In The Navy: Andrew Kimball and Brooklyn’s Morphing Manufacturing District
Carl Gaines March 7, 2012, 10:30 a.m.
As the entertainment and media bubble grows, Andrew Kimball’s head begins to hurt.
“It makes me crazy when I hear an economist report on the sectors in the city and the manufacturing bubble is always shrinking,” said Mr. Kimball, president and chief executive of the Brooklyn Navy Yard Development Corp., the nonprofit tasked with managing the 300-acre site for New York City, which owns it. “But you see right next to it the entertainment and media bubble and those are expanding.”
It was drizzling out and he had driven over from his office on the other side of the yard—such is the size of the place—to meet The Commercial Observer in the lobby of the Brooklyn Navy Yard Center’s Bldg. 92, which houses a visitor’s center, offices and a café.
To this point, in the New York State Department of Labor’s most recent “Significant Industries” report for the city, manufacturing doesn’t even make the cut. The report identifies significant industries on the basis of several metrics, such as job growth and wage levels. Twelve are listed—among them broad categories like professional and technical services and food and beverage stores.
Mr. Kimball drove The Commercial Observer around the massive yard and the reason for any frustration became readily apparent. He pointed out the building where sets for Saturday Night Live are constructed and pointed out where Duggal Visual Solutions manufactures lighting. The list of tenants seemed endless, as does the list of those on the waiting list for space.
“The amazing thing is that we’re not only full,” he said, “but we have a waiting list of at least 100 businesses that want to get in to the Navy Yard.”
So it seems that manufacturing is alive and well, just not quite the way you might imagine, or romanticize it.
“It’s a new kind of manufacturing—it’s mostly driven by the creative class, highly educated folks, who went to school in New York,” Mr. Kimball explained. “And they want to make something near to where they live.”
Mr. Kimball, 47, oversees a $30 million annual budget at the Brooklyn Navy Yard Development Corp. and his main task, as he’ll tell you, is to get buildings up. “Eighty to 90 percent of my job is figuring out how to get up new space,” he told The Commercial Observer.
Toward that effort, there are 12 new green industrial buildings in design, under construction or newly completed around the yard. They’re leased by a team of five in-house agents. The tenant base, diverse in nature, pays a range of rents—from roughly $8 a square foot up to the mid-$20s, based upon the condition of the building.
After redefining manufacturing, getting buildings up may be his main task but there’s a great deal of unspoken bridge building taking place as well. Negotiating the Navy Yard’s interaction with the community that surrounds it has been more important than ever, since the federal government transferred the buildings on Admiral’s Row to the BNYDC in January. A new RFP has been issued for a developer for the 6.08-acre site to build a supermarket topped by floors of light industrial space, neighborhood retail and “potentially a small amount of community/nonprofit office space.”
Prior to being appointed head of the BNYDC by Mayor Bloomberg in 2005, Mr. Kimball had been director of operations for NYC2012, the privately funded bid for the 2012 Summer Olympics. Though London ultimately won out, he said he’s proud of the process. He added that “the bidding alone fast forwarded projects,” such as the Atlantic Yards. “Those rezonings have unleashed massive economic activity for the city,” he said. And then, “Obviously I drank the Kool-Aid.” He spoke in glowing terms of former deputy mayor for economic development Daniel Doctoroff, who founded the bid prior to joining the Bloomberg administration.
He considers Mr. Doctoroff a mentor, he said, along with another former boss—Paul LeClerc, the recently retired president of the New York Public Library. Mr. Kimball was vice president of the New York Public Library from 1993 to 2001 and, he said, “raised about $250 million for a series of branch libraries,” which in turn got him into “restoring beautiful, old Carnegie branch libraries.” His energy level seems to rise when talking about the power of public-private partnerships to positively impact members of their communities—like the central library in the Bronx that went up partly due to his efforts and is now, he said, “phenomenally used.”
