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MR. WOLLMAN: Thank you all for being here. My name is Henry Wollman. I am the director of the Steven L. Newman Real Estate Institute at Baruch College and it's a singular pleasure to be talking today about Brooklyn, my birthplace, and I guess the birthplace of many of you here and many of us who are far removed from both Brooklyn and New York geographically. Like most of you, I think when I tell people that, well, I was born in Brooklyn and raised in Brooklyn, they know exactly where Brooklyn is and, of course, all of them have very preconceived ideas as to what Brooklyn is and some of those things are the things we are going to be talking about today and in the next two days on May 8th and May 22nd, in this 2000 New York Real Estate Forum City Roundtable sponsored by the Institute.
It will give me great pleasure in just a moment to introduce the Brooklyn Borough President, Howard Golden, without whose office this conference could not have been possible, but I would like to take just a little bit of time at the beginning of the morning to do a bit of a commercial for Baruch College's Steven L. Newman Real Estate Institute and to tell you a little bit about what the Institute is about.
I say Baruch College's Steven L. Newman Real Estate Institute, because it certainly is housed in Baruch and this is one of the new buildings that you're in that is part of the Baruch campus. But, in fact, we always think of ourselves at the Institute as being really part of the City University of New York as well and the links between Baruch and CUNY and between the Institute and CUNY are of paramount importance to us. The sense of providing a complicated mission to CUNY in regard to real estate education, you will know, some of you may know, and can certainly read in the brochure about the Institute, which is in the back there, that Baruch offers, through the School of Public Affairs, a B.S. degree in real estate and metropolitan development, which is one of the few unique institutions in the United State to combine the world of real estate development, which is really my own background in regard to my running my own real estate development company, but also the link carefully to issues of public policy. At the same it gives me pleasure to announce, really for the first time I think publicly today, that in the year 2001 Baruch will also offer a B.B.A. in real estate, so that those of you and your children and your friends and the City at large who wish to focus on the private side of real estate as well as the public side of real estate, will have sort of one stop shopping here at Baruch.
The Institute's own mandate is to really provide a forum for public policy issues in regard to the metropolitan New York region. To do this we host conferences like this, we publish a journal called Properties, which will also be the subject of an issue concerning today's conference where every speaker's remarks will be transcribed and excerpted within the framework of a series of other articles about the future of Brooklyn. It's an exciting, new publication and for those of you who would like to subscribe, you just have to call the Institute. There are special editions of Properties which are issued periodically. This is one which was just issued this week to celebrate the American Planning Association's 75th anniversary and it's an effective tour map of the Bronx in regard to the history of publicly assisted housing since the end of World War II in the Bronx and this was given out, a couple of thousand copies of this, at the American Planning Association, to the greater glory of the Bronx and we hope to a little bit of glory to the Institute as well. And also in the back, of course, the Borough President's office has been kind enough to provide copies, again, I'm not sure there's enough for everyone, but there we're probably close, of Brooklyn 2000 and I think the Borough President will have more to say about this in his own remarks.
In general then, from the president of Baruch College, from the chancellor of the City University of New York, it really does give me great pleasure to welcome all of you to the Steven L. Newman Real Estate Institute's City Roundtable.
Howard Golden was sworn in as the sixteenth president of the Borough of Brooklyn in January 1977. He was elected by the people of Brooklyn to a full four-year term on November 1977 and reelected in 1981, in 1985, in 1989, I'm not done, in 1993 and 1997.
Mr. Golden has made economic development and neighborhood revitalization his top priorities as borough president. During his tenure Brooklyn has witnessed its greatest economic and commercial renaissance in half a century. The two-billion-dollar rebirth underway in Downtown Brooklyn includes MetroTech and Atlantic Center and a new hotel in Renaissance Plaza. The economic growth has spread to industrial parks in East Brooklyn, East Williamsburg, Sunset Park and the Brooklyn Navy Yard and to neighborhood shopping streets, things you will learn, we will all learn more about in the course of these sessions.
Protecting Brooklyn's environment has been a critical issue for the Borough President. He has been a strong advocate for expanding recycling and siting standards to properly locate waste transfer stations. He has worked to change policies on painting and lead paint removal and allocated funds to plant new trees throughout Brooklyn and explored strategies for increasing acquisition of open land in underserved Brooklyn communities.
The Borough President has also been an effective advocate for Brooklyn's cultural rebirth. Under his leadership, the Brooklyn Academy of Music, the Brooklyn Botanic Garden, the Brooklyn Museum of Art, the New York Aquarium, the Brooklyn Children's Museum and Prospect Park have been restored and renovated. His Welcome Back to Brooklyn Festival attracts thousands of visitors each year. Mr. Golden's sponsorship of the Celebrate Brooklyn Performing Arts series and other cultural events has brought the borough new recognition as a leader in art and culture.
It gives me great pleasure to introduce to you as our lead speaker this morning, the Borough President of Brooklyn, Howard Golden.
MR. GOLDEN: Thank you very much, Mr. Wollman and thank you ladies and gentlemen and good morning.
I'm very pleased to join you and to discuss a subject that is very important to the two and a half million people of the Borough of Brooklyn, the rise of Brooklyn and its importance to the economy of New York metropolitan region.
If Brooklyn were a separate city, it would be the fourth largest city in the United States. As a city within a city, Brooklyn has an economy that has grown significantly over the last 15 years. By the way, parenthetically, Henry, there are two kinds of people in this world, those that come from Brooklyn and those that wish they did. As you will see today and throughout the Newman Institute series of roundtables, Brooklyn continues to enjoy an economic renaissance. The economic health of the borough is very strong as we begin the 21st century. It will be even stronger in the future. You will find many of the details about our Brooklyn renaissance in my report on the State of the Borough for the year 2000, which is available today.
Brooklyn's economic outlook is excellent thanks to the strong partnership between the public and private sectors, the involvement of our diverse communities and cultural institutions, and our extensive network of roads, rail and subways. The current ascendance of the borough began in Downtown Brooklyn. Our downtown region had long been the center for the borough's business leaders, for government and for educational institutions like Polytechnic University, New York City Technical College, St. Francis College and Brooklyn Law School. However, despite such advantages as excellent transportation and proximity to Manhattan, Downtown Brooklyn was not reaching its full potential within the City's economic structure.
In 1983 I asked the Regional Plan Association to examine how to best utilize the assets of Downtown Brooklyn. That study helped to shape our resurgence in its earliest stages and provided a blueprint for initiatives that led to key projects, including Pierrepont Plaza and MetroTech Center. A follow-up study in 1996 gave us further guidelines for Downtown Brooklyn's future. These newest recommendations, which include physical improvements and suggestions for better allocation of resources, will help expand our achievements over the coming decade. Since we began our work, Downtown Brooklyn has been transformed into the third largest business district in greater New York. Only midtown and lower Manhattan rank higher.
The first step in this transformation was the construction of Pierrepont Plaza which provided new Class A office space in Brooklyn for the first time in decades. Morgan, Stanley, Dean, Witter helped this development succeed by locating major operations at Pierrepont Plaza. The Brooklyn revival moved forward with the urban renewal development of MetroTech Center where a number of blighted and underutilized downtown blocks were converted into millions of square feet of Class A office space. The 16-acre MetroTech Center is the result of a strong partnership formed in the mid-l980s between Brooklyn's business community, the leadership at Polytechnic University, government and community leaders. They came together to address Brooklyn's need for new, modern office and academic space. Eight new buildings and three renovated ones have become home to major financial institutions and firms such as Chase Manhattan Bank, Bear Sterns, and the Securities Industry's Automation Corporation. Regional utilities such as Keyspan Energy and Bell Atlantic also now have MetroTech addresses. Polytechnic University, City Tech and Long Island University are thriving in the MetroTech neighborhood. Two new buildings on the center's last available sites are currently in the final planning stages. MetroTech represented the first of many such partnerships in the economic revival of Brooklyn.
Our newest office complex, Renaissance Plaza, has provided needed office space for Lucadia Corporation's Empire Insurance Group and the Brooklyn District Attorney's office. Renaissance Plaza is also home to the Brooklyn Marriott Hotel, the first major hotel to be built in the Brooklyn in more than 60 years. At one time Brooklyn had eleven major hotels, but this was the first one built in 60 years. This hotel is strong proof of the Brooklyn renaissance. Since it opened in 1998 it has experienced extremely low vacancy rates and conference and banquet spaces are regularly booked solid. Given its success, Marriott is now pursuing an expansion that will nearly double the number of rooms.
Downtown Brooklyn is also home to both State and Federal Courts serving the most populous county in New York State. The recent growth in the business of these courts as accelerated the demand for new facilities and office space in the downtown region. A new federal courthouse is under construction on Tillary Street, across the street the post office building is being renovated into another federal courthouse. In addition, a new office tower will soon be constructed near the MetroTech complex at 330 Jay Street for City and State Court space and corporate uses.
Even with our impressive accomplishments, there continue to be many development opportunities that will further reinforce the strong position of Downtown Brooklyn in the regional economy. These opportunities require an aggressive campaign to explain the advantages of relocating or expanding businesses already there.
