Mayor Bloomberg has clearly taken an interest in fashion. In mid-December he teamed up with supermodel Heidi Klum, who pledged auction proceeds from her reality show, Project Runway, to support the Garment Industry Development Corporation (GIDC), a nonprofit that serves the textile and apparel industry. The mayor dedicated an additional $244,000 to educate 320 workers in nine factories on new production techniques.
But industry advocates say there’s a much bigger problem facing garment workers today: the loss of manufacturing space. And a little-noticed clause in the new Hudson Yards rezoning could make matters worse.
If garment-manufacturing space in the area is not used as such for three or more years, it can be converted to residential use, which can fetch more money on the real estate market. And that, said Magda Aboulfadl, a project manager at GIDC, provides a dangerous incentive for owners to not renew garment company leases or start warehousing empty space. “Even if it has been converted illegally, it doesn’t matter,” she said. “The owners don’t have to show that they tried anything to fill the space.”
Roughly 91 garment factories and 1,600 workers could be affected by the change. These buildings are located in the Special Garment Center District, an area of mid-blocks between West 35th and 40th streets and from Broadway to Ninth Avenue. They are protected by zoning regulations, established in 1987, which require all converted industrial space to be recreated onsite or elsewhere.
Yet, even before the Hudson Yard rezoning, some owners found ways around the law. At least 212 spaces in 45 buildings in this zoning district were illegally converted between 1991 and 2000, the most recent data available, according to research by the New York Industrial Retention Network (NYIRN).
330 West 38th Street may be one of them. Built in 1927, this cream-colored brick, pre-war building originally housed 15 floors of manufacturing and showroom space. As of 2000, the building still housed approximately 46,050 square feet of garment industry space, according to NYIRN. Now, apart from a handful of showrooms and suppliers, that space is largely gone, replaced with architects, design studios, doctor’s offices and law firms.
Coast Equities, LLC, the current owner, bought the property in 2003 for $30 million, and put it up for sale last October for $60 million. An article published on a real estate website described the property as an “office building.” Brokers were quoted in the article explaining that conversion to residential use is now possible, thanks to the Hudson Yards rezoning.
They may be jumping the gun, however. The Department of Buildings (DOB) recently slapped Coast Equities with a violation for illegally converting the 15th, 16th and 17th floors. The inspectors found a religious learning center; photographer and music studios; architecture, advertising and marketing firms; printing and publishing houses; and a cosmetics company in areas still designated for showrooms and factories. They also issued a violation for work without a permit after finding full height partitions added on the 15th and 17th floors.
To rectify the situation, the owners either have to convert the spaces back to industrial use or apply for a change in the Certificate of Occupancy, agreeing to rebuild the space elsewhere. They can also apply for a waiver under the Hudson Yards rezoning, if they can demonstrate that the conversion wouldn’t harm the industry. Susan Donahue, the building’s property manager, declined to comment on their plans.
The Mayor’s Office recognizes the problem. Last April, it, along with GIDC, launched the Special Garment District Zoning Enforcement Program to inform tenants and owners of the zoning laws and monitor remaining garment companies. Meanwhile, DOB has been identifying illegally converted spaces and adjudicating rule-breakers.
But the initiative, still in its early stages, faces some obstacles. “The biggest challenge is access to the buildings,” said Robinson Hernandez, project manager at the Mayor’s Office for Industrial and Manufacturing Businesses. “With all the building security these days, it’s hard to enter and get onto the floors to see what’s been illegally converted.”
NYIRN and GIDC also blame “Alteration Type II” permits—those for renovations that don’t fundamentally change the use of a space—some of which allow contractors to self-certify their work and bypass inspections. Since 1990, 34 Type II applications were submitted for work done at 330 West 38th Street.
All applications in the Special Garment Center are now being reviewed by DOB, but spokesperson Ilyse Fink said the permit process isn’t the problem. “Applications do not cause illegal occupancies,” she said. “Illegal occupancies are created by landlords or developers who choose to disregard the law, and in some instances perhaps are aided by design professionals and contractors who create questionable or easily convertible layouts.”
Barbara Blair Randall, executive director of the Fashion Center Business Improvement District, said the city should reconsider its approach. “I think the enforcement program is just ridiculous,” she said. “It’s a gesture that’s antagonizing the owners. We don’t want to jeopardize manufacturing in the city. We want to find a mechanism to keep it here, but zoning isn’t it.” Randall would rather see a few large, low-rent buildings set aside to meet the current need for manufacturing space in the area.
GIDC agrees that their work can’t be accomplished through zoning alone. They would also like to see special manufacturing co-ops that allow company owners to buy and occupy the property themselves or have buildings owned by nonprofits that would keep them affordable. “Zoning isn’t an ideal tool,” said Aboulfadl. “It’s a blunt instrument—but it’s better than nothing,”
