial waterfronts, full of derelict brownfields, are ripe for transformation into luxury residences with ample public open space and access to the water. The NYC Department of City Planning has recognized these shifts and several area-wide rezonings of industrial properties are underway.
As a result, interested investors and operators will find ample opportunities if they have an appetite for complex sites. Prior to digging in, it is essential to line up a knowledgeable, experienced, and well-coordinated multidisciplinary team to provide innovative solutions to manage risks.