Government plays a vital role in this process. The City administration must adopt a package of tax benefits for Downtown Brooklyn similar to those offered in lower Manhattan that place Brooklyn at a disadvantage. I believe the Downtown Brooklyn and lower Manhattan economies should complement each other. Increasing tax incentives for companies relocating to Downtown Brooklyn would level the playing field between these two business centers. In attracting new firms to Downtown Brooklyn, a strong focus should be placed on growth industries such as high technology firms.
If our Brooklyn renaissance is to continue, we must continue to follow the principles of good planning. That means employing community outreach and community involvement to achieve successful results. MetroTech, for example, is a success because everyone, government, elected officials, community groups and business leaders were part of the planning. As we seek to take advantage of opportunities for development on the perimeter of Downtown Brooklyn, we will continue to work together to realize the common interest by utilizing these same inclusive practices.
Two downtown areas that are now the object of our attention are the set of vacant state-owned parcels along and Hoyt and Schermerhorn Streets and the underutilized commercial corridor along Livingston Street. Once again I've established task forces of government, business and community leaders to help shape growth in these areas. In this way we can insure that Downtown Brooklyn's economic renaissance continues to benefit the broadest possible community.
The success of Downtown Brooklyn has permeated the entire borough. Beginning in the 19th century, Brooklyn was a national center for manufacturing. 50 years ago, however, that sector went into decline as it did in other urban centers across America. Now a number of planning and development initiatives have been launched to help stabilize and revive manufacturing in the borough. Last year the first tenants moved into Brooklyn Mills, the garment manufacturing incubator in Sunset Park. The facility, almost fully leased, provides small garment manufacturers with affordable space, technical assistance, reduced cost energy and lower taxes. Brooklyn Mills was one of the initiatives that I outlined in a 1997 report on reinvigorating Brooklyn's garment industry, the borough's largest manufacturing sector. We are now ready to pursue other initiatives suggested in this report, including a garment manufacturing industrial park and a Made in Brooklyn promotional campaign.
Development and manufacturing, both large scale and small, are taking place in a variety of industries in many Brooklyn neighborhoods. In Red Hook, valuable space on once dilapidated piers is now being used for small scale manufacturing and craft production. In Sunset Park, East New York, East Williamsburg and the Brooklyn Navy Yard, industrial parks are experiencing near zero vacancy rates. While this resurgence has put many dormant facilities to use across the borough, some of these sites are not feasible for modern manufacturing. Consequently, many older spaces are being redeveloped for 21st century uses. Internet companies are locating in the large but empty lofts in the DUMBO area on the downtown waterfront. Sections of Sunset Park, Red Hook and the Brooklyn Navy Yard, as well as Downtown Brooklyn, have recently been designated as high tech districts as we look forward to attracting firms in this rapidly growing sector of the economy.
Given the affordable rents, development opportunities and proximity of these areas to lower Manhattan, the creation of a second silicone alley in Brooklyn has potential. As part of this focus, Polytechnic University and several of the Downtown Brooklyn organizations were recently awarded grants of $250,000 from the Economic Development Corporation to attract high tech firms into Downtown Brooklyn. This further connects the borough to trends in the regional and national economies.
In addition, the Brooklyn Navy Yard, once the birthplace of some of the nations most famous warships, will soon be home to large studios for movies and television. Construction is now underway to create the largest film production studios on the east coast designed to serve the region's growing TV and film industries.
Our location and vast transportation network are two keys for the strength and potential of the Brooklyn economy. In addition to the extensive system of roadways in every part of the borough, Brooklyn is also a regional hub for mass transit. The borough is served by 15 subway lines, 67 bus lines, express bus routes, the Long Island Railroad and regular ferry service. In past years Brooklyn has had to cope with an often substandard infrastructure. Even with our recent economic success, this has been an impediment to further growth. Some improvements have already been made to our transportation facilities. These include our reconstruction of Adams Street, a gateway to Downtown Brooklyn, and McGuinness Boulevard, an important truck route, as well as the rehabilitation of several key subway stations.
However, if Brooklyn is to continue its growth, more must be done. After years of neglect, the Gowanus Expressway, a vital link between Brooklyn, Manhattan, Queens, Long Island and New Jersey, must be reconstructed. A major environmental impact study is now underway to examine the best alternatives for this project, including a tunnel. Once again we are pursuing a planning process that includes community leaders, elected officials, government agencies. Together they must determine the most appropriate solutions to meet the region's transportation needs as well as the borough's residential and industrial communities.
Just as important as a better Gowanus Expressway is the reconstruction of the Atlantic Avenue transit complex. After years of waiting, the time has finally arrived for rebuilding this vital transportation center. Ten subway lines, many bus lines and the Long Island Railroad converge as this location. Thousands of commuters from Long Island use this facility every day to travel to lower Manhattan which is just three subway stops away. The growth of the Brooklyn economy is dependent on improving this massive transit complex which also connects Downtown Brooklyn with Nassau and Suffolk counties.
Intertwined with the growth of the Brooklyn economy is the cultural renaissance that has taken place in the borough in recent years. Brooklyn is home to some of the nation's oldest and most respected cultural institutions. The Brooklyn Academy of Music, the Brooklyn Museum of Art, the Brooklyn Public Library and the Brooklyn Children's Museum were established in the 19th century when Brooklyn was a separate city. Over the past decade, these and other institutions of all sizes have flourished in our borough. They have made Brooklyn a nationally and internationally recognized center for both traditional and innovative art. Visitors from around the metropolitan region and tourists from all over the world come to experience what Brooklyn has to offer. The performance spaces, art galleries and museums of Brooklyn bring revenue into the metropolitan area's economy and attract new private sector firms to our borough. The prominence of these cultural institutions also draw performers, artists, writers and other creative people to live and work in our borough helping to improve many communities.
The Brooklyn Academy of Music, known as BAM, is an excellent example of how Brooklyn's cultural and economic revivals coincide. Over the past decade BAM has achieved national prominence as the home of new and exciting presentations such as its Next Wave Festival which showcases the best in new artistic ingenuity. I have been pleased to support BAM as both a cultural force and economic engine for our borough and the region. In 1998 I joined with BAM officials to open the BAM Rose Cinemas, Downtown Brooklyn's first new movie house in decades. The cinemas, presenting both mainstream and independent productions, have been and outstanding success.
BAM is also playing a key role in redevelopment. They recently formed a local development corporation to pursue the creation of a arts and culture district in its Fort Greene neighborhood. This LDC is an essential tool for achieving one key goal outlined in our most recent RPA study which calls for development of a vibrant 24 hour community in Downtown Brooklyn. The success of this initiative will mean increased culture and commerce as well as new residents in a revitalized community.
Another cultural attraction, the Brooklyn Museum of Art, is the second largest artistic institution in New York State. It has been drawing tourists to Brooklyn long before anyone ever heard of the Sensation exhibition. Everybody's smiling. The museum's extensive collection of rare Egyptian artifacts, impressive masterpieces, and nationally renowned exhibits, have made it a strong cultural force in the United States.
Other large Brooklyn institutions such as the Brooklyn Children's Museum, Brooklyn Botanic Garden and New York Aquarium - we've got to change that name to Brooklyn Aquarium - have joined smaller ones like Urban Glass and St. Anne's Center for Restoration and the Arts, to shape a new cultural landscape in our borough.
Adding to our success in the field of culture is the rise of our artistic communities throughout the borough. Red Hook, Williamsburg and other neighborhoods are being transformed into centers for artists to live and work, thanks to the efforts of dedicated local groups such as the Williamsburg Art and Historical Society.
Another key element that has enhanced the renaissance of the Brooklyn economy is the revival of parks across the borough, both large and small. Prospect Park, Brooklyn's crown jewel of parks, has always been one of the finest urban parks in our nation. It has fallen into disrepair in the
'60s and '70s, but large areas and major structures in the park have now been restored. Today Prospect Park is enjoying the rebirth to the delight of millions of users as well as the benefit of adjacent communities. I have invested capital funds in Prospect Park and other Brooklyn recreation areas because I see them as economic engines, not just for tourism, but also for community improvement. Neighborhoods around our largest parks, places like Prospect Park, Marine Park and Owl's Head Park, property values have never been higher because people want to live near those quality, open spaces. Brooklyn residents are also enthusiastic about contributing to the improvement and care of their neighborhood parks. They unite to donate time, energy and funds to keep local parks clean and green and there is no better example of an organization working to maintain and improve a park than the Prospect Park Alliance. More than six million people visit this park every year to enjoy nature, or bike, or horse ride or a concert in the newly renovated bandshell, it is one of the most heavily used parks in this region.
Even with these achievements, we still have many opportunities to strengthen the borough's cultural and economic standing in the metropolitan area. The City must continue to support Brooklyn's cultural institutions and community based art organizations as well as plan for new facilities to serve the entire region. The most significant of these opportunities is Brooklyn Bridge Park now in the planning stages. This project will transform waterfront areas and underutilized piers owned by The Port Authority into a world class park stretching from Atlantic Avenue north to the Brooklyn and Manhattan Bridges. The site which faces the East River along the Brooklyn Heights, Fulton Ferry and DUMBO communities is truly unique, offering spectacular views of New York Harbor and vital waterfront access to both residents and visitors. When it is completed, the public park will future impressive open spaces as well as a marina and comfort center. Brooklyn Bridge Park will be as vital to the development of Brooklyn in the 21st century as Prospect Park was in the 19th century.
