Fashion Manufacturing and

Garment Center Strategy

March 2017
Fashion Industry in NYC Today
Fashion is an iconic part of New York, both as
a signifier of culture and as one of the global
centers of the Fashion Industry.

The Fashion Industry is a major economic

contributor to the City:
Over 13,300 fashion establishments, employing
over 182,000 workers more than 5% of NYC
workforce
Over $11B in wages paid
Over $2B in taxes generated
Fashion Weeks various installations generate
NYC Fashion Week
$900M in revenue to the City

Local manufacturing is critical to the overall

Fashion Industry:
Emerging designers (<$3-5M revenue) rely on
local production and are key to NYC design
innovation and competitiveness in fashion
Established designers tend to use local
production for product development, samples
and reorders

Interior of garment manufacturing business

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NYCEDC Fashion Programs
NYCEDC Fashion Programs have committed $15M to the industry through programs
targeting support to fashion design, education, production, financing, and retail

New York City is a global fashion capital. The Citys Made in NY Fashion programs create
and retain quality jobs, catalyze innovation within and across the industry, and support
business and entrepreneurship growth. Our public-private partnerships generate talent
development and education, financing tools, stakeholder convening and networks, and
infrastructure investments.

Awarded $4.8M in loans and grants to 31 fashion businesses

Generated over $500K in revenue for NYC-based fashion brands

Financing
Education Design Manufacturing
& Retail

MiNY Future Fashion Designers & Agents: Fashion Manufacturing NYC Fashion
Graduate Showcase Trade Show Initiative, including Production Fund
(Spring 2017) MiNY Designer technology grants, MiNY Barneys NY x
Fashion Forward / Marketing campaigns manufacturer & CFDA retail capsule
Ladders for Leaders designer open houses, collection
and digital directory
Design Entrepreneurs Waldorf Astoria Pop-up
NYC Fashion Fellows shop for NYC designers
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Fashion Manufacturing Initiative
Partnership with CFDA to support
manufacturing innovation and technologies in:
Industrial & Innovation Grants
Business Development Support & Programming
Retail Partnerships (Barneys NY x CFDA)

$2.3 million awarded to 22 businesses

$85,000 average award amount
$4+ million raised by CFDA/Industry

Examples of FMI-funded innovation &

investments:
3D printers for creating accessories and
embellishments
No sew, heat fusing machinery and techniques
(athletic and outerwear)
Pattern-making and fabric cutting software to
increase yardage yield
Body scanning technology to improve made to
measure techniques
Equipment that combines 2 processes in 1:
laser cutting + embroidery and stitching
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Garment Manufacturing Employment in NYC

NYC-based garment manufacturing NYC Apparel Manufacturing

has experienced decades of global Employment, 1950 to 2010
business competition, which have 400,000
contributed to a steep decline in 350,000
Special Garment
Center District
employment since the 1950s 300,000 Enacted (1987)
250,000
In the Special Garment Center District, 200,000
garment manufacturing employment 150,000
100,000
has declined by 83% since the district
50,000
was created in 1987 -
1950 1960 1970 1980 1990 2000 2010

NYC Apparel Manufacturing Employment, 1990 to 2016

100,000 NAFTA
90,000 (1993)
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
-

Source: U.S. Census; NYS DOL 5

Garment Manufacturing Clusters in NYC
The Garment District remains a fashion hub Density of Apparel Manufacturing Firms
with 400+ firms

However, garment manufacturing has

become an increasingly de-clustered,
citywide industry with 1,568 firms citywide

Designers especially have built small clusters in

SoHo, Tribeca, and the Meatpacking District Garment Center

The industry has found other locations to grow

and thrive across the city:
Sunset Park (100+ firms)
Long Island City (70+ firms)
Chinatown Sunset Park

Brooklyn Navy Yard

East
Williamsburg/Bushwick/Maspeth/Ridgewood

Sunset Park is now the second largest cluster of

garment manufacturing firms outside of the Density of Apparel Manufacturing Firms (1087 total)
Garment District with over 100 firms

As of 2014, there were1,568 garment manufacturing firms citywide.

Source: County Business Pattern 2014
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Industry Outreach
Over the past 18 months the City and the
CFDA have conducted outreach to garment
manufacturers, designers,
showrooms/suppliers, and industry leaders to
better understand the challenges the industry
faces today.

