LOOKING TO STEM RENT PRICE EFFECTS
Byline: Leonard McCants
NEW YORK — The apparel industry’s labor watchdogs are beginning to formulate initiatives to stem the effects of rising real estate costs on the garment district’s workforce.
Most notably, the Garment Industry Development Corporation — a joint initiative of the apparel union, government and apparel management — is working with the New York Industrial Retention Network and other labor organizations that are proponents of urban manufacturing jobs to make a proposal for state funding of job retention programs.
Taking a cue from the state and city financing that recently helped the printing industry retain some jobs within New York, the groups are formulating plans for a program that would create affordable industrial rental space within the city and provide relocation assistance.
While no formal application has been made as yet, Linda Dworak, executive director of GIDC, said the groups are aiming for a presentation to state officials by fall.
Several labor groups have also identified a need to create a mechanism that would help retain manufacturing jobs here, since rising rents have pushed several manufacturers outside of the traditional fashion contracting districts of Seventh Avenue and Chinatown. In the past year, 17 Chinatown garment buildings have been emptied of apparel factories and 3,000 workers have been displaced from jobs there, according to GIDC.
“It’s basically a landlord’s market,” said Marc Kritzer, president of Fashion Realty Group, a Seventh Avenue real estate broker.
“These poor apparel companies are getting sticker shock when they go to renew their leases,” he said. “There’s nothing they can do.”
The space crunch has become so severe that there are often tenants like advertising agencies and new technology firms on waiting lists to take space away from fashion companies, when and if they vacate, said John Aquino, managing director of Garrick-Aug Worldwide, another fashion district real estate broker.
“It’s going to get to the point where there will be no space left,” he said.
Showrooms are also being affected in what’s being called a “rental crisis,” as smaller fashion firms are already moving to less-expensive neighborhoods such as West Chelsea, NoLIta and the Meatpacking District.
The problem with that, real estate brokers said, is that some of these vendors may be too untested and unknown to thrive away from the center of the fashion trade. The multitudes of buyers who frequent the area become accustomed to seeing certain resources in the same offices, so if they move across town, accounts could be jeopardized.
The trend has also raised alarms for unions like UNITE, which fears its workers will have a harder time reaching their jobs or lose their jobs to overseas companies.
“Virtually all of these companies need to have their design and sample making readily at hand,” said Carl Proper, executive assistant to UNITE’s president, Jay Mazur.
“If they don’t have that at hand, it makes it that less likely that they’ll produce anything in this country at all,” he said.
UNITE and the other groups stipulate that the city should be looking to preserve the garment center and its showrooms and manufacturing with tax incentives, like ones they have created for financial, sports and media companies that threaten to shift jobs out of the state.
“In this case, these companies really would leave the city and the state,” said Adam Friedman, executive director of the NYIRN.
With relocation costs running in the six figures, and states like New Jersey offering to pay those fees in some cases, several manufacturing firms are making the decision to leave New York.
Proper and others said apparel makers should band together and work with the city to get tax relief and other incentives the government has passed on to large companies.
“Some of the midtown showrooms could use some tax relief,” Proper said. “It would be in the city’s interest. They certainly ought to be as concerned about keeping the fashion business in New York City as the other businesses.”