The New York City Economic Development Corp. on Friday launched the NYC Industrial Developer Fund, a $150 million public-private fund to provide project financing for industrial real estate development projects in the city.
The fund is designed to spark investment in 400,000 square feet of new or renovated industrial real estate workspace across the city, supporting the creation of as many as 1,200 industrial jobs by 2020, said NYCEDC , the city’s primary vehicle for promoting economic growth.
NYCEDC also revealed the six winners of the Futureworks NYC Growth Initiative, each of which will receive $30,000 in funding over a two-year period to finance their growth in one of the city’s advanced manufacturing spaces. The two initiatives stem from Mayor Bill de Blasio’s and City Council Speaker Melissa Mark-Viverito’s action plan to modernize the city’s industrial policy. The plan is aimed at ensuring that businesses have the space to grow and evolve, preserving and creating good jobs.
Among the winners was Crated Inc., which develops textile wearable technology. The company plans to set up a small manufacturing facility for printing circuits onto textiles called Kontinuum Cloth.
The others are Adam Frank Inc., which invests in, designs and manufactures products and installations for the built environment; BotFactory, which produces a product called Squink, designed for circuit prototyping; Pensa, which has developed a new archetype for digital fabrication; Poursteady, which manufactures and markets an automated “pour-over” coffee machine, and Sun House Designs, a manufacturer of software and hardware for musicians.
The Growth Initiative will also help companies apply for sales tax exemptions through the city Industrial Development Agency’s Accelerated Sales Tax Exemption Program to reduce the cost of purchasing equipment. During the program, companies will be asked to provide NYCEDC with information on a quarterly basis about their evolution, performance and challenges faced, and will be asked to make efforts to attend Futureworks NYC events and discussions.
“Our future is about making New York City the world capital of commerce, culture and innovation,” said Alicia Glen, deputy mayor for housing and economic development. “Advanced manufacturing is a critical piece of our 21st century economy and we’ve taken a comprehensive approach to activating industrial assets, deepening career training and making sure new firms have the space and capital they need to hire up and grow.”
The fund was first unveiled by de Blasio and Mark-Viverito in their Industrial Action Plan in November. NYCEDC on Friday released a Request for Proposals for non-profit developers in search of financing to create or renovate industrial space across the city. The fund will ultimately consider nonprofit and for-profit entities.
The fund provides qualified real estate developers with partial public gap-financing assistance in the form of grants, low-interest subordinate loans and guarantees on senior private loans, in order to leverage owner equity. The $150 million fund includes about $60 million in public funds, leveraging $90 million in private financing. Qualified projects seeking fund support will be considered when high impact projects are unable to move forward due to funding gaps.
NYCEDC noted that the industrial and manufacturing sector has faced serious challenges in recent decades. These include global macroeconomic trends that have shifted U.S. manufacturing jobs abroad, as well as heightened local competition within the city for real estate for residential and commercial uses. These local factors have disproportionately hurt industrial businesses by reducing the supply of industrial real estate while increasing rents and building ownership costs. The fund supports the city’s industrial businesses and workforce by catalyzing new supply of industrial real estate that directly supports industrial jobs.
The Industrial Action Plan includes a series steps that are projected to generate more than 20,000 new jobs and support the city’s existing 530,000 manufacturing and industrial jobs. Among them is an effort to create new models for flexible workspace and Innovation Districts.
In discussing City Hall’s and the NYCEDC’s Made in NY initiative to boost New York City manufacturing in the fashion sector, Glen said last month that the next big issue is to develop a broad, scalable solution linking manufacturing and showroom, what she called a “place-based approach to where the industry is going and not where it was.”