Individual interviews and focus groups with

over 100 companies, individuals, and
organizations identified:
Key barriers to operating in the Garment District
Information on NYCs unique fashion ecosystem
and supply chain
Opportunities to support and fill critical gaps in the
industry
Interest in locating to other fashion clusters, such
as Sunset Park

The City is currently conducting a survey of

garment manufacturers in the Garment District

Garment manufacturers touring Sunset Park

industrial assets
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Priority Alignment & Partnership

A partnership to stabilize, modernize and

strengthen fashion manufacturing in NYC,
based on industry and business needs:
1. Real Estate Stability and Clustering

2. Modernization and Investment in Technology

3. Workforce Development
4. Industry Organization

This unprecedented partnership will exist in

context of:

Nearly $15M investment in fashion industry over

the past five years

Strong fashion interest in Sunset Park, and Sunset

Park landlords seeking garment tenants

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10-Year Future of NYC Fashion Manufacturing Program
Fashion Manufacturing Initiative 2.0
available to all Garment Manufacturers Citywide

Modernization and Enhanced Workforce Industry Organization

Investment in Technology Development and Technical Assistance

Fashion
Manufacturing Apprenticeship Enhanced B2B
Initiative Grant Program Networking

Supervisory Business
Training Planning
Assistance

We Want to Hear From You!

Take the online survey at www.edc.nyc/gmsurvey

Contact us at garmentmanufacturing@edc.nyc

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10-Year Future of NYC Fashion Manufacturing Program
Second Hub Option: Sunset Park
available only in Sunset Park

Real Estate Stability and Clustering NYCEDC currently has 265,000 SF of garment
manufacturing tenants in Sunset Park

Relocation & Expansion Expenses

Brooklyn Army Terminal (BAT)
$100M+ investment

Technical Assistance 500,000 SF of industrial space starting Summer 2017

$16-25 psf; 5-10 yr lease term

Bush Terminal Made in New York Campus

$136M investment
200,000 SF garment manufacturing hub available
Spring 2020
$16-25 psf; 5-10 yr. lease term

Private Market
Additional 2.4 Million SF available today

Industrial space at Brooklyn Army Terminal

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Garment District Today: Recent Trends

Recent trends in the Garment District

Increasingly mixed-use, commercial and manufacturing district

Dramatic increase in hotel development

Declining vacancy rate

Tremendous job growth, particularly in creative economy

Continued but evolving fashion presence with growing office use

Strong need and demand for flexible, step-out office space for small and emerging firms

The proposed targeted zoning change will NOT:

Change the underlying zoning manufacturing remains a permitted use

Increase FAR or height

Substantially alter the existing built environment

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Garment District Today: Existing Land Use

A mixed-use, commercial & manufacturing

district

P1: Predominantly mixed-use

office/manufacturing buildings

P2: Predominantly residential with

substantial concentration of new
hotels

Over 35% of garment manufacturers in district

are located outside of P1 and P2

Dramatic increase in hotel development

Today:
12 hotels = 2,934 rooms
Pre- or In-Construction:
10 hotels = 2,100 rooms

Over 786,000 SF of vacant space has been filled

since 2009 now only 6% of total SF

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Garment District Today: Significant Job Growth

Job Highlights
Tremendous job growth between 2009-2015 (+47%)
Overall employment of 66,000 (2015)
Over half of all employment in creative economy (59%)
Small firms (avg. ~3K SF per firm)
District remains a hub for fashion jobs and firms
$78k average wage (2012, ZIP 10018)

Garment District Jobs & Firms 2009 2015 Change

Total Firms 3,829 4,450 16%
Jobs 44,602 65,702 47%

Creative Economy Firms 1,833 2,296 25%

Jobs 24,066 38,793 61%
Source: Quarterly Census of Employees and Wages (QCEW) 3Q 2009 and 3Q 2015; NYC DCP HEIP Division (2017)

Sample of firms located in the Garment Center:

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Need for Flexible, Small-Scale Office Space
Step-out office space for mid-stage companies represents the greatest need for NYCs
growing sectors

Center for an Urban Future Scale Up New York Report (Nov. 2016):
One of greatest challenges facing small businesses in NYC is securing space necessary to scale up
NYC has lost more than 1.6M SF of Class B and C space since 2000

MN CB 5 Analysis of Class B and C Office Space Study (Apr. 2012):

Unless Class B and C office space is protected and preserved, it very well may cause the loss of
an essential and thriving component of the Manhattan economy the small business sector.

Office Needs by Business Type

Early Stage Mid Stage Established

Small, affordable office (1 to
10K SF); or a co-working
desk/room
Flexible leasing terms (i.e.,
month to month or 1 yr.)
with ability to lease without
credit
Step-out size space (~10
to 30K SF)
Needs conference rooms,
amenities
Variable lease lengths that
can accommodate rapid
growth (2 to 5 yr.)
Flexibility to design/fit-out
Larger spaces (30K+ SF), with
higher rents
Many anchors likely in
range of 50 to 100K SF
Comfortable with longer
term leases (5 to 10 yrs. +)
Flexibility to design/fit-out
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 DRAFT CONFIDENTIAL

Garment District Today: Flexible Office Space

Manhattans Central Office Districts

Garment District building stock has
proven attractive to small and
emerging firms seeking flexible
office space
Historic buildings with smaller floorplates

