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Garment District Holds On By Thread, No Thanks to NYC

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So there's a sort of weepy piece in the NYT today about the Garment District and how it's facing extinction. "Owners say they are caught in a vise between declining retail sales and landlords eager to find better-paying tenants," writes Charles V. Bagli. The issue concerns manufacturing: namely, that if the rest of the manufacturing facilities left the district, designers would too, and then there would be no more Garment District. To help stop this possible migration, the Bloomberg administration is pondering designating at least a few buildings as manufacture-only—while perhaps doing away with other longstanding zoning restrictions in the district. That duality, however, has riled up a special Curbed operative, who sends along his take:

The City just showed all their cards and this proposal will be DOA. I think it's pretty obvious that this non-profit they want to establish to operate the building(s) they want to preserve would have to be bought first (unless we're talking imminent domain, but I don't think that's the case). The zoning laws passed to preserve the manufacturing depressed property values. If the city were to have approached it as a developer, they would have had the council threaten even more stringent zoning regulations. Then, they would have set up an LLC and finance it from one of their slush-funds. With the threat of stiffer zoning regs. looming, the LLC swoops in and picks up a couple buildings on the cheap. Mr. Gural sums it up best: "But Eric Gural, a managing director of Newmark Knight Frank, a real estate company that owns five buildings in the garment center, favors the idea. Lifting the zoning restrictions, he said, would immediately increase the value of the properties, far more than any tax to preserve manufacturing. “The bang for your buck is enormous,” he said."

No shit it would be nice bang, but now that I know you're going to probably lift the zoning regulations, then I'm not going to be the dopey owner who sells right before an imminent spike in real estate prices? Because I now know that, under the proposal, you will be "eliminating zoning restrictions" I have no incentive to sell, unless it's done after the zoning restrictions have been eliminated--in which case the city grossly overpays.

I'd say the city could have played their cards a little better.

· NYC Seeks to Shore Up Garment District [NYTimes]