The Bridge

When a Business Arrives, What Does It Owe the Neighbors?

Developer Kane, far left, talked about the benefits of reaching out to the community: "For us, it was getting to know them early before starting the project" (Photos by Gretchen Robinette)

When a powerful company arrives in a neighborhood to construct a new building or set up shop, what does it owe the community? Can these new investors bring useful amenities rather than merely displacement of the current residents?

In kicking off a panel discussion on the issue at the From Day One conference on Sept. 13, Tucker Reed, co-founder of the real-estate tech and development firm Totem, read from a Washington Post essay making the case that today’s highly charged arguments about gentrification also tend to be oversimplified. “The more useful question isn’t whether ‘gentrification’ is good or bad,” the Post writer asserted, “but what it might look like to have new investment in a community that benefits existing and future residents alike.”

The panel brought together experts from multiple points of view on the issue, including real-estate development, community activism, and government, at the conference co-produced by The Bridge. Among their insights:

Nonprofits: Say More Than ‘No’

Local nonprofit groups need to make their voices heard when it comes to new real-estate developments. “What is it that your base needs and wants?” is the mantra cited by Rob Solano, co-founder and executive director of Brooklyn-based Churches United for Fair Housing. “It’s not an ego thing, it’s not a me-against-him thing. Once we know who we are and who we represent, it’s easy to know what to advocate for.”

Panelist Rob Solano (center), with moderator Tucker Reed (right) and Terence Kelly, corporate-affairs manager for Con Edison, at the conference

Developers, for their part, need to listen to what matters in the community. Churches United seeks to bring developers into neighborhoods to hear firsthand from community members.

As for the nonprofit groups representing them, it’s important to not be simply obstructionist, of the NIMBY variety. Just saying no may feel empowering, but is counterproductive, Solano said. “When you do that, first of all, nobody respects you, nobody wants to talk to you and, ultimately, nobody gets what they want,” said Solano. The best solution for the community? Being proactive. “You have to take a seat and then come up with what is the best project,” said Solano.

Respect Is the Word

Participation, respect and stability are a concern on all fronts. “Some of the primary issues we’re hearing from developers is, ‘How do I move through a space and a neighborhood with respect?’” said Rebecca Karp, founder of the urban-planning consultancy Karp Strategies. “For community members, it’s ‘Will this new project shake the core of how I can bring security to my family?’”

Community members have an emotional as well as financial attachment to their neighborhood; they’ll more willingly share the space if they feel the newcomer is acting in good faith. “Get to know the community, who the community leaders are. These are gonna be your neighbors,” said Karp. “If your project and your vision becomes a shared vision, the financial return will speak for itself.”

Elected officials typically take on the role of mediator, particularly when development projects involve rezoning. “We can have growth and development next to respect for the community,” said Robert Cornegy Jr., the City Council member whose District 36 includes two rapidly gentrifying neighborhoods: Bedford-Stuyvesant and north Crown Heights.

Cornegy, who has chaired council committees on both small business and housing, said one of his goals with new developments is to make sure they include affordable commercial space for local businesses. He cited one case in which he persuaded a developer to divide one of several large new retail spaces into five, 1,000-sq.-ft. storefronts at below-market rents for local businesses. 

Reed asked Cornegy if he basically created a commercial rent-control pilot program in his district. “Yes, it was something new,” responded Cornegy.

Mind the Manufacturing Industry

The construction of upscale housing isn’t the only flashpoint in the gentrification battles. In working-class neighborhoods like Sunset Park, some residents worry that when new companies move in, too many of the new jobs will be tech and information-industry roles, rather than more accessible manufacturing jobs.  

The Brooklyn Navy Yard, which plans to more than double its employment by 2020, to 17,000 jobs, puts a heavy emphasis on manufacturing. “We have the privilege of being a nonprofit, which allows us a lot of flexibility,” said Clare Newman, chief of staff and EVP at the Navy Yard.  

“As a mission-driven organization, we’re focused on creating high-quality, accessible jobs and supporting manufacturing businesses that really cannot compete with tech-tenant rents,” she said. Instead of seeking the highest-possible rent for a particular space, Navy Yard officials ask themselves, “How can we price our real estate in a way that’s affordable for manufacturing?,” Newman said.

The From Day One conference at BRIC House in Downtown Brooklyn drew 300 participants (Photo by Sammy Oge)

Jeremiah Kane, senior advisor for Brooklyn at Rubenstein Partners, co-developer of the new office building underway at 25 Kent Ave. in Williamsburg, said the company is including about 80,000 sq. ft. of manufacturing space in the building, partly as a bridge between the neighborhood’s industrial past and tech-driven present. “There are still a lot of manufacturing jobs, but they’re under a lot of pressure to leave, sell their businesses for their real-state values,” Kane said.  

Having manufacturers at 25 Kent was encouraged by local nonprofits and advocates in the neighborhood. “For us, it was getting to know them early before starting the project: sitting down, having conversations, talking about what the needs and pressure points were,” he said.

That said, it’s important not to frame a respectful business initiative as a charity, said Newman. “It’s [about being] thoughtful about how you’re approaching development in your community in a way that’s beneficial beyond getting through the approval process,” she said.

New Opportunities for Brick-and-Mortar

Many local retailers have seen their businesses battered by a powerful force from outside the neighborhood: Amazon and other e-commerce giants. However, the pressure from those companies on brick-and-mortar stores has had at least one positive effect amid all the disruption: the market won’t support the continuously rising rents that many landlords have been seeking in upscale neighborhoods.

That effect has begun to provide opportunities for surviving businesses and new entrepreneurs, said Karp. “I have several clients who are in the retail business where, because of the Amazon impact, there are so many vacancies and existing retail spaces. It’s like a buyer’s market, so they’ve been able to aggressively expand in a way they never thought possible,” said Karp.  

The other tech-driven disruptors, shared-economy companies like Airbnb and Uber, have produced plenty of controversy about their impact but generally can be a benefit to working-class neighborhoods by providing opportunities for jobs and extra income, said Cornegy.

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The council member said he plans to kick off a “Shared Economy Weekend” next month, including discounts to encourage citizens to patronize both the new businesses and established ones. The idea is to “demonstrate how we can take advantage and create new jobs by marrying the new way of doing business with the old way of doing business, through brick-and-mortar,” he said. 

Defining Gentrification Is Challenging

Ultimately, there is a problem with the black-and-white thinking about new investments in neighborhoods. Not all businesses are alike in the benefits they may bring. A chain supermarket or drugstore may be culturally uninspiring, but can bring convenience and competitive prices to an underserved neighborhood. An overpriced wine bar or coffee shop, by contrast, may mostly benefit newer and more affluent residents.

Nor can gentrification be defined primarily in racial terms, said Cornegy, who talked of a conversation in which a citizen asserted that the council member, an African American and native Brooklynite,  is a gentrifier too. “You have an advanced degree, you make a certain amount of money, you own your brownstone,” Cornegy said he was told. “Because of you, prices are different. Because of you, there’s a different demand and need for services.” Concluded Cornegy: “Gentrification transcends color. It’s more about perceived socio-economic status. Community can be splintered in several different ways not based on ethnicity.”