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NYC Unveils Plan to Save Fashion Production in Garment District

New York City officials and industry leaders rolled out a comprehensive package of support for fashion production in Manhattan’s Garment District on Monday.

The plan follows recommendations from the Garment District Steering Committee, creating support initiatives, such as a new tax incentive program to preserve manufacturing space in the Garment Center, support for a public-private partnership to acquire a building dedicated to garment production and a special permit to curb hotel development in the Midtown district. The plan also includes a proposal for targeted zoning changes aimed at creating a positive impact on the district.

“Fashion design and manufacturing are both an intrinsic part of New York City’s economic future,” Deputy Mayor Alicia Glen said. “Thanks to our agreement with [Council] Speaker [Cory] Johnson, Manhattan Borough President [Gale] Brewer, and our industry partners, that future will continue to include production in the Garment District.”

New York City’s garment manufacturing industry has lost 95 percent of its workforce since the industry’s peak in 1950, according to the New York City Economic Development Corporation (NYCEDC). In the Garment Center–generally defined as the neighborhood between Sixth and Eighth Avenues, from West 35th to West 41St Streets–garment manufacturing jobs have declined 85 percent since 1987, when the city put in place special zoning regulations to attempt to preserve the industry in the District. It also coincided with the great surge in Asian imports, as the industry sought out cheaper production.

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NYCEDC noted that the fashion industry is still a significant contributor to the city’s economy, employing more than 5 percent of the city’s total workforce. Today, there are about 1,600 garment-manufacturing firms citywide and about 25 percent of these businesses, or an estimated 400 firms, are in the Garment District.

“After decades of previous efforts, the de Blasio Administration has delivered a plan, developed in collaboration with industry stakeholders, elected leaders and the local community, to stabilize and preserve New York City’s historic fashion industry in the Garment District for years to come,” NYCEDC president and CEO James Patchett said. “The city’s iconic fashion industry is critical to our economic health and this package represents a new chapter for the century-old fashion cluster, bringing its long-established businesses and new uses into a modern era that will reinforce Midtown as one of the City’s most vital job centers.”

Johnson noted that there is still a long public process to go through, but he was confident that it will be successful. Brewer said the plan is more than just a tax benefit program, “although the IDA benefits are central.” Also key is a commitment of resources to purchase permanent space, which will “keep the fashion industry anchored here in New York,” she added.

The Garment Center IDA program is a tax incentive package through the New York City Industrial Development Agency (NYCIDA) that will allow property owners to offer long-term, affordable leases to fashion manufacturers, including companies that provide a service that supports the garment-production supply chain, such as pattern-making, embroidery, embellishment and dyeing services. The program requires property owners to offer 15-year leases with a maximum gross rent of $35 per square foot, which includes utilities and other expenses.

In exchange, the participating property owners will receive discretionary tax benefits from the NYCIDA that range from $1 to $4 per square foot of manufacturing space that ranges between 25,000 and 100,000 square feet. To date, NYCIDA has commitments to preserve 300,000 square feet of production space through this program and welcomes additional participation, officials said.

The de Blasio Administration has also committed up to $20 million in city capital to facilitate the acquisition of a building in the Garment District. NYCEDC said the commitment requires a public-private partnership with a non-profit organization to operate and manage the building as a dedicated production space. The city plans to release a request for expressions of interest to advance this opportunity in September.

The plan includes amendments to existing zoning and will be presented for certification into the City’s Uniform Land Use Review Procedure, a public review process that allows local community boards, elected officials, the City Planning Commission and City Council to evaluate and vote on the zoning changes on June 11. The proposed targeted zoning change will maintain existing manufacturing and commercial zoning, lift the preservation requirement of production space that has proven ineffective in protecting garment manufacturers, limit the development of new hotels through a hotel special permit, allow property owners to improve their properties and neighborhood character through new height, setback and signage regulations.

“As a member of the Garment District Steering Committee, what NYCEDC is proposing demonstrates hard work on their part and is a positive response to the working group’s requests and the industry’s needs, and it’s a doable plan, as well,” Steven Kolb, president and CEO of the Council of Fashion Designers of America (CFDA), said. “I believe in it, and am committed to helping it move forward and working with the industry on this.”

The city has also worked with the CFDA and the Garment District Alliance to develop a suite of support initiatives for fashion manufacturers. The package is supported by a $25 million financial commitment by the Garment District Alliance. In addition, the overall program features investments in technology through the Fashion Manufacturing Initiative and additional services to support garment manufacturers and will be available to factories across the five boroughs.

This initiative builds on the de Blasio administration’s commitment to garment manufacturing across the city, including the $136 million investment in the Made in NY Campus in Sunset Park, Brooklyn. This investment aims to create a 200,000-square-foot garment manufacturing hub at Bush Terminal, with small spaces for companies working in pattern making, marking and grading, cutting and sewing, and sample making. The hub will also include shared services and related uses to support the success of these garment firms and the larger Sunset Park garment cluster.