Brooklyn Navy Yard Study

The BNY is a 300-acre active industrial park that houses over 330 businesses and 5,800 employees, and supports several key industries, including film, media, arts and culture, architecture, and design. City-owned and managed by the Brooklyn Navy Yard Development Corporation (BNYDC, a nonprofit organization with a board of directors appointed by the mayor), the BNY has emerged as a successful model for urban industrial development, with an emphasis on sustainability, that other cities can evaluate and use to inform how they retain and grow industrial jobs.

In an effort to learn more about the BNY and its economic impact, and identify tangible and replicable factors that contribute to its successful functioning, Pratt Center organized an extensive research initiative. For this project, we conducted in-person interviews with board members, staff members, BNYDC executives, and elected officials for information on the history, management, current operations, and political context of the BNY. We also collected detailed information about current tenants through a survey administered over the course of several months.

From the results of our survey, we were able to collect extensive data on business tenure and location choice, employees, growth projection and business activity, and sustainability at the BNY. Our findings also demonstrate specific core elements that are fundamental to its successful functioning. These elements include: mission-driven, on-the-ground nonprofit management; public ownership; consistent City capital; the ability to reinvest surplus and leverage rent rolls; a campus setting with 24/7 entry and security; a diverse tenant base; a commitment to green development; and zoning for industrial land use, making the needs of industrial tenants the highest priority.

We found that the BNY’s economic output for 2011 was $1.93 billion, and was responsible for 10,350 direct and indirect jobs and $392 million in earnings. This economic activity in turn induced another $1.96 billion in earnings and an additional 15,500 jobs. The BNY also contributes construction-related, economic impacts that vary from year to year depending on construction activity. In 2011, BNY construction activity was responsible for $100 million in economic activity, 454 direct and indirect jobs, and over $21 million in earnings. These annual impacts are expected to grow significantly in the coming years as new developments come on line, and by 2015 are expected to increase to $2.35 billion in recurring annual output; over 30,000 direct, indirect, and induced jobs; and $2.37 billion in induced additional earnings.

We also identified cities where the BNY model could be replicated. We focused specifically on Philadelphia, Chicago, and Detroit in order to showcase a range of increasing/decreasing population, geography, and existing elements of the BNY model. In addition to city-specific recommendations for these three cities, our project also offered general recommendations that governments at all levels can use when looking for ways to nurture and expand a nonprofit industrial development sector. These include establishing an “Industrial Development Fund” for nonprofit acquisition and development of industrial space; considering net leasing publicly owned industrial sites, rather than selling them outright; encouraging partnerships between for-profit and nonprofit developers; adapting traditional economic development tools such as tax credits, loan guarantees or other credit enhancements, and bonds so that developers of industrial rental space are eligible; and aligning zoning and land-use policies and infrastructure investments to advance economic development strategies.

The Brooklyn Navy Yard has been transformed from a naval shipyard to a modern industrial park fueled by a culture of innovation, entrepreneurship, and increasing sustainability. Its transformation and success not only offer a viable model for other cities to consider as a strategy to cultivate a strong, local industrial base, but are reminders of the evolving nature of manufacturing—a sector that is fundamentally linked to NYC’s most prominent and creative industries, and should be nurtured through City, State, and federal policies.

To learn more about this project, click here to read our Brooklyn Navy Yard report.