As we have seen, the Brooklyn economy has grown significantly over the recent decades. More and more businesses are discovering the unique qualities of our borough and our borough is being recognized for its importance in the local, regional and national economies. As a second city, Brooklyn has become a genuine alternative to Manhattan and to other cities across the nation. From my perspective, however, Brooklyn is a first city. Early in my tenure I knew that Brooklyn was unique for its unparalleled opportunity for industrial, commercial, cultural and residential growth. At that time I placed signs at major entrances to the borough stating, "Brooklyn U.S.A. A nice place to visit, a great place to live." It was true then and today, more than 20 years later, it is still true.
As you participate in the Roundtable sessions, I am confident that you too will recognize the special character and economic power of the Borough of Brooklyn.
MR. WOLLMAN: Thank you, President Golden.
I'd like to take just a moment, we're going to bring some more chairs in the back and before introducing the next panel, we can just let those chairs come in right now and those of you can find seats.
It is a symptom, I guess, of Brooklyn no longer being metropolitan New York's second city, but it's new city that there are this many of you as are here and we welcome all of you and those who just came in.
I'd like to ask the speakers for the second session to please take theirs seats up on the podium right now. That's Ken Adams, Seth Kaye and Lillian Borrone. A problem with Representative Nadler's office has forced him to delay his appearance this morning, but he will be here slightly later and he has asked our indulgence in allowing him to speak slightly later in the program.
The ground rules for the rest of the morning are clear. Everybody has roughly ten minutes in which to speak. The speakers have very carefully given of their time to prepare remarks that can be compressed into roughly ten-minute segments. They are giving you the pith of what they know and the essence of, really, their dedicated day in and day out work. The Brooklyn 2000 book to the speakers will be the sign that you have two minutes left in your own remarks and the only enforcement of the warning is that we try to be very strict about the ten-minute time limit. There is coffee and there is breakfast, which will be out in the lounge all morning, so those of you who feel a spasm of boredom, which I can't imagine happening, or maybe a pang of hunger, please, there are doors on that side and on that side that you can get to the lounge to. It is a little crowded today, and wonderfully so, so it may be somewhat more awkward to get there, but I think your neighbors next to you will be indulgent. Finally, there is the ladies' restroom on that side through those doors back there and the men's room on that side through those doors back there.
It gives me great pleasure to welcome Ken Adams, Seth Kaye and Lillian Borrone to the Steven L. Newman Real Estate Institute and to the Brooklyn Roundtable forum.
Ken Adams is president of the Brooklyn Chamber of Commerce and the Brooklyn Alliance. Mr. Adams is also treasurer of the Downtown Brooklyn Waterfront Local Development Corporation, he previously served as director of the MetroTech Business Improvement District and is an ideal candidate to lead off the technical discussions.
MR. ADAMS: Thank you. Good morning, everyone.
I had two parts to what I wanted to present because there was this general theme of strategic assets of Brooklyn and also I came to a very strongly worded hint from Ellen Posner, who helped coordinate this event this morning, that I speak about what the Brooklyn business community looks to City, State and Federal government for in terms of support, in terms of governmental action do we think would be helpful to further the resurgence of our favorite borough. But the thing is, the first part of what I was going to say was very well-covered, quite obviously, by the Borough President and, in fact, he really gave, I think, and I hadn't heard this, this is a new speech, I haven't heard it before, it's part of his coming State of the Borough address and I'm sure it covered a lot of the major points that we care so deeply about in the business community. So I'm going to fast forward and just give a couple of footnotes to sort of tie into some of the things mentioned by the Borough President and then I'll move onto some of the larger issues that Ellen asked me to speak about and by then, well, I'll be well over my ten minutes. No, that won't happen.
Just quickly reflecting again on some of the strategic assets the borough -- by the way, it's interesting that we have such a great crowd here today and this is all about real estate development opportunities in Brooklyn, right, for so many of us and there's 80 square miles over in Kings County, no land left, so we still, obviously, have a lot of interest in what's going on. The question of location is fundamental. Brooklyn is at the heart, as we all know, of the most powerful regional market in the country, some might say the world, if you just do like a 20-mile radius around the New York City metropolitan area and for that reason there are some very practical, not always sexy, but practical successful businesses, business operations, in Brooklyn that sometimes don't have the glamor of some of the activities that happen here in Manhattan, but, for example, wholesale distribution. Just to give you a sense of balance, there are about a 125 food manufacturers in Brooklyn. At the Chamber we focus a lot of our services on the two things we call food and fashion, food processing, food manufacturing, food distribution, wholesale food import, export, but also on fashion, apparel, textile manufacturing. In any case, if you look at food, as I said, there are about 125 food manufacturers, but there are over 700 wholesale food distributors, different types of food distribution businesses. When you get around the industrial areas of the borough, you run into lots of warehousing operations, also in the buildings construction supply and services, a tremendous amount of material that is stored, schlepped, shipped, packed and moved through the borough, again, because of its central location in the nearest metropolitan region. Also I might mention, again, on these footnotes, on the heels of what the Borough President said, that the Brooklyn waterfront, it can be misleading, I know we've got lots friends here of the Brooklyn waterfront and that's what we're going to talk about after the meeting but there are a lot of misperceptions about the Brooklyn waterfront. I am involved, it was mentioned, in Brooklyn Bridge Park, in the planning for Brooklyn Bridge Park on the LDC, and our planner from Toronto, a guy named Ken Greenberg, talks about the retreat of the industrial glacier, it's kind of a poetic term, but I usually argue with Ken that the industrial glacier has come back maybe 500 feet, it hasn't totally retreated as some people would suggest. In other words, while the actual finger piers that sometimes jut out of the Brooklyn waterfront into New York Harbor may not be as active as they used to be and some actually are still are quite active, as you'll hear from Lillian and others, though the upland portion on all that waterfront property in many areas, especially Sunset Park, is still very much used for industrial purposes, purposes that fit the M1, M2, M3 zones along the water's edge. So, in other words, don't just think the Brooklyn waterfront, which, again, it's the borough's greatest assets, has been given up and if there isn't any more manufacturing or commercial activity there, in fact, again, food, fashion, other types of (inaudible) manufacturing activities and wholesale distribution activities take advantage of waterfront property that comes right up to the water's edge, so even if those piers aren't in use, there are all sorts of other important commercial activities that are happening there. So, again, I just add that to the list of assets the borough has, the sort of in place protected by zoning industrial land along the water's edge. Of course, if you start at Newtown Creek in Greenpoint and you work your way down - I need a map here - but you work your way down the water's edge to the site of Brooklyn Bridge Park and then farther south to the piers that go through Red Hook and Sunset Park, there are a variety of uses and we've got other people who will speak about them, but it's all very exciting and all very important to sort of see that mix of activities there.
I also want to point out that while Brooklyn is important in terms of the businesses we have in the borough that serve the general metropolitan area, needless to say it's a very powerful local consumer market. The Borough President mentioned the population of two and a half million people, we'll wait for the latest census data that confirms that, there are probably more than that, but, in any case, over 80 square miles, two and a half million people, something like 35,000 businesses, most of them small businesses, most of the businesses serving a very powerful local consumer market. Some would argue, as Bruce Rabner (phonetic) does, the developer, that that consumer market is not fully tapped out. There isn't enough retail yet, there aren't enough movie theaters, there aren't enough shopping centers, there aren't enough places for local Brooklynites to spend their dollars at. In fact, what we still hear all the time is about the flight of consumer purchasing power to suburban areas to more convenient shopping malls in Long Island or New Jersey. But, again, just this quick list of assets, the local consumer market is very powerful and very important.
Again, just in terms of perspective, of this 35,000 businesses in Brooklyn, ninety percent of them employ fewer than 20 people. So that just tells you it's really a small business economy and there's a very powerful, and we see this at the Chamber of Commerce, very powerful business-to-business economy as well.
There is a large labor force in Brooklyn, as you can imagine, just because of its size and because of the amount of people that live there. Unfortunately, Brooklyn still ranks as the second highest unemployment rate in this state. We do battle with the Bronx for this great statistic, but probably unemployment is between eight and ten percent. Still, there is for a lot of the Brooklyn businesses a large and, although sometimes low-skilled, also relatively low-wage, labor pool available. There is a real problem in our work force development system, that's a subject for another day, but still in all, we run an employment program through the Chamber of Commerce and we are constantly providing workers to small businesses around the borough.
The large influx of new immigrants the entire city is experiencing is felt, of course in Queens and very dramatically in Brooklyn as well. There's something like a hundred different languages spoken in Brooklyn. I think Queens is often recognized as being the most diverse place on the planet, but Brooklyn is probably number two in that regard and the influx of new immigrants propels a lot of entrepreneurial activity at the neighborhood level. So another thing that's really important is to recognize the degree of neighborhood entrepreneurship and the strength of neighborhood retail strips, sort of mom and pop operations. Many of them propelled by the entrepreneurship and the energy and the vitality of new immigrant communities think of. Flatbush, today, for example, drive down Flatbush Avenue, there's so much business activity you can't get past all the double-parked and triple-parked cars.
