Manhattan’s Garment District Confronts Stark Challenge After Big Rezoning

Laura Weber is really good at what she does.

The founder of LW Pearl Atelier has provided embroidery for international luxury brands such as Gabriela Hearst, Proenza Schouler and Thom Browne. Her intricate couture handiwork adorns dresses that celebrities have worn to countless fashion shows and red carpet events. She even designed the uniforms and jackets that Team Ireland wore for the Summer Olympics in Paris.

Weber’s talent is substantial, but she also credits her success to the location of her West 38th Street studio in the heart of the Garment District, where an agglomeration of niche small businesses and services have sustained New York’s fashion and entertainment industries for decades.

“The Garment District’s identity and global reputation rest on its manufacturing ecosystem,” Weber said. “There are entire businesses that only apply buttons and snaps, cut zippers, and make buttonholes. One business owns a service that in turn is an integral part of one garment.”

Yet, the neighborhood’s hundreds of designers and employees have been increasingly under pressure. 

As new offices and mixed-use conversions sprout throughout Midtown South, industrial tenants have encountered escalating rents and pushback from their landlords when renewing their leases. That has forced some businesses to move more frequently in search of affordable leases, fashion industry advocates said. 

“Each subsequent rezoning, which stripped away protections, makes it harder to find affordable rental space,” said Tessa Maffucci, New York Fashion Workforce Development Coalition (NYFWDC) coordinator. “It erodes the negotiating power these manufacturing tenants have with the property owners.”

Soon thousands more people could move into the neighborhood. The City Council passed Mayor Eric Adams’s sweeping Midtown South rezoning plan in August that could clear the way for approximately 9,500 new apartments across 42 blocks between Fifth and Eighth avenues from West 23rd to West 40th streets by converting offices and building new developments on other lots. The city’s Landmarks Preservation Commission then designated five buildings that could eventually be added to that tally while preserving their historic facades.

But industry leaders also won a significant carve-out to preserve manufacturing zoning  in an area from West 40th to West 35th streets between Seventh and Eighth avenues, despite opposition from the neighborhood’s business improvement district (BID).

The move could delay the encroachment of residential conversions on the 779 garment-related businesses and 5,300 employees in the area. Maffucci acknowledges the work to protect Manhattan’s manufacturers is only beginning.

“Zoning can’t solve all these problems, and it shouldn’t be used for that,” she said. “Promises have been made through the points of agreements, but now it’s a question of how this will be executed.”

The area’s nearly 800 garment-related businesses are largely concentrated in the northwest quadrant of Midtown South where the carve-out was made.

The largest companies have space close to 10,000 square feet and employ around 25 people, but most have between five and 10 employees with 1,000 or 1,500 square feet, the NYFWDC said.

Still, space in Midtown and Midtown South is expensive and growing scarce. Landlords have sought to convert underutilized industrial properties to commercial spaces, where rents can be two to three times as high. The average asking rent for Class A office properties in the Garment District/Penn Plaza area was $92 per square foot while Class B space went for $54 per square foot, according to a second-quarter report from Colliers. Listings for industrial space in the area can range from $30 to $40 per square foot.

Some manufacturers have trickled out of Midtown in search of cheaper rents in Queens’ Long Island City, the Brooklyn Navy Yard, the Brooklyn Army Terminal, and New Jersey. For those who stayed, the agglomeration of businesses in such a dense area, not to mention the access to large freight elevators, remains appealing.

“Many of these businesses who left either close entirely or return to the district because that adjacency is so vital to their work,” Maffucci said. “In spite of so many challenges, it benefits immensely from proximity to Broadway, film and television stages.”

But zoning, as garment industry insiders have learned, has its limits. 

In 2018, the city pledged $20 million to acquire a Garment District facility that would offer affordable leases to manufacturing businesses, but the effort petered out. This year, advocates wanted the city to create a community benefits fund that could purchase a building, but were told by City Council officials that such action was beyond the scope of the land use law. 

They did secure some additional funding. Next year, the New York City Economic Development Corporation will launch a $1.8 million pilot program to subsidize more local production by connecting garment manufacturers with global designers. The city is also recapitalizing its innovation fund with $50 million to help nonprofit organizations acquire and develop below-market-rate space for businesses in the Garment District. 

But the funding isn’t exclusively for the neighborhood, and its impact could be limited.

“It doesn’t seem like one project would get more than a few million dollars, and buildings in Midtown are more expensive,” Maffucci said. “We want to support these independent manufacturers and small designers, but a lot of these programs are geared toward much bigger procurement partners.”

The city’s mixed-use rezoning could more than double the Garment District’s current population of 9,700 people.

For Barbara Blair, who has led the Garment District Alliance since the BID’s formation in 1995, the changes cannot come quickly enough. The district has only 45 residents per acre, compared with 117 per acre in Manhattan overall, and supports about 176,000 jobs.

“Housing is a dire need for the City of New York, and the Garment District is the only neighborhood that doesn’t allow for residential,” she said. “We have the least expensive real estate in Manhattan.”

Business leaders and housing groups advocated for the de Blasio administration to include more housing in its 2018 rezoning of Midtown South, but the city altered zoning rules only to allow for more commercial use and added more homeless shelter facilities. There are currently 16 shelters along Eighth Avenue.

Blair believes that more residents in the neighborhood would create more stakeholders to oppose the city’s concentration of shelters, shop at ground-floor retail businesses, and push for public safety improvements.

“We’ve fought harm reduction, but they were able to dump these facilities all in one neighborhood,” she said. “We were trying to find a new stakeholder group to ensure the resiliency of the neighborhood as well as a robust retail environment.”

Blair strongly opposed the recent rezoning carve-out because she believed there were not enough garment businesses to fill light manufacturing vacancies in the neighborhood, and she did not want to restrict what owners could do with their properties. The BID leader argued that the industry uses 735,000 square feet of space in the neighborhood while the carve-out consisted of 4 million square feet.

“Clustering here is important to the industry, but we’re trying to zone for retaining a sector that’s been diminishing nationally and on a state and citywide basis since the 1970s,” she said. “The forces working against our local manufacturing sector are global forces that cannot be met with rezoning something.”

One subject that fashion industry and economic development leaders do agree on is that Midtown South’s streets need to be safer.

The city’s new rezoning includes several measures that would upgrade major thoroughfares and plazas, including a redesign of Broadway and Herald Square, a protected bike lane on Seventh Avenue, and a busway on 34th Street.

But Garment District stakeholders also want to see the city improve Eighth Avenue, perhaps the neighborhood’s most important passageway. The area between Penn Station and the Port Authority Bus Terminal can get so crowded during rush hour that some people are forced to walk in the street. Mayor Adams has criticized painted sidewalk extensions and the “overuse” of bikes and mopeds in the area.

Street safety advocates, though, want to see more widened sidewalks, daylighting, concrete pedestrian islands and curb extensions, as well as other transit improvements along the neighborhood’s corridors in order to reduce traffic crashes and make walking along the street a less stressful experience.

“Midtown South is one of the densest parts of New York City, and more bike, bus and pedestrian infrastructure is critical to ensure safety and livability throughout the neighborhood,” Alexa Sledge, a spokeswoman for advocacy group Transportation Alternatives, said.