The Sun Also Rises: Sunset Park’s Booming Artisanal Economy

The Brooklyn Army Terminal plays only a peripheral role in Last Exit to Brooklyn, Hubert Selby Jr.’s dystopian 1964 novel about the Sunset Park and Bay Bridge neighborhoods of Brooklyn. But the compound—still an active base in the book—is the fulcrum around which Mr. Selby’s panoply of broken soldiers, hookers, junkies and hoods circulates.

Last month, the rejuvenated B.A.T. won a major tenant. The artisanal chocolatier Jacques Torres signed for 39,000 square feet in the 95-year-old compound that served as the United States Army’s port of embarkation during World Wars I and II.

“The building has soul,” Mr. Torres said. “When you go there, you touch history. When I visit, I get that cold chill going through me.”

The ghosts of army grunts and the military-industrial complex are not the only historical vestiges that haunt the 4.1-milion-square-foot B.A.T. and the Sunset Park neighborhood that surrounds it. There’s also a residual perception of the forlorn squalor and grit that permeated Mr. Selby’s novel.

“You know, it’s actually not a bad neighborhood,” Mr. Torres said. “You can go there and not get shot.”

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The Brooklyn Army Terminal (Photo Courtesy of NYCEDC)

Indeed, despite being off the radar of many trend-seekers and urban real estate pioneers perennially on the hunt for New York’s next big neighborhood, Sunset Park has become something of a boomtown. Driving its current rebirth—or at least generating much of its press—is a wave of “New Brooklyn” small-batch retailers, light manufacturers and artists’ studios that have made post-industrial Sunset Park once again a place to make things by hand.

Granted, the high-profile contemporary craftsmen in Sunset Park are not producing carburetors but rather making driving shoes (Marc Joseph NY Inc.), locally sourced and toxin-free record cabinets (Urban Green) and organic ice cream (Blue Marble). Their presence, however, has quickly filled up the neighborhood’s bulky supply of manufacturing-zoned real estate.

“I think Sunset Park is the future,” said Christopher Havens, the director of commercial property at Mr. Havens has been involved with loft conversions for 15 years and played a substantial role in the staggering gentrification of Dumbo while he was the director of leasing at Two Trees Management.

“It’s the future of creative commercial space,” Mr. Havens said. “The waterfront is very important—you have work spaces, creative spaces, high value-add manufacturing spaces. The neighborhood landlords take care of people who make stuff, not just computer-screen people like Downtown Brooklyn.” (The social networking site last month leased 8,500 square feet in the waterfront complex known as Industry City, so technology is also welcome.)

There exists about 15 million square feet of warehouse and light industrial space in Sunset Park, which is generally defined as the area between 65th Street, the Prospect Expressway, Eighth Avenue and the East River. There are 3.1 million usable square feet in the city-owned B.A.T, six million square feet in the 16-building Industry City and another 1.1 million square feet in Federal Building No. 2, which the city sold to Salmar Properties in 2011 for $10 million.

Dean Bodnar, the senior vice president of asset management at the New York City Economic Development Corporation, said that the B.A.T. is currently 97 percent occupied, and that an imminent lease should nudge that number up to 98 percent. Two years ago, the complex was approximately 85 percent occupied.

The 220,000-square-foot Brooklyn Wholesale Meat Market, which the E.D.C. also manages, is 100 percent occupied, up from 92 percent just 12 months ago.

“We’ve done a lot of hard work to get to this point,” Mr. Bodnar said.

The E.D.C. jump-started its local efforts in 2007 when it unveiled the Sunset Park Vision Plan, which targeted a district that had “suffered from substantial disinvestment over the past several decades,” with the goal of making it “a 21st-century model for diverse, dense and environmentally sustainable industry.”

The plan benefited from a partly coincidental confluence of factors. “Locavore” was the New Oxford American Dictionary’s word of the year in 2007, and the borough’s nu-artisan boom was on its way to becoming a global anti-brand. In February of that year, The New York Times trumpeted the new-media-driven “(potential) rise of Silicon Alley 2.0.” And, of course, many tech startups and fledgling beard-oil purveyors had been definitively and perhaps permanently priced out of not just Manhattan but Dumbo, Williamsburg and Long Island City.

Alexis Miesen, the co-owner of Blue Marble, said the company had toured spaces in Brooklyn’s hipper precincts before happily settling down in a 3,000-square-foot Industry City parcel.