Finally, just another thought I want -- part of my footnotes to what the Borough President mentioned, when he spoke about the importance of the cultural institutions, we see more and more of Brooklyn's cultural institutions in tandem with the universities of the borough, think of places like Pratt, which is in Fort Greene or Clinton Hill, nearby to BAM, nearby to LIU, to Polytechnic, to New York City Technical College, I'm just going over some downtown institutions, the relationship between those institutions and the universities and their cultural institutions is fundamental to attracting basically new energy and new talent to serve the businesses of the borough and we are seeing more and more folks that are coming to Brooklyn, in some cases, frankly, because they're just being priced out of Manhattan. They're coming to Brooklyn to live, to study, to enjoy the cultural institutions and to have a more complete community, to have a place in which they could live and work and not just by any stretch of the imagination, see Brooklyn as a dormitory community for Manhattan based businesses. That point is actually fundamental, we always say this at the Chamber of Commerce, we have to be realistic about the Brooklyn population, about the high unemployment rate I described and the generally low level of skills and education that many of the workers in the Brooklyn economy. I recognize that we've got to just push for as much diversity and as much of a healthy mixture in the work force as possible.
I'm going to go now because now I know my ten minutes is up. I'm going to - he hasn't thrown the book at me yet, but that's going - let me go into some of the things Ellen asked me to talk about.
What we see through the Chamber of Commerce is fundamental needs in terms of partnerships between government and the business community. First, and this will be debated at greater length by another panel later in these presentations, but it is true, as the Borough President pointed out, that we do need a new package of zoning incentives and abatements to stimulate further development in Downtown Brooklyn. There was a point in time when we thought, oh, this is great, MetroTech is done, the Marriott was finished, and Downtown Brooklyn was in great shape, but the Borough President was very firm in saying but we can't stop there, there still are development opportunities in Downtown Brooklyn and development should never, for the downtown area, should never stop. It's got to be work in progress, we've got to keep putting Brooklyn back on the map. But, quite frankly, at this point there is a dearth of sites, of new sites anyway, the Borough President mentioned all the sites that are currently in development, and there is a real problem, as we all know, with just on a cost basis with competitiveness with New Jersey, so that it is fundamental that we work something out this is being developed now, as the Borough President mentioned, that will stimulate -- through governmental action it will stimulate new development in the downtown area. But I would add to that the need to look at government action that could stimulate the development of market rate housing. You'll hear later in these (inaudible) from Joshua Muss, who makes a very important point that in the boroughs, particularly in Brooklyn, and he's very familiar as well with Queens, there is residential development either affordable housing or of market rate or rather luxury housing and very little in the middle for the middle class. And, again, as employers in the Chamber of Commerce, we see this all the time, where will people live who make a little too much money to live in affordable housing and not nearly enough to afford a Brooklyn Heights brownstone or some luxury development. Where will the middle class live, and this is a big issue and one that requires thoughtful examination by government. I know that Joe Rosa is going to be here for one of the upcoming sessions and I know that subject -- I'll be back for that debate at that time.
Finally, it's been mentioned by others, but the business community is very strong behind any sort of -- all the action by government to improve our transportation infrastructure and others will talk about this, but as I mentioned earlier, there is so much activity in wholesale distribution, in manufacturing and retail services, in construction supplies and services, that is so dependent on a solid roadway system and transportation infrastructure system that this is a perennial issue for us through the Chamber.
The other point I wanted to make is that some of the projects you're going to hear about that we're all very excited about, are really big lists, they're big sort of visionary projects, like Brooklyn Bridge Park or Congressman Nadler's proposals, along with this city, for possibly a freight rail tunnel underneath New York Harbor or other things like a hub port or some version of a hub port development in Sunset Park. These are such big, massive projects and while they can bring terrific development and investment opportunities for the borough and help move the economy in a great way, they're going to require a whole another level of political cooperation and that's one of the toughest things for us within the Chamber for our members as well look out and we see what it's going to take to get these projects to happen and how very much we need a level to above, sometimes traditional political Turk wars, a level of political cooperation to get big projects done, otherwise you just don't get a hundred million dollars for Brooklyn Bridge Park just because you're nice and you ask and you have a pretty picture. And we all know that nothing is really fundamental and I think it's, to a degree, the business community's responsibility to step forward and help try and advocate for that cooperation to happen.
I'll get to some of these other things that we have some chance to do some Q and A through the panel.
Before I'm hit over the head with the book, let me sit down.
MR. WOLLMAN: Thank you, Ken, and I have to say I want to thank you especially for all the help the Chamber has given us in putting this program together.
Seth Kaye is the Executive Vice President for Transportation and Waterfront Development at the New York City Economic Development Corporation. He oversees the City's rail freight and maritime commerce infrastructure and helps to coordinate the City's planning efforts in areas such as aviation facilities and private ferry services. Mr. Kaye previously served as Director of the Mayor's Office of Transportation.
Please welcome Seth Kaye.
MR. KAYE: Thank you very much and good morning everybody. I will make sure to do my best to follow the fine example set by Ken in keeping things on time.
I also want to thank Ken for laying the ground work for exactly what I wanted to stress this morning. I'm kind of sorry that Congressman Nadler is not here, although I'm actually glad in a way Congressman Nadler is not here because he can tell in a much more erudite manner exactly what the history of Brooklyn's transportation infrastructure, what our waterfront is. I think most of you in this room are no doubt familiar with what used to be Brooklyn and especially in terms of the waterfront and while it's been a bit romanticized, the fact is that because Brooklyn had a very developed economy in the first decades of this century in terms of being the commercial center of New York, when you look at a map of New York City, I think, as Ken pointed out, Brooklyn is centrally located right in the heart of the City. Of course, we live in a city that, as Mayor Giuliani calls it, it's three islands and a peninsula geographically, but that is very important factors in terms of how goods flow into it and out of this City. We are, of course, the most densely populated, the largest populated metropolitan area in the U.S. with the most diverse population in Brooklyn. Certainly it leads the way in that, although, as Ken pointed out, compared to Queens, Queens may be a little bit more diverse, but Brooklyn certainly stands out as representative as what New York City is about in terms of its economic vibrancy and its dynamism. Because Brooklyn thrived really in the first decades of this century in terms of maritime commerce, the transportation infrastructure is really there. Thankfully, the subway system, the transit system has been maintained and improved. That's a very important factor, as we all know, in terms of economic development and, as Ken pointed out, the waterfront is still there. It's kind of a myth that it all went away. Certainly there was a great decline starting about the 1960s. I think most of you are well aware of the trend toward containerization. The Brooklyn piers, for a variety of reasons owing to unfortunate missteps taken by labor and government in the business sector, went into decline and there's no point in rehashing that. The point is looking towards the future and indeed, because of that waterfront in Brooklyn, I'm talking especially about the part from Red Hook down through Sunset Park down to Bay Ridge, the working waterfront, that's a tremendous asset for Brooklyn's future. A lot of people will tell you when they hear about the proposals that have been advanced by our Congressman Nadler and what the City is doing, just so all of you know, following up on Mayor Giuliani's support, announced in 1997 in the State of the City address for a cross-harbor rail freight tunnel, EDD has engaged in two major studies, one which we completed a year ago, the strategic finding of the redevelopment of the port of New York and in a formal federal major investment study, which is about to be completed next month, it's called Cross Harbor Freight Movement Major Investment Study. Those two study efforts have revealed a tremendous amount of data in planning the future of this City and Brooklyn in terms of goods movement, rail freight and maritime commerce.
There are people who argue that these study efforts are really an effort to turn the clock back into Brooklyn, they point to Congressman Nadler and they say, you know, he's trying to rehash it, re-create the past when Brooklyn had major industrial activity. Well, I don't think anything could be further from the truth. Brooklyn, as we've seen today, maintains a very diverse economy, small businesses, small manufacturing, and certainly while there is some activity on the waterfront, there's the ability to place a lot more activity on the old waterfront. Those, again, who argue that we're trying to go back to the past, well, you know, New York City really entered the precursor of the information age economy back about the '60s and '70s when, unfortunately, the industrial base left and, naturally, or unfortunately, Brooklyn wasn't prepared to deal with it. That's why the financial services industry, the communications industry, the publishing industries, I really shouldn't call them industries, they're more economic sectors, those are mostly Manhattan centered. And like so many things going in cycles, and certainly the economy does, I'm not here to give any stock market prognostications, but in terms of the economic trends of this city, what we see now in terms of the information age economy, information technology, e-commerce, the reason why New York City has had such a leadership role in that is precisely because we maintained the service economy in financial services, in publishing, in communications, that has provided a foundation for the software industry and the information technology industry to flow and flourish. And certainly now we're seeing the growth of that industry points to Brooklyn.
How does that tie into the waterfront? Very obviously. There is a tremendous demand for consumer goods. It keeps on growing, although it may be hard for some to believe the New York area is the highest per capita income, the highest amount of disposable income of any major metropolitan area in the country that drives consumption. And, unfortunately, the consumption still leads -- we haven't figured out how to deliver goods through a modem yet, so that means that the food, the furniture, the building supplies, the construction materials, all things that we rely on still come in or still need to come in. Fortunately, they come in by truck on a transportation infrastructure, a highway network, need I talk about the Gowanus here, I don't think so, that is woefully outmoded. Unfortunately, this city has not added to its transportation infrastructure in any significant manner for 35 years since they completed the Verrazano-Narrows Bridge, which happens to be one of the congested arteries that bring in our goods every day. Between the Verrazano Bridge and the George Washington Bridge, 35,000 tractor-trailers cross those two bridges every day. The results, the impacts, are obvious. They're felt throughout the City, they're felt in Brooklyn. Tremendous costs in maintaining our transportation infrastructure, wear and tear on or our roads and bridges. The environmental impact in terms of air quality are obvious, the traffic congestion that so erodes our quality of life. That's why it's essential in preparing for the economy of the 21st century where we've seen -- I'll leave it to Lillian to talk in a more informed manner about the increases in maritime commerce that have been growing five, six, eight, ten percent every year for the last decade and showed no signs of abating, this even while we've gone through an economic slump in Asia. Now that the Asian economies are coming are back, imagine how much more goods are going to be consumed by this region.
