Garment District entrepreneurs fear proposed zoning changes

Nationally known costume maker Helen Uffner, of Vintage Designs Limited, stands alongside parts of her collection.

Last month, Amanda Burden, director of the New York City Department of City Planning, told a Valentine’s Day business leaders’ breakfast that impending zoning changes in the Garment District would soon allow more conversion of the area’s light manufacturing space to other uses. As the department begins to share some of its proposed changes with local community boards, those likely to be most affected are taking note—especially the District’s small businesses.

While city planners and local building owners note the shrinking of local mass production due to outsourcing and bemoan an exodus of young designers to Soho, local entrepreneurs, unions and the Garment Industry Development Corporation say that the local industry is successfully adapting with new business models but that this adaptation is now threatened by the loss of their spaces as landlords refuse to rent to them. And many of them ask whether New York is serious about wanting to preserve the district, or whether it will soon be mostly a fond memory.

Cavazza, whose father and grandfather were also in the garment industry, graduated in 1987 from the Fashion Institute of Technology and founded Create-a-Marker five years later. In 1997, he moved into his current space, where a wall of computers helps drive the patterns he and his employees create for a range of young designers. Over the past 14 years, his business has grown from Create-a-Marker’s original three employees to the current 35, most of whom are immigrants, he said, just like his grandfather. In the back room, his second business, Midtown Paper, which grossed $1.1 million last year, supplies specialized paper for more than 100 industry clients.

But Cavazza’s success is also made possible by his $10-a-square-foot rent, which is about half the $20 going rate for production-oriented factory spaces in the district—let alone the $25 to $30-per square-foot spaces offered by the few landlords who will talk to him, let alone the $35 to $45 going rate for office space in the area. “I can’t find anything for less than $28,” he said. “And I’m not sure I can make that work.”

A proud history still lives

Sarah Crean, of the Garment Industry Development Corporation (GIDC), says that is an increasingly common lament. Local brokers tell GIDC, “Why should a landlord do that [rent to a factory]?” Crean’s group, which provides a range of services to local businesses and workers, has been “talking to the city” as they consider the latest round of changes, she said, hoping “to persuade them to accommodate as much of the current production and suppliers as possible” in their vision of a new Garment District.

Many readers know the district from media images disseminated in productions like “The Devil Wears Prada” or “Project Runway,” but the reality is far grittier: loud sewing or embroidery machines, patient men pushing heavy racks of dresses or bolts of cloth down city streets, young and elderly women alike bent over tables doing beadwork. At its height, in 1939, the industry employed over a half-million workers in factories as well as suppliers and craft shops; now, with most sweatshop production moved offshore, especially to India and China, the workforce is down to 150,000, many of whom specialize in what Crean calls “a higher level of service to the designer,” although New York’s share of the global fashion industry has actually increased.

In 2006, New York’s garment industry reported $47 billion in sales—compared with $4.9 billion in for Los Angeles, $29 billion for Paris, and $3.9 billion for Milan; New York also now hosts seven out of the 10 largest fashion companies and 82 percent of the showrooms where buyers make their choices. As design and wholesale services increased, the district has shifted: Instead of hundreds of seamstresses pumping out blouses, entrepreneurs deliver specialized samples, repairs, and detail work, or serve as a bridge between designers an overseas manufacturers, as Create-a-Marker does. Meanwhile, more than 200 factories in the district continue to produce trim, buttons, buckles and couture garments at a steady clip. Many of those businesses, too, face the same dilemma as Cavazza: They can’t get or renew their leases, despite New York’s laws meant to attract such businesses.

The Special Garment District was created in 1987 to preserve New York’s manufacturing base amid surging rents. The District runs from the north side of 35th Street to the south side of 40th Street, from Broadway in the east to Ninth Avenue in the west. Buildings on the side streets are further tagged as a “preservation area”; owners of buildings on these streets can only rent space to non-manufacturing, non-apparel businesses if they set aside an equivalent-size space for manufacturing, whether it’s apparel-related or not. As a result, many showrooms have sprouted “sample shops” that qualify as production space, and as mass-production has continued to decline and real estate pressures increased, some landlords have taken it upon themselves to bend the rules.

A 2001 study from the New York Industrial Retention Network found a significant amount of questionable conversions to office space, saying that landlords often apply using a “self-certification” process without mentioning that the floor was designated as preserved space. Since that 2001 study, New York’s economy has rebounded, real estate values more than doubled, and both DCP and GIDC confirm that such conversions are still going on. Meanwhile, the western portion of the District has been incorporated in the 2005 Hudson Yards rezoning, which exempted buildings smaller than 70,000 square feet from the preservation requirements.

In other words, for businesses west of Eighth Avenue, as well as those on all the avenues of the District, the future is now; if zoning in the rest of the district is similarly relaxed, local producers fear for their future.

