A crumbling industrial site on the fringe of Brooklyn’s real estate boom is becoming a magnet for innovative businesses. Industry City has drawn Fortune 500 companies, technology startups, a professional sports training facility, an ice cream maker, and visual artists to a complex of 15 giant, century-old factory buildings on the Brooklyn waterfront.
“Industry City was my first choice all along,” says Colin Bodell, chief technology officer for Time Inc., which in July announced plans to locate 300 technology and content innovation workers in a 55,000-square-foot (5,100 sq m) space at Industry City.
Other new tenants for Industry City’s 6 million square feet (557,000 sq m) of retail, office, and industrial space include a training facility for the Brooklyn Nets basketball team and a manufacturing plant for MakerBot, the cutting-edge creator of three-dimensional printers. The owners of Industry City have begun a $1 billion renovation. Expansive plans are in the works for new retail spaces and a food court where visitors can see ice cream and pastries being made by local companies like Colson Patisserie and Blue Marble Ice Cream.
“It will become a destination,” says Kathe Chase, director of leasing for Industry City. She gave a tour of the site to about two dozen Urban Land Institute members in August.
Industry City occupies about 40 acres (16 ha) of the original 200-acre (81 ha) site of Bush Terminal, built during the 1890s along Brooklyn’s Gowanus Bay. At its peak, 25,000 workers came here every day to work. A few years ago, Industry City’s 6 million square feet (557,000 sq m) were mostly filled with warehouses and a few manufacturers like Virginia Dare, a flavor creator specializing in real vanilla. More recently, a few visual artists began to rent studio space in the sprawling complex.
Investors and developers Jamestown, Angelo Gordon, and Belvedere Capital bought an ownership stake in Industry City in 2013, joining long-term owners Cammeby’s International and FBE Limited. A $100 million renovation plan began to improve the buildings and modernizes the 150 elevators.
Previously, Jamestown transformed a crumbling, old Nabisco factory in Manhattan into Chelsea Market, a famously successful mix of retail and Class A office space. However, the owners planned to take their time with Industry City, starting with just four of the site’s 16 buildings. “We thought it would be more difficult,” says Chase.
Industry City is far from Brooklyn’s real estate boom. It lies a full mile (1.6 km) from the closest new condominium development and four miles (6.4 km) from Hillary Clinton’s presidential campaign office downtown. “It really is south of what everyone knows: Park Slope, Carroll Gardens, DUMBO,” says Chase, listing a few of Brooklyn’s better-known neighborhoods.
The location is stronger than it first appeared. Transit infrastructure planned when Bush Terminal was a major engine of industry still serves the site, including a subway station that carries passengers to the heart of Brooklyn, one stop away, and to Manhattan, three stops away.
Industry City also has its own exit on the Brooklyn–Queens Expressway. The second-busiest Costco store in the United States is located next to that highway, in between two of Industry City’s giant buildings. The Costco brings more visitors to the area, helping Industry City attract retail tenants like Design Within Reach, which opened its own warehouse store.
Also, New York City helps the property attract tenants by offering a $3,000 tax credit per employee to office tenants that move to places like Industry City from Manhattan below 96th Street. The idea is to keep companies that leave Manhattan from leaving the city entirely. “The city helps the outer boroughs a lot,” says Chase.
“All these big tenants started coming to us,” she says. “Six months into the project, we made the decision to renovate the whole complex immediately.”
In March, Industry City’s owners announced a $1 billion renovation plan to eventually bring 20,000 workers to the site every day. The property is still only 70 percent occupied, up from 60 percent a few years ago, though it has a much greater variety of tenants now.
The spaces there range from creative workshops with as little as 500 square feet (46 sq m) of space to loft spaces to production and manufacturing spaces with more than 100,000 square feet (9,300 sq m) of space. Industry City has tenants paying $15 per square foot ($161 per sq m) as well as those paying $30 per square foot ($323 per sq m). “We need to accommodate both,” says Chase.
The plan now includes Class A office space, manufacturing, big-box retail, smaller service retail, artist studios, and potentially an academic research facility. This past spring, the developers also announced a possible hotel and conference center.
The complex is surprisingly attractive to young people. Every summer Sunday, an outdoor dance party called Mister Sunday draws thousands of people. Industry City also provides places for its workers to spend their lunch breaks. The renovation includes landscaping the courtyards between the giant buildings. Local food companies line the ground floor of Building 2.
“The food court is filled with local, very carefully curated makers,” Chase says. “Each maker along the ground floor has to offer an experience.”
Blue Marble, a local ice cream maker, rents 3,000 square feet (279 sq m). Most of the space is an ice cream factory. Visitors can look through the windows at ice cream getting made for Blue Marble’s other Brooklyn shops. Only about an eighth of the 3,000-square-foot (279 m) space is a retail ice cream shop—but sales from that tiny storefront are strong enough to support the rent for the whole factory story, according to Jamestown.