Not surprisingly, given his stint at NYC2012, another subject that gets him going is sports. Seemingly nimble of mind and body, he plays tennis a few weeknights and on weekends in a league at Prospect Park, not far from Park Slope, where he lives with his wife and two young sons.
“I’ve actually had five knee surgeries now from all of my sports activities,” he said (soccer is a passion as well). “I just had my second reconstruction a year ago and I’m back to playing two or three times a week.” Asked if he’d take on a role at another bid effort to bring the Olympics to the city, he laughed and said that he wasn’t sure that his wife would let him because he “kind of checked out for two years,” for what was really a seven-day-a-week job.
As for his move to the BNYDC, he said he saw it “as a really unique opportunity to help redevelop an underutilized area of the city that had this unique mix of historic buildings and tremendous history.” Upon his arrival, the yard was already nearly full.
Credit is readily given to his predecessors for figuring out that the yard’s niche market had changed. They realized, he said, that big manufacturing was gone. Efforts to bring an automobile plant or a steel plant had failed but light industrial businesses thrived, grew and gobbled up more space there.
Despite pulling in tenants, though, there had been no public investment in the place in nearly 50 years. Mr. Kimball was met with rotting sewer and water lines, crumbling piers and a lack of electrical infrastructure. So his team convinced the city that they had a business model that was working. The Bloomberg administration began investing, but asked that the BNYDC find a private model to get up new buildings.
“That’s led to $250 million of public investment that we’ve leveraged for well over half a billion dollars of private investment just for new buildings alone,” he said, adding that companies also invest in their buildings.
Still, finding ways to put up new buildings—and to create more leasable space and jobs—has required creative thinking. “There’s a reason that you don’t see a lot of industrial buildings getting built in the city and it’s not because there isn’t demand for that space. It’s because it’s very hard to make the economics work because it’s the lowest return form of real estate.” Industrial tenants pay less rent but there are very few financing tools available, he added. “If you look at affordable housing, there is a very broad range of tools available. If you want to put up industrial space, it’s very, very difficult.”
One boon for the yard has been the federal government’s EB-5 program, or Immigrant Investor Program. Created by Congress in 1990 as a way to stimulate the economy, it gives green cards to foreigners who invest a minimum of $500,000 in a geographic area. Mr. Kimball pegged it as “probably the most creative thing we did.” They’ve already borrowed $60 million to jumpstart projects, he said, and they are looking to borrow another $40 million.
Cruising through the yard in Mr. Kimball’s SUV, we climbed a slight hill parallel to Flushing Avenue on the western end of the yards, and entered an area that is also of concern from a fund-raising perspective—the media campus. Yard tenant Steiner Studios, already expanding on adjacent lots, plans to expand onto the site, putting up additional sound stages and bringing a graduate film program there with an educational partner.
Along with the Admiral’s Row project, these are incremental steps toward being more outward facing for an entity whose future actually depends upon remaining separate.
Mr. Kimball said that he wants to figuratively break down the Navy Yard’s walls, while literally keeping them up, so tenants know they can make noise there, avoid having their trucks ticketed and invest in the place themselves, knowing there is some long-term certainty about zoning.
With the RFP out for the Admiral’s Row project, Mr. Kimball said he hoped to have good news to share by the end of April. He added that, in his six years at the BNYDC, Admiral’s Row had been “the most vexing, difficult project.” When he arrived, some cautioned to avoid it. “There were people who said, ‘Don’t touch it—it’s going to be a nightmare anyway you cut it,’” he told The Commercial Observer. “But I was hired to get stuff done here, and I’ve got a great team and we like to have a lot of balls in the air.”
He predicted that, in the end, when all is said and done, “Admiral’s Row will be one of the great success stories of the Navy Yard for redevelopment because of the marriage of industrial space, retail and historic preservation.” He also downplayed any potential drama about worlds and pricing expectations colliding at the supermarket.
It will sit, after all, between nearby NYCHA public housing and Dumbo. However, Mr. Kimball pointed to Red Hook’s Fairway as an example of a supermarket that has met such a challenge.