So we're talking about how to deliver goods to market in an environmentally sustainable and economically viable manner. The answer is clear. We need to redevelop the Brooklyn waterfront for modern maritime commerce, container port freight bulk activities. Secondly, we need to get trucks off our congested highway system. We're not going to be adding highway lanes, we haven't for the last 35 years basically, and certainly given the environmental, the cost issues, we're not about to. The answer is obvious, rail freight.
Brooklyn is blessed with one key strategic asset that very few people know about, it's called the Bay Ridge Line. It's a rail line I think some of you may be aware of, it runs from the Brooklyn waterfront through most of Brooklyn, Flatbush, Midwood, East New York, and winds up at Fresh Pond Junction in Queens. That rail line, through foresight, was grade separated some 80 years ago. Just by way of example, the Port of Los Angeles-Long Beach, which is now the largest port in the United States, is undergoing a major transportation project of their own called the Alemeda Corridor Project. They're trying to separate the railroad that serves the ports of L.A. and Long Beach from the roadways. They are spending over two billion dollars on that. It's a major federally funded project. Fortunately, we don't need to do that. We already have our Alemeda Corridor right in Brooklyn. With the revitalization of the waterfront and with the construction of a rail freight tunnel, as you'll hear in more detail starting next month when we release the major investment study, the Cross Harbor Freight Movement Study, I think a lot of you have been participants in our advisory committees, we'll be coming forward with a preferable alternative which we'll recommend that in a cost benefit analysis that a rail freight tunnel works and that it's necessary from Brooklyn to either Staten Island or New Jersey. That's not just serving a port, but very much so it's serving the consumer needs, the economic needs of the Borough of Brooklyn and New York City.
Just to show you by way of example, in the east of Hudson region we have some 14 million people that reside in the City of New York, Long Island, the lower Hudson Valley, and southwestern Connecticut. It's the largest consumer market in the U.S. and right now it's served mostly, since most of our goods come from points south and west by two major crossings, the George Washington Bridge and the Verrazano-Narrows Bridge and, as I have said, there's no need to elaborate any further about what the traffic conditions are. The answer is that we need to move in goods by rail freight combined with a revitalized waterfront which will be a major economic boon of the future of the City of New York as well as the Borough of Brooklyn.
I haven't seen that book anywhere, so I think I'm probably on time and I think I'll stop right now and turn it back to Henry.
MR. WOLLMAN: It gives me a special pleasure this morning to welcome Lillian C. Borrone from The Port Authority. The Port Authority is that great mystery in many of our lives and yet we certainly feel the looming control that it exercises, but not all of us are exactly aware of the many areas of which it does exercise this sort of looming control.
Lillian is the Director of the Port Commerce Department of The Port Authority. She previously served as Director of Management and Budget and Assistant Director of the Aviation Department. She is a member of the International Association of Ports and Harbors, the North Atlantic Ports Association and as past Chairman of the American Association of Port Authorities.
Please welcome Lillian C. Borrone.
MS. BORRONE: Thanks, Howard. Good morning, everyone.
I am also delighted to be with you this morning and to have the opportunity to share with you perhaps a little bit of the regional perspective, I'm not sure I'll eliminate too much more of the living presence of The Port Authority, but you can ask me those questions in the open session.
I think Borough President Golden's opening comments were really excellent in setting an understanding for this century, not only about Brooklyn and all of the wonderful assets that exist in the borough, but also about the way our economy is changing and how we need to think differently about how we're going to use the assets that the borough presents us with. How, in particular, we're going to use the waterfront assets and think about their use as they're related to the economy that is changing in the Brooklyn borough. I think as well, if you visualize the photos he used as I talk about the areas of waterfront that I'm going to spend a few moments on, you will begin to realize that we have changed the setting that the waterfront operates within. So we truly are changing the way the waterfront is connected to the residential and business environment in each of the local areas in the Brooklyn community and as you think about the you begin to think about the way we see the transportation system serving the residential, commercial and waterfront or maritime and recreational activities. Now, Ken I think talked about our need to set the stage in the way we understand and attract new business, new residential and new workforce opportunities. Seth, I believe, did a fabulous job in laying out the sense of the port and the transportation system that exists. What all have said so far is that we have a collective need politically from a policy and from an economic view, and I'm going to add the operational view, to think about our new uses and our new ways of interacting and our new ways of doing business when we think about the transportation facilities and that is we understand the transportation facilities' uses, we recognize that we may have to step back and accept some thing that we have found odious in the past or that maybe we would not have accepted had we not seen this new vision that everybody is painting this morning and that I think in the next three sessions you will get into in a great deal of depth.
Without our using the transportation system, whether it's the waterfront itself or the roadway, rail or tunnel or float systems differently, I don't think the economic engine that is Brooklyn today will be able to grow in the ways that we may think about for this next century as being necessary and think that's part of what the RPA document really talks about.
I want to underline a couple of things that this said. We are the largest consumer market in the U.S. and Canada in this region. We are also the second largest port in the country, when you look at New York and New Jersey as one harbor, as Seth described L.A.-Long Beach as one harbor. We're certainly the largest port on the east coast of this continent and we're also truck dependent. Almost 80 percent of the commerce that comes into this region moves around the region and stays in the region and it moves around this region by truck, predominantly. Now, we're working awfully hard. That 80 percent used to be 92 percent. We're working awfully hard to switch modes, to get more and more of our volume that's coming in and out of this harbor onto rail systems or onto float systems where we can make that move happen. But that requires a lot of new thinking about how we use the water and rail and road systems and new connections. And while Seth is absolutely right, we have our Alemeda corridor, we have an excellent intermodal system in this region, we can do some other things to help enhance it, including the decisions that will eventually be made about the tunnel and about additional float operations.
Now, I mentioned that I think my role is to give a little bit more of a regional view and to talk about The Port Authority's specific view of the three maritime waterfront areas that we, working in partnership with both the City Economic Development Corporation and the Borough President and the local chamber and other community groups, have responsibility or involvement with.
I want to begin with port growth for the next century. By 2010 we expect to see our port volume double. Now, that may not mean much, but just think about the fact that last year we handled almost -- I'll say it this way, the largest volume in our history, both in break bulk and container traffic and last year's container volume was the largest ever in our history, A little over two and a half million, what we call 20-foot equivalent units. That's a tremendous volume of cargo. We expect it's going to double. We expect to be close to six million container units by 2010 and we expect that that volume will triple, our volume this past year will triple by 2020. And that's at a very conservative basis assuming that we'll only grow about four percent a year and growth rate over the last three years has been closer to seven to eight percent a year. That's a lot of cargo movement because not everything, even though there are 14 million consumers east of the Hudson, not everything is going to be consumed east of the Hudson or even in our region west of the Hudson. A lot of it does move, but to the midwest as well as to Canada and some of it, we hope, will move south as well.
Now, what are the three projects? Piers 1 to 5 that Borough President Golden ended up with, the South Brooklyn Marine Terminal, Red Hook container terminal and the South Brooklyn facility which Seth briefly talked about. I want to talk about Piers 1 to 5 and I want to start by saying that Brooklyn, for The Port Authority, continues to be an extremely important maritime arena. Why I say that, because we don't have, as we look at this region's terminal future, we don't have enough land area dedicated to cargo terminals. We have to do better with what we already have. That means we have to maximize the existing terminals that we have today and use them as productively as we can before we can ever think about adding more land and making them more productive.
The Brooklyn Piers 1 to 5 finger pier areas are not acceptable for the kind of deep water maritime trade we're talking about both today and in the long-term future because of the size of the vessels, but they are currently useful warehouse facilities, in fact, they are currently storing a great deal of the cocoa that the Red Hook terminal is handling. And, in fact, Red Hook is one of the largest cocoa ports in this country. Now, that doesn't mean that those warehouse facilities can't be converted into other uses over the next five to ten years as we identify other areas within Brooklyn that can become warehousing support facilities for the kind of terminal development that we've seen succeed in Red Hook. What we are looking at and what we are doing with the LDC is to think through how that Piers 1 to 5 area will be used. We've committed to that LDC process, we're investing, on an ongoing basis, in the substructures of those piers, so that we will have found assets that get transferred to another entity whenever that entity comes into reality. We're investing, in fact, five million dollars this year in substructure. We're providing $100,000 in engineering support to the LDC as a result of the MRU that we committed which you know the Borough President announced a couple of months ago. Our ultimate goal is the transfer of that property (inaudible).