Excellent transit access

Flex office space is unique for

Midtown Manhattan
Special Garment
Center District

Concentration of
office and commercial use
Subway stations

Midtown Manhattan central office districts

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Fashion Manufacturing and Garment Center Strategy

Two-Pronged Economic Development Strategy

Comprehensive 10 year investment in fashion industry and strategic

industry partnerships

Targeted zoning change to the special district to support continued job

growth and curb hotel development in the Garment Center

Outcome
A stabilized garment manufacturing industry & a dynamic midtown district

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Garment District: Proposed Targeted Zoning Change
The proposed targeted zoning change will:
Maintain existing manufacturing and commercial zoning
Lift 1:1 preservation requirement of production space that has proven ineffective in protecting
garment manufacturers
Limit new hotels through a hotel special permit; prioritizing new office and residential creation
(where permitted)
Continue to allow new residential development and conversions on mid-blocks west of 8th
Avenue (P2)
Allow property owners to improve their properties
Improve neighborhood character through new height and setback regulations

The proposed targeted zoning change will

NOT:
Change the underlying zoning districts

Increase FAR or height

Substantially alter the existing built

environment

Change existing potential for residential

development or conversion

Proposed zoning map

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Next Steps & Discussion

Next Steps:
Continued outreach to industry and community, including in-person and online survey of
garment manufacturers

Continue to work with CB 4 and CB 5

Finalize Future of NYC Fashion Manufacturing package

Take the online garment manufacturing survey at www.edc.nyc/gmsurvey

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Appendix
 Garment Center: Existing Zoning Framework

Original Goal (1987)

Protect apparel manufacturing uses through 1 to 1 office
for manufacturing preservation requirement

Outcome: Ineffective Zoning & Lack of Investment

Rampant nonconforming uses (over 5M SF total)
Inability for property owners to obtain proper building
permits and invest in properties

Preservation Area 1 (P-1) Preservation Area 2 (P-2 ) Outside P1/P2

Manufacturing (M1-6) Commercial (C6-4M) On Avenues:

As-of-right (protected uses): design/ Commercial and residential Office,

showroom/ wholesale (includes uses allowed Commercial,
supplier); retail; manufacturing and
Buildings < 70,000 SF can
Manufacturing
Conversion: Property owner can convert convert as-of-right to
uses permitted
space to general office, but must residential or office
permanently preserve equal amount for No residential
production or warehouse uses*

*Preserved space can be in the same building as converted space, or elsewhere in the district; Requires CPC Chairperson
Certification 20
The State of Garment Manufacturing
Declining Employment Trends
Garment manufacturing in the Garment District has mirrored the steep decline in employment
nationally

At the creation of the Special Garment Center District in 1987, the District had over 30,000 garment
manufacturing jobs as compared to approximately 5,000 today (83% decline)

Garment
Change
Manufacturing 2000 2009 2015
Employment in SGCD
2000 2015

Firms Jobs Firms Jobs Firms Jobs Firms Jobs

Special Garment
934 13,607 497 6,182 438 5,123 -53% -62%
Center District
SGCD: Preservation
536 6,793 319 3,761 286 3,022 -47% -56%
Areas
SGCD: Avenues 398 6,814 178 2,421 152 2,101 -62% -69%
Source: Garment District - Quarterly Census of Employees and Wages (QCEW), 3Q 2000, 3Q 2009, and 3Q 2015; DCP HEIP Division (January 2017)

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The State of Garment Manufacturing
Loss of Production Space
Zoning has not been effective tool to keep up with globalization trends or market demands

There was roughly 9M SF of production space in the 1980s; today, only 830K SF (90% decline)

Only 2% of manufacturing space actively preserved via the preservation mechanism since 1987

Over 5M SF of non-compliant office uses in the district

Percent
Garment Manufacturing Space in
2009 2014 Change,
Garment Center District
2009 to 2014

SGCD: Preservation Areas (SF) 1,047,538 830,053 - 22%

Source: Garment District Alliance Tenant Survey (2009, 2014)

In P1 and P2, production space has seen a 22% decline from 2009-2014

In the overall Garment Center BID, production space has seen a 52% decline from 2002-2015

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Sunset Park Options Private Assets
There is also 2.4 Million SF of available industrial space in private sites (CoStar)

Sunset Park Garment Cluster

Historic cluster of garment industry
Second largest cluster of garment
manufacturing firms in the city, outside of GC
Over 100 firms; ~1,700 garment workers

Private Assets
Units ranging in size from 1,000 SF to 50,000 SF
Rents from $16-34 psf; 3-10 yr. lease terms
Large private landlords actively seeking
garment manufacturing tenants for newly
renovated space
Industry City already has 325,000 SF occupied
by fashion and garment manufacturing tenants

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