28 years and three emmys

Costumer Helen Uffner, of Vintage Designs Limited, has been in business in the district for 28 years. One of the only costume designers serving the movie industry still left in New York, Uffner spoke to Chelsea Now in her studio at 345 West 38th Street, amid the many Broadway and movie costumes her studio has made. “We did ‘Capote’…here’s Far ‘From Heaven,’” she said, lifting a suave summer skirt. “We did ‘The Producers.’” On one wall are certificates from the three Emmy Awards commending her work.

Uffner moved into her 4600-square-foot space in 1998; she was its first non-owner tenant and got Woody Allen’s design company to inhabit the floor above her. Last year her rent went up 40 percent and now costs her about $70,000 a year—at a still-reasonable $13 a square foot. But her building has been subject to the Hudson Yards zoning rules since 2005. Now, she said, less than a year after her 2006 rent increase, her building is about to be sold to a major real estate developer and torn down, to make way for a residential high-rise.

Uffner has until Memorial Day to move her 72,000-costume inventory and her equipment out of the building—and she can’t find an affordable space. Like Cavazza, she said she has been turned down by numerous landlords, simply because she worked in the garment business.

Manhattan realtor Robin Brooks, who specializes in commercial buildings, told Chelsea Now last week that over the past six years, she’s found it more and more frustrating trying to place garment-related businesses. “There’s been a fundamental change in the geography of commercial real estate in the city,” she said, one that militates against small business.

When she called landlords in manufacturing-oriented buildings in the District, Brooks reported, she was told over and over again, “We’re holding off for the time being on doing any leases.” Brooks then began to ask, “Is it because of the [pending] rezoning?”

Finally, she said, “one of them kind of muttered, ‘Yeah, basically.’”

Even before the Feb. 14 announcement from Planning Director Burden, word was out on the street that DCP was coming up with plans to allow more office space, and even hotels and bars—all more lucrative than the $18 to $28 a square foot commanded by factories. A quick look at Costar, one of the city’s major listing services for commercial real estate, tells the story: On the 300 block of West 37th Street, for example, raw space can go for $27 a square foot, with office space at $31 and up.

“I cannot find a $19 space in this town,” said Brooks. And if she can’t, neither can entrepreneurs like Uffner and Cavazza. At this rate, she concluded, “I have serious concerns about the continued viability of small business in New York City.”

Landlords wait, dcp listens

The Department of City Planning is going on a listening tour to hear such concerns. Within the past month, representatives from DCP have visited community boards, presenting a fairly well-developed set of zoning proposals “to see how the community feels.” These proposals, which Chelsea Now will examine in more detail in an upcoming article, acknowledge that current practices have not fulfilled the goal of preserving manufacturing in designated buildings; charge that the area, in its current state, is run-down and unattractive, and is driving young designers away; and propose that a portion of the space currently designated for manufacturing be zoned for office space, hotels or entertainment, with unspecified “incentives” for landlords to maintain manufacturing in selected buildings.

The business owners in this story protested loudly at Community Board 5’s Land Use and Zoning Committee hearing last week, saying the proposals are “a gift to landlords.” They all agreed that if those “incentives” were different and the preservation rules better enforced, the city would see a growing garment sector, not a shrinking one.

Samanta Cortes, president of Fashion Design Concepts, at 242 West 38th Street, says her business—one of those serving designers directly—has doubled every year since she started in 2000 with “two sewing machines and Lily, my bookkeeper.” Now she has more than 10 employees and grosses more than $500,000 a year, serving high-end and younger designers with patternmaking, embroidery, and handworked details. The day Chelsea Now visited, one employee was generating trim for a major designer—a row of pale dolphin shapes on blue cloth—and Cortes was working with another on ways to fix a sleeve after a note had come back to the designer from China proclaiming: “All wrong.” A curly-haired young woman named Stefania, the designer’s representative, sat at a small table looking at each sample. “I’ve known Samanta for years,” she said, holding up the rejected sleeve. “This is just terrible, but I knew where to go to fix it.”

Unlike the others interviewed for this story, Cortes does have a lease, but her rent went up 35 percent this last year, making her wonder if she will have to let go some of her team. “There’s this one woman I might lay off—she does beadwork, she’s old, she does it to feed her family…it’s hard!” For now, she’s reduced the woman’s hours, but the increased cost is already eating at her modest, if relatively stable, bottom line. And she worries about what will happen in six years, when her lease expires, if in that time the area has begun to sprout glitz and hardwood instead of simpler spaces. “Times Square is moving this way,” she said. “They’re already moving into the avenues—so the showrooms are coming to the side streets. If hotels come, too, where are we supposed to go?”

There will be numerous more meetings on this issue, from community boards to a separate meeting GIDC is planning between DCP and the fashion-industry businesses. All concerned, including DCP, say the same thing: They’re hoping for solutions that will keep as many businesses intact as possible.

By the end of the day, Stefania, the designer’s rep, had several sample sleeves to show her company, with patterns that could go to one of the factories in the district. She smiled as she went down the elevator, headed to her office a block away. “If Samanta weren’t in the District…I don’t know what I’d do.”