The Local: Rezoning Anxiety Rends Garment District

garmentdistrict The Local: Rezoning Anxiety Rends Garment District No one knows what Manhattan’s Garment District will look like in 10 years, let alone whether the dwindling economy of designers, factories and suppliers who make up New York’s fashion industry will still be there.

The media has been covering the Garment District’s demise for decades, and lately the chorus of real estate developers lobbying for it to be rezoned for mixed usage, including less manufacturing space, has gotten louder.

No one disputes the gradual hemorrhage of clothing factories, suppliers, and wholesalers from the district under pressure from cheaper imports. But the scale and causes of the industrial decline are less cut and dry, and attitudes within the apparel industry toward a possible rezoning range from staunch opposition to reluctant acceptance.

“People have businesses here; [the rezoning] would be terrible; this won’t exist in 10 years if they do it,” Sylvia Stoller said from behind the counter of the 47-year-old Steinlauf and Stoller sewing supply store her ex-husband’s family started. Shoulder pads and bra inserts are displayed on each wall above zippers and spools of thread. “The government has done enough. They came up with that stupid little plan called NAFTA. They are literally killing the garment industry.”

Ms. Stoller has worked in the Garment District since suppliers were plentiful and “actual manufacturing was being done” 30 years ago.

Back then, she advised customers to turn around their rings and hide their necklaces when visiting the shop on 39th Street between Seventh and Eighth avenues, and eventually told her first boss she refused to venture past Eighth Avenue alone.

Then the crime and grittiness was offset in part by the solidarity of businesses in the neighborhood—on Saturdays designers would open their showrooms to their suppliers, Ms. Stoller recalled—and by being part of an industry at its peak.

“It was exciting here 30 years ago," she said. "We felt like there was something special about the business.”

Larry Geffner, a member of the Save the Garment District Coalition and the owner of a pleating business there, says the real estate community’s claim that there are too few apparel businesses left to occupy the Garment District’s available space is misleading.

 

“A lot of the landlords are not willing to rent to garment manufacturers," he said. "The reality is they purchased the property when the market was good, expecting the area to be rezoned so they could sell it at a profit, and that has not happened.

“It’s true we’ve been losing some vendors, but the real crisis will come a year, two years or six years from now when leases run out and they won’t be able to renew them or find affordable space to move into.”

The city began the rezoning process a year ago and these tensions continue to resurface in the effort to negotiate a solution that preserves the Garment District while accommodating development.

In 1987, the area covering 35th to 40th streets and Fifth to Ninth avenues was rezoned to moderate the conversion of apparel space to office space. Aside from apparel, the area was zoned for a handful of other as-of-right uses, but the regulations required developers who took the incentive of commercial conversion to build an equal portion of apparel and commercial space.

Over the following decade the zoning was not enforced, and some buildings were illegally converted to offices with no space set aside for apparel.
But Magda Aboulfadl, an enforcement project manager for the Garment Industry Development Corporation, said most building owners continued to accommodate apparel use until recently.

In 2005, she surveyed every button shop, factory and design studio for a study that was released the following year, and found that 60 percent of the space in the Garment District was still being used by apparel-related businesses. Factories occupied 16 percent of the total space, and there were 200 pure production spaces.

“Of course, jobs are being sent overseas, but another factor is rising rent and real estate uncertainty overall," said Ms. Aboulfadl. "When I was doing the survey in 2005, it was still common to have handshake leases, but over the last year or so that all started to change.

“It’s like the Garment District suddenly got discovered by the real estate industry. Over the last year and a half there have been a fair amount of sales and that cozy, familiar environment is going, going, gone.”

Meanwhile rents have gone up, up, up. Historically, showrooms have occupied the more expensive avenue properties in the Garment District while manufacturers and suppliers have clustered on the side streets. A few years ago avenue space was about $20 per square foot, while side-street locations ranged from $10 to $16 per square foot, said Mr. Geffner. Avenue property values rose up to $80 a foot so quickly that showrooms were pushed to the side streets, and, in turn, supporting businesses that could not afford to pay $25 to $40 a foot were pushed out.

As property values have risen, some landlords have become increasingly less hospitable to their tenants in the apparel industry. A minority of them are resorting to legal and illegal means to get businesses out before their leases expire.

“First they try every legal loophole," Mr. Geffner said. "When that doesn’t work they’ll cut elevator service, restrict access at odd hours or hire security guards to scare customers away."

The more common trend is a “systematic non-renewal of fashion industry leases," said Ms. Aboulfadl, though there have been one or two cases of landlord harassment. She said the Chetrit Group has filed “frivolous lawsuits” and hired security to deter customers to get tenants in its West 37th Street building to abandon their space before their leases expire four years from now.

“Most [landlords] are choosing not to renew leases, which is their right, but I don’t know what they are thinking, to be honest,” Ms. Aboulfadl said. “Once they get factories out, if they think they are going to get around the zoning, we’ll be watching.”

The city’s Economic Development Corporation did not respond to several requests for comment on what uses the neighborhood will be zoned for.

Though Ms. Aboulfadl is not directly involved with the negotiations, she said, “Residential conversion is not on the table,” but added that she could not speak for the city.

Steve Cohen, the owner of the 70-year-old, iconic bauble emporium M & J Trimming, took over the family business 11 years ago when the area was still “sketchy at night” and he had 60 local suppliers. Now, M & J works with about five vendors in the Garment District who are “either complaining or ridiculously expensive,” Mr. Cohen said.

A picture of 38th Street and Sixth Avenue taken in 1997 shows a Bijoux Galore store in the plot now occupied by the Gotham rental building next door to M & J.

Mr. Cohen’s grandfather started M & J Trimming almost on accident when a friend borrowed $5 and left a spool of lace on the counter of his linen store as collateral, his grandson recounted in the offices of the recently expanded store. A customer came in later and asked how much the lace cost; Mr. Cohen’s grandfather charged her 50 cents, and when the friend returned later that evening to repay him, Mr. Cohen’s grandfather asked for more lace instead.

M&J has somehow managed to thrive as former competitors and factories go out of business and sell their machinery in China.

“I’m not in denial about the fact that a lot of guys are shutting down,” said Mr. Cohen. “No new factories are coming in because it just doesn’t m
ake sense with help so expensive. Not rezoning is almost holding the neighborhood back.”

Mr. Geffner thinks the Garment District is too unique an asset for the city to squander. “Chicago is spending millions to develop a garment center. Meanwhile we’re going to come very close to losing one for the sake of a couple of buildings.”