Now, the Brooklyn Marine Terminal in Red Hook, it plays a major role in the diversity of services in harbor. We have to have construction materials, we have to have break bulk commodities handled in this region in order for us to keep the cost to all of us as consumers for the removement of cargo down as low as it can possibly be. And if it's got to come in through other ports, our cost goes up. So, Brooklyn to us is quite important in allowing us to continue to be to become that economic engine for the future. Red Hook is a major cocoa center. We handled more than two million bags of cocoa in '99. That's over 315,000 metric tons. It grew last year over '98 by 14 percent. Mr. Catucci (phonetic) and his team are doing a fabulous job out there because not only did they handle that cargo, but they also handled 61,000 containers, a tremendous growth. That cargo, container volume, is back to where it was in 1991 when Universal Maritime left that facility because they were fearful of what would happen to the cargo's movement around this region when the Gowanus reconstruction project started. The Red Hook barge continues to play an important role in that terminal program's success and we are continuing to provide the support for that barge. In fact, between the City and ourselves, we just purchased both new barge equipment as well as additional crane equipment that that terminal needs in order to assure that it can continue to grow its business.
Now, in South Brooklyn Seth talked about it, as the City undertook its study for how best to reuse the Brooklyn facilities for port purposes, we undertook a parallel study looking at the entire set of facilities in this region in New York and New Jersey and we came to very similar conclusions about the opportunities South Brooklyn represents. What we both saw it that while there's
adequate land for a marine terminal development and the channels that lead to South Brooklyn can easily be dredged to 50 feet or more, the land side transportation challenges to the site need to be addressed, they need to be resolved. That's why Congressman Nadler's support and funding through the congress for the study of the tunnel has been so critical and why we need to better understand and be able to come to a conclusion as rapidly as we possibly can about the rail system and float alternatives that may work as a stage setter for that tunnel once that tunnel or as the tunnel, if that decision is made, is under construction. The immediate opportunity for South Brooklyn, we believe, is for general cargo activity. It sets the stage for whatever the long-term terminal uses will be. But general cargo means potentially autos, lumber, bulk activity. All of those could be accommodated right now, in our view, at the existing South Brooklyn facility with some investment in the existing transportation and port infrastructure there.
Now, a proposal has been set forth of the possibility for ship building activity in this area. We leave it to the City to determine whether this is the right site for that activity or not. We think it may make sense, but certainly it's a proposal that's worth considering and whether it winds up in Brooklyn or it winds up someplace else in the harbor, we hope we can attract those kinds of businesses because we need business opportunities that give us jobs for lower skilled, semiskilled workers as well as for very high-skilled employees. When the City completes the cross-harbor freight study, we will have a better understanding of the range of options that should be considered for the transportation solution in South Brooklyn and we certainly expect that those options will include and focus on the tunnel, but we certainly hope that, as I said a minute or two ago, as we are setting the stage for that tunnel, we look at how to use the float system that may exist or may be able to be expanded over the near term. Once that solution is decided on, whatever it is, we will, The Port Authority, will work EDC so that we can assure that the South Brooklyn waterfront potential is realized. We want to see the development of that facility and we hope it will eventually become a full container terminal facility.
We also agree that the development activities along the waterfront, in whatever form they take, have to include waterfront access and public park uses. We think the Sunset Park community is in need of that kind of use and that kind of opportunity because it is one of the areas of the Brooklyn borough that the Borough President talks about as having the least amount of recreational and open space per capita. We were pleased to learn that EDC received a grant to pursue the development of a new park plan for the area and we remain committed to working with EDC to assure that that park plan becomes a reality.
I think we've all focused on essentially one stretch of the Brooklyn waterfront this morning. We see this area as the potential for a diverse set of waterfront functions, economic and recreational. We believe diversity is essential, we believe we can see the waterfront working in combination with the community's needs for recreation and public access and we want to make sure that that takes place. It can't happen without political cooperation, and I believe you're seeing today the commitment that we've made, The Port Authority, the City and the Borough President to work together reflected by us being here, but I also believe it can't work without the community's active and aggressive participation and input. I think the City has done a terrific job with outreach in the dialog process, I think the LDC is doing a very good job on Piers 1 to 5, but we need to continue that outreach, we need to have a dialog taking place, we need to understand that we all have to make adjustments and changes if we're going to have a successful program for this next century.
MR. WOLLMAN: I would like to thank the panelists for session two, Ken Adams, Seth Kaye and Lillian Borrone. Again, Jerry Nadler will be here, but a bit later in the morning. I ask if we could do a brief switch and have the panelists for session three, Robert Yaro, Carolyn Konheim, David Walentas and Candace Damon, come up and take their seats.
While they're doing that, I would like to announce two things for the diverse audience that is here in regard to the Institute. And the audience is purposely diverse, and there were many, many applications for attendance today, as I think all of you can see, and we were probably unwilling to ultimately control it as tight as we intended to at the beginning. But the Institute is establishing, for those of you who are connected to public organizations or community organizations, a certificate program in real estate that will complement the private sector's certificate program in real estate, which has been going on now for almost a year. So for those of you public employees and any of the public agencies, there is a special program, or for those of you who are working with community organizations, there is a special program that the Institute has established here at Baruch to provide you with a very comprehensive certificate in real estate and if you'd like more information on that, please call the Institute.
The second thing that I wanted to say in regard to Institute services for the community through the City University of New York, is a planning function which the Institute has begun to undertake specifically for local neighborhood development plans for community organizations. We are currently working on one with the Reverend Floyd Flake (phonetic) and for the Allen AME Housing Development Corporation. There are a number of other community organizations that have approached us for similar types of help and we are going to establish -- we have already established and are going to continue to expand that section of the Institute's work which is focusing in on assisting the community organizations of, for the moment, if you will allow me to use the term outer boroughs, especially to get their own act together at very sophisticated levels. The plan for Allen AME Housing Development Corporation consists of a thorough investigation of the Merrick Boulevard corridor around where the catherdral is, a rezoning of sections of that corridor to increase allowable density for housing and retail services there. And this type of facility is something -- this type of planning help and development help is something which the Institute would like to present and offer to many of the community organizations around the City. Obviously it will be on a discussion basis.
The heart of the morning is often our case studies and I think it will prove to be that this morning as well. The case study session is divided into two parts. The first part looking at options for Brooklyn's future with a strong focus on the work of the Regional Planning Association presented to us by its director, Robert Yaro. There were two commentators who wish to also sort of comment, I think, to be redundant about it, on Mr. Yaro's remarks, one Fred Siegel, who, unfortunately, cannot be here today because of a death in his family. Carolyn Konheim, the member of the board of directors of Community Consulting Services, Inc., will speak with us this morning. That will be the next half an hour.
The second part between 10:20 and 11:00 will concern issues on the Brooklyn waterfront about which we've heard a great deal. David Walentas, president of Two Trees Management Company, and Candace Damon representing the Brooklyn Bridge Park Development Corporation will be the speakers there.
Robert Yaro is the Executive Director of the Regional Plan Association. He co-authored the region's current major statement about the area, about the metropolitan region entitled Region at Risk, which was published in 1996, and is still the most authoritative, I think, of the most comprehensive vision of the future infrastructure and other issues and needs of the metropolitan area. Mr. Yaro teaches urban and regional planning at the Harvard Graduate School of Design, he chairs the Empire State transportation Alliance, is on the board of directors of the Institute for Urban Design, the Growth Management Institute and Sustainable Long Island.
Please welcome Robert Yaro.
MR. YARO: If I could just say a few things before the overheads go on, I'd like to focus this morning on RPA's transportation division for Brooklyn and for the inner core of the region. A major component of our regional plan was, in fact, a look at how we could transform the region's rail transit system to create new capacity for growth throughout the region focused on New York City and a network of a dozen regional employment centers, we call them regional downtowns, in the regional plan, including Downtown Brooklyn, Long Island City, the Jersey waterfront and then a number of suburban employment centers, Stamford, White Plains, Newark, places like that. And the heart of the plan's transit proposal was what we call the RX regional express rail service which called for building 21 miles of new rail links essentially tying together the 1400-mile subway and commuter rail systems creating new links, limiting transfers, taking people to new and expanded destinations to places like the airports, for example, lower Manhattan and other major employment centers. And Downtown Brooklyn is one of those places. This really builds on work that RPA started to do in the 1960s when we anointed Downtown Brooklyn as a regional center and started working to promote back office and front office employment headquarters functions in Downtown Brooklyn. We also developed a master plan in the early 1980s for what became MetroTech and one of the most successful projects, and that is one of the most successful projects in the region that focuses new employment growth around the rail center. The third plan essentially identifies the corridor running under Second Avenue, the Second Avenue subway corridor as the key link in this regional rail system. And this builds on some successes that we already had soon after the plan came out. Right after the plan came out, Governor Pataki and Senator D'Amato picked up on the regional express idea, they called it Metro Links, I guess is what they called it? Who's going to help me out with this? Metro Links.
A VOICE: Master Links.
MR. YARO: Pardon me?
A VOICE: Master Links.
MR. YARO: Master Links. Okay. Master Links, which always sounded to me like a really fine eighteen-hole golf course or something like that, but our reaction was well, Governor, you can call it whatever you'd like to call it. But the governor made a commitment to funding both the JFK air train, which was the only funded project when we came out with the regional plan in 1996. And they also made the commitment, as part of the Master Links proposal, to build the Long Island Railroad east side access link into Grand Central, which we think is a vitally important project for Long Island and for New York City and for the whole region.