“We looked at Williamsburg and Red Hook,” Ms. Miesen said. “And those neighborhoods have the cool factor that Sunset Park doesn’t have quite yet. But as long as I get the job done, I don’t care about the trendiness of an area. It’s exciting here. There’s a palpable creative energy.”

Mr. Torres scoured Harlem, the Bronx and New Jersey for potential locations for his chocolate factory before inking a 10-year lease at B.A.T. He was drawn to the monolith by its history, but also by its accessibility—there’s a subway across the street—and the fact that Sunset Park “needed to be redeveloped.”

Even the most idealistic emu egg mayonnaise tradesman would also be drawn to the neighborhood for its relatively cheap real estate. “Honestly, Sunset Park in the last five years has benefited from the fact that light industry has been priced out of places like Long Island City and Williamsburg,” Mr. Bodnar said. “Industrial rents in Long Island City are probably a good 40 to 50 percent—and in some cases 100 percent—higher than in Sunset Park.”

Sunset Park rents, depending on property size and intended use, vary from $6 to $15 per square foot. Public incentives also lure tenants. Mr. Torres, who had never dealt with a city-owned property before, listed low rent, utility costs, taxes and moving expenses, as well as the availability of parking spaces, as among the pragmatic reasons for his leap to Sunset Park. “I’m responsible for build-out, demolition and reconstruction,” Mr. Torres said. “But the city helps with a lot.”

While economics favor area tenants, they pose a challenge to landlords and developers. The Jacques Torres lease aside, many of the tenants cranking out small batches of often expensive niche products lease small spaces. The lion’s share of inventory at B.A.T. comes in 20,000-to-40,000-square-foot servings; the average tech or food startup is in the market for 1,000 or 2,000 square feet. Subdividing space is expensive and often comes at a loss.

“What hinders Sunset Park is that a lot of spaces are large,” Mr. Bodnar said. “The guy who’s making hand-cracked juniper gin in Sunset Park wants 10,000 square feet. But you need guys who are taking down 40,000 or 60,000 square feet at a time.” When it comes to parcels smaller than 10,000 square feet, B.A.T. is 100 percent leased.

As a recent New York magazine cover pointed out, the sustainability of what some deride as Brooklyn’s economy of twee remains to be seen. In Sunset Park, some neighborhood holdouts producing your grandfather’s brawny products—industrial springs, military connectors and backshells—remain. But despite its rebound, deindustrialization’s toll on Sunset Park is clear: between 1960 and 2000, the number of manufacturing jobs plummeted from about 1 million to approximately 200,000.

Like in so many New York neighborhoods, the one constant in Sunset Park is change. It has been known for decades as an exceptionally eclectic emblem of New York’s diversity. Waves of Latino and Asian immigrants led its last renaissance, in the 1980s. According to the Department of Health and Mental Hygiene’s most recent community profile, 49 percent of the neighborhood’s 120,000 residents in 2006 were foreign-born, compared with 36 percent citywide.

But census figures released in 2007 revealed a 17 percent decline from 2000 in the number of residents who did not speak English at home, an indicator of incipient gentrification. Vacancy rates are falling at B.A.T., but it’s less clear whether the job growth is benefiting or marginalizing locals.

“As businesses diversify, you’re getting more people from Manhattan, Brooklyn, even Staten Island and New Jersey,” Mr. Bodnar said. “But I do think it does service a great deal of the local labor pool.”

People familiar with Sunset Park do not see the current improvements running roughshod over the neighborhood’s scrappy immigrant and industrial character. The Sunset Park Vision Plan emphasizes the preservation of an active public waterfront brimming with creativity, manufacturing and—eventually—retail, not luxury residential loft conversions.

Future rezoning could tempt private owners to try to turn the waterfront into the next Battery Park City or Williamsburg. But the brokers, building managers and neighborhood tenants who spoke to The Commercial Observer all thought that Sunset Park would enjoy a revival whose new arrivals burnished the old fabric.

“Everybody wants the latest tech triangle,” Mr. Bodnar said. “And if we wanted to replicate what happened in Dumbo, we’d be focused on 5,000-square-foot leases.”

Mr. Torres, who in 2000 opened his first workshop in Dumbo when the neighborhood was largely devoid of retail, is shocked by that neighborhood’s metamorphosis. Sunset Park, he thinks, will fare differently.

“It will be a better neighborhood, with a more residential feel,” Mr. Torres said. “But those buildings are made to manufacture. They’re talent incubators. The people there have not just found a way to make a living, but a way to live.”

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