But the next and integrating piece in the rail network for the region is the Second Avenue subway corridor and RPA expanded that vision in what we now call Metro Link which recommended that a Second Avenue corridor be designed in a way that it could also create new transit links with Brooklyn, Queens and the Bronx as well as northern Manhattan and the rest of the region.
And, Steve, why don't we turn this on. This is really one of the first parts of the vision, I think maybe the most important part of the vision, that I want to describe to you today.
This is the Metro Link system proposal. The hub of the thing runs the length of Manhattan from 125th Street south to Whitehall Street and that's, of course, what's gotten the greatest amount of attention. We had an enormous victory last week when the MTA adopted an amended capital plan that includes the commitment to the full bill Second Avenue subway and the governor and legislature made the commitment to go to the voters in November with a bond issue that will include the initial funding for the Metro Link project. So we've made a lot of progress. At first the MTA proposed only that the northern leg of the Second Avenue subway essentially stretching down to where the BMT express tracks, the blue loop that cuts to the left up there at 63rd Street, heads west under Central Park and that really wouldn't have done the job, certainly wouldn't have done anything for lower Manhattan or for Downtown Brooklyn. And so the commitment that we have now is to build the full length of the Second Avenue subway running from 125th Street down to lower Manhattan. There's obviously a much bigger job to be done and that is to build the links that extend out into Brooklyn which involve the construction of a new tunnel under the East River. So it's this link down here. This is the part that the governor and legislature committed to last week and which is, I think, an enormous step forward, but now we need to focus on the new crossing under the East River and a connection out to the Atlantic branch of the Long Island Railroad that would connect directly to JFK. Obviously, the important thing about this service is that it dramatically improves subway service for Brooklyn passengers, Brooklyn commuters to the east midtown employment hub. When the subway system was built in the early part of the century, I like to say New York has -- we have a wonderful subway system, in fact, it's the best early 20th century transit system in the world, but it was designed, for the most part, to get people to the then employment center in lower Manhattan and, of course, there's something like five times as many jobs in east midtown as there are in lower Manhattan and the subway system doesn't do a very good job of getting Brooklyn commuters to east midtown and our Metro Link Second Avenue subway proposal does that. These are the two lines which get you to midtown. The Lexington Avenue IRT does provide direct service now to midtown, but it's the single most congested service in the City and in the region and obviously gets you there, but gets you there very slowly with a series of stops in lower Manhattan that may be a distraction for most commuters to midtown. And, of course, with the cross platform transfer in Downtown Brooklyn or lower Manhattan, you can get to the upper west side of Manhattan. But it's lousy service to the region's employment center. With Metro Link that changes dramatically. In all of these subway lines, several subway lines, basically most of the subway service in Downtown Brooklyn now provides either a direct link to lower Manhattan and this, in fact, can be achieved, most of this can be achieved by using the existing Rutgers Street and Montague Street tunnels. And so with the commitment that was made last week to build the Second Avenue subway, the link to Manhattan, we believe that we can achieve a tremendous improvement in access between Downtown Brooklyn and the neighborhoods of Brooklyn and the midtown business district. And I can summarize our vision for the outer boroughs. I grew up in Queens, but it's the same issue in Queens and in the Bronx as in Brooklyn and Staten Island, is that we have a little problem in the City of New York that they -- Greater New York was created to promote the welfare of all five boroughs and this epithet, and I have to use that term because it's usually with a bit of a sneer attached, the bridge and tunnel crowd, that's an epithet here in New York, but what it reflects is the humiliating experience that the residents of the outer boroughs have to experience every day to get to the Manhattan business district and whether you take the subway or whether you take the bridges or tunnels, it's a humiliating experience. It's overcrowded, it's unreliable, it's not the kind of link that was envisioned when greater New York was created a century ago to provide benefits to all five boroughs. And what Metro Link is designed to do, and the other transportation improvements that I'll be talking about this morning, is to take the zing out of the zinger and essentially remove the epithet from that crowd. We don't want to hear that expression used ever again and I hope that when Metro Link and some of these other improvements are completed that, in fact, this City is going to realize the vision that our forefathers had for us.
Essentially what we see in this image is that with a new East River tunnel we get direct service that essentially runs out through central Brooklyn, and, this is the black line, is, of course, the direct link to JFK. One of the things that this does is make Downtown Brooklyn the most convenient business center of the region in terms of access to JFK and international business. We believe that that's going to become a major asset for Downtown Brooklyn in the years to come. Bills on the air train is already being constructed and provides access down the Van Wyck circulating to the airport and circulation around to the terminals and provides this one-seat ride from Downtown Brooklyn and lower Manhattan and ultimately from Grand Central that I think everyone is looking for in the region.
Why don't I go on again. This is really the heart of our vision and we've made enormous progress just over the past several months through the work of ESTA, the Empire State Transportation Alliance, this alliance of 50 business and civic and community organizations and transportation advocates from across the region. And I think the success last week in getting the commitment to building the Second Avenue subway, the full bill subway, we're about 80 percent of the way there and we have this modest problem, we need to go find several billion dollars to pay for it all. So this seems to be how we do things here in New York. We don't do things all and once and so ESTA is going to continue to be an advocate. We'll be working will all of you to make sure that this vision for a dramatically improved transit system serving the entire city and the entire region is achieved.
Let me just outline, again, the rest of this vision. We want to eliminate this epithet that is the bridge and tunnel crowd. We want to make the commute from Downtown Brooklyn to the rest of the city, Manhattan and the rest of the region, much more convenient, much more reliable. We want to create new capacity. And in the process we want to strengthen Downtown Brooklyn to make sure that it gets is fair share of regional employment growth. We want the links to Downtown Brooklyn to the rest of the regional rail system and the rest of the city's and the region's economy to be as strong as they are, for example, to the New Jersey waterfront. We want to see -- obviously as part of this and RPA developed working with Ken Adams and the Borough President's office, developed a master plan for downtown that proposed a dramatic expansion of cultural and recreational opportunities in and around Downtown Brooklyn. And that's a really important part and I think improving the amenity of downtown is vitally important. We share the vision that you'll be hearing about today for a revitalized waterfront, Piers 1 through 5, revitalization of the Red Hook waterfront, we're working now with Pratt Institute Center for Community and Environmental Development at Pratt and with a number of other groups, Municipal Art Society, and others on a series of workshops with the Red Hook community to develop a new vision for the Red Hook waterfront. We've been working in Sunset Park with the community board and others in their similar vision for a revitalized waterfront. And the most striking thing when you travel to other great world centers, whether it's London or Tokoyo or Paris or Barcelona or you name a place, Toronto, Chicago, San Francisco, that the waterfronts are where the revitalization is happening. First and foremost were the new amenities, the new communities, the new employment centers were being created and New York really has been left out of that equation. Far away exotic places like Jersey City are moving ahead with a revitalization of their waterfronts and we need to look across the river, we an enormous kick in the pants to get going with this thing. We've got to get past the controversy with The Port Authority over where the seaport is going to be developed and we need to move on from there and begin to create a mixed-use waterfront, lots of public access, high quality public spaces and so forth. And the very first steps in that process are underway with Piers 1 through 5 development process and others.
We need to strengthen the residential communities and links between residential communities and Downtown Brooklyn and the rest of the City, and I'll be talking in a moment about the set of transportation strategies that can do that, and we need to make sure that, again, Downtown Brooklyn and the waterfront get their share of the expanding employment sectors in the city's economy, the region's economy, the information technology, financial services and other growing sectors, which, quite honestly, have been expanding more rapidly in other parts of the City and other parts of the region than they have been in Brooklyn.
So we've outlined five transportation initiatives that we believe are going to be essential if we're going to realize this vision for Brooklyn and for its neighborhoods. And the first one, of course, is Metro Link and the completion of the connections under the East River out to the airport, direct service to midtown, and we can cut travel time by more than half in many cases from Brooklyn neighborhoods to the employment centers in the City and the region, provide commuter rail access to suburban employment centers and so forth. And so Downtown Brooklyn and the neighborhoods become the most convenient place in the region to locate a business or locate yourself if you want access to jobs elsewhere in the region as opposed to being one of the least convenient places. So Metro Link is really vitally important, perhaps the heart of this strategy.
The second element of our strategy is the Gowanus tunnel and RPA has been working now for the last four or five years on an initiative that we call urban friendly highways and the idea here is to take these elevated highways that I've come to think of as Robert Moses' gift to New York, sort of a upraised middle finger at Brooklyn and New York, and rather than rebuilding these things and continuing to commemorate Robert Moses' vision, let's have a 21st century vision for highways and really support communities and urban life as opposed to destroy urban communities. And the heart of this vision has been a proposal that RPA made a few years ago to replace the elevated Gowanus Expressway with a tunnel. I have to say the New York State DOT has actually been responsive to this initiative and NYSDOT is now studying the tunnel alternative as part of a broader major investment study for the Gowanus Expressway and this is not a preordained to succeed, it's going to cost an extra couple of million dollars, a couple of billion dollars rather, to build a tunnel, but it could have enormous benefits both in terms of mobility and the reliability of the highway system and, obviously, enormous benefits to the swath of Brooklyn neighborhoods running from Bay Ridge north to Downtown Brooklyn and Brooklyn Heights. And I think an additional problem, of course, is that our friends up in Boston with the central artery are giving highway tunneling a bad name. That's been a miserably managed project, the project manager essentially was removed last week, they made a series of incredible stupid decisions about the siting and alignment and design and construction of the project, makes life more difficult for us. Our project has been designed as a deep bore tunnel using automated tunneling equipment that's being used in the rest of the world, so it doesn't require a lot of disruption or a lot of the additional costs and delays that the artery in Boston has had. So we believe that this ought to be the prototype for other urban highways in the region. Gowanus has to happen first, opens up all kinds of opportunities for rethinking the BQE and others if we can make the Gowanus work.
A third transportation initiative that you'll be hearing more about later on is the proposed freight crossing, a freight tunnel, and we believe that this needs to be an essential part of a regional transportation strategy designed to reconnect Brooklyn and Long Island and areas east of the Hudson with a national rail transportation system. It has the potential to take thousands of 18-wheelers off the Verrazano Bridge and off the Gowanus and the BQE and off the City streets of Brooklyn and other neighborhoods in the city and we believe that this has enormous transportation, again, as well as economic development potential for Brooklyn and for the City and the region.
Fourth initiative, and I guess the fourth part of the investments that will be needed to realize the vision that I described above, it requires that we take a look at the transportation links between the waterfront, between residential neighborhoods in Brooklyn and Downtown Brooklyn and to this revitalized regional rail system, and RPA, with support from the Independence Community Foundation, is beginning an investigation of these links. You know, we basically need to go back to-- take a look at where Brooklyn was in the 1950s and everyone knows that Brooklyn lost the Dodgers in the 1950s, but not all of us remember that Brooklyn lost its trolley service in the 1950s and thank you, Mayor LaGuardia, but, you know, this has been partially replaced by bus service, but not fully replaced. And so we're going to be looking at a range of options, including van service and improved bus service, but also looking at the potential to create light rail lines like the one that has just opened on the Brooklyn waterfront, and again, another RPA plan in the 1970s laid that out and called for that investment and we believe that light rail may have a real important role in Brooklyn. We have this additional challenge of reconnecting a set of revitalized neighborhoods with the regional transportation system and the opportunity to create water taxis and commuter boat service that would serve these neighborhoods we think is vitally important. So we'll be beginning that study this spring and with goal of completing it by the end of the year. We'll be creating a large steering committee and advisory groups and so forth to guide us as we go through that process. We expect to see many of you in that process.
The fifth initiative, transportation initiative, that I would like to outline today, and this is really something that we haven't made a lot of progress on yet, but that we're beginning to pursue at RPA and I think that region is going to begin to pursue, and that is the goal of turning our highway system, and we have -- RPA laid out a highway system for the region in our 1929 plan that was built by Robert Moses and others in the 1940s and '50s and '60s. By the 1960s we created the largest urban highway system in the world, but it's now, in many cases, 60 or 70 years old, it needs replacement in some cases like the Gowanus needs new investment, but we also need to manage it a lot better. So we're proposing that the region's highway system, again, the first 20th century metropolitan highway system become the first 21st century metropolitan smart highway system. And this would include several features. The first is value pricing. We need to introduce pricing on bridges and tunnels and highways, and I know this is very controversial, but how long are we going to wait to begin to reduce congestion on the East River crossings. Why do we have to accept that Adams Street and Tillary Street and Flatbush Avenue essentially function as virtual toll plazas? In the absence of tolls on the bridges why we get queueing that backs up through Downtown Brooklyn turning most of Downtown Brooklyn into a series of traffic islands surrounded by toll plazas through most of the day. We believe that a value pricing system in which tolls would be instituted, automated tolls using EZ-Pass technology and using peak period tolling to discourage discretionary trips during peak periods, encouraging off peak trips and so forth, using the proceeds to build things like the Metro Link connections to Brooklyn and to the rest of the region and so forth so that we do create viable alternatives to people that have to get across the East River. So that's one feature of a smart highway system.
Secondly, we need to improve incident management, that's something like 70 percent of the delays on the highway system have to do with traffic incidents. We've made some progress, but we need to make more in making sure that the police response and tow truck response and so forth is dramatically improved.
Three, we need to introduce new information systems so that drivers get real time and on-board information about delays and alternate routes and so forth. We need to create a set of intermodal links the way Boston has and Chicago is doing and other great cities across the country and around the world have so that drivers really have the opportunity to leave their cars and use the improved transit system.
And then finally, as I mentioned earlier, we need to create a vision for community friendly highways. We've got to get these elevated highways off our waterfronts and out of our neighborhoods and, again, the Gowanus is the prototype for what we think we will be a network of community friendly highways.
Those are five major initiatives, many of them underway already. They'll need your support, they'll need the support of Congressman Nadler and others in the room to make them happen. Again, a completed Metro Link Second Avenue subway system with direct links to Brooklyn and to the airport and so forth, the underground Gowanus tunnel, the new freight link under the Hudson and the rail yards and so forth needed to make it work. I should add, too, that RPA's interest in the tunnel is in part predicated by the notion that we could use the tunnel to get our solid waste under the Hudson going west without having to have all of the transfer stations in the city neighborhoods and the marine transfer stations and so forth occupying the prime sites on our waterfront. Improved transportation links is the fourth thing between neighborhoods and Downtown Brooklyn and the transit system and the waterfront, and then finally the conversion of our existing dumb highway system into a smart highway system that creates new mobility, but also makes the highways work for neighborhoods and for Brooklyn, not just as conduits for traffic through our neighborhoods and to other parts of the City and the region.
So that's the vision and it would be interesting to hear the reaction of the audience and the panel.
MR. WOLLMAN: I don't know about you, but Robert Yaro sets my head spinning every time I hear the scope of the vision and the thinking on the broadest macro levels about the future of the City and its region.
Carolyn Konheim heads an environmental and transportation planning firm in Brooklyn and also chairs Community Consulting Services, a not-for-profit organization to help community leaders with their need for technical assistance.
Please welcome Carolyn Konheim.
MS. KONHEIM: I have lots of wonderful images for you to see, so I really wanted to go through them very quickly.
I'm going to be talking more from a community perspective on a lot of these issues. As much out of love for Brooklyn as everything that you've heard in terms of booster in Brooklyn, but these are things that we hear working for community groups.
I'm eager that Congressman Nadler see this too because we have a funding application that he is promoting with the Congress and we're going to see a few of those images.
You've been hearing about, and you will be hearing more, about a lot of these exciting plans. One of them is the Downtown Brooklyn traffic common study which promises to transform the pedestrian environment of Brooklyn and all of these other things that are going on. But one of my favorites is this new gateway to Brooklyn, a bike-pedestrian bridge which was conceived of by citizens and is being promoted by the City as a new exclusive pedestrian bridge off the Brooklyn Bridge into Cadman Plaza Park, so we'll have a much more urban friendly arrival into Brooklyn. But on these plans we really have to think of the practical effect of the plans. Do the plans complement and reinforce each other? Are they shaping regional plans and policies? Do private investors find the plans a rich source of ideas and are they specific and certain enough to reduce investor risk in investing in the future? In our studies of cities abroad, this is one of the most important parts of planning is to make the future predictable so that you get private investment. Do the plans provide an agenda of priorities for elected officials? I think that's part of the problem, there are so many different directions. Do they provide a context for community boards to evaluate development proposals and do they have such a strong and widespread public buy-in that they will survive the changes of political administration so that we don't start over again each time?
I think the answer to most of those questions is no. And because of that, we desperately need a strategic plan for Brooklyn, a county plan, a smart growth plan and as these other areas around the state and around the country are embarking --
(END OF TAPE 1)
(BEGINNING OF TAPE 2)
MS. KONHEIM: (Continuing) -- and our cost increases in rentals and housing prices are the highest in the City. Affordable neighborhoods are very difficult to find, as Ken Adams said. And every neighborhood complains about being invaded by trucks. We know they're important for the economy, but they're not in the right places. Community boards face a myriad of decisions constantly about how to deal with development proposals. They don't have technical expertise to evaluate them. They have to rely on intuition and their general understanding of the neighborhoods. They're very reactive. They do not have the sense of where they want to go for each of their areas except for the few that have undertaken 197A plans. There's only the vaguest notion of underlying regional plans and policies that are developed largely through the State agencies and it's these major, ongoing transportation studies that are really going to shape what's going on. What you see here, that whole purple area of South Brooklyn, everything south of Atlantic Avenue, is going to be the subject of a major investment study that's just beginning and, unfortunately, well, I won't say fortunately, but unless we all get involved, these studies are really looking at Brooklyn more as a place to pass through, a land bridge rather than a destination. And the toll practices on the Verrazano Bridge and the combination of the free toll in the eastern direction tends to bring much more traffic in our local roads. At the same time in the northern part of the borough, we're going to be facing another major investment study on rebuilding the Kosciusko Bridge. We have the Gowanus. All of Brooklyn is being subject to a major reconstruction thinking and that's going to shape our future, but people are really not involved in that.
Now, this is probably the saddest thing of all: You've heard about some wonderful long-range plans for transit, but right now that MTA capital plan does nothing for Brooklyn in terms of the new construction. We are the county with the largest number of transit riders and we're getting nothing more than fare hikes out of that new plan. If we invested less than five percent of the total cost of those big ticket items in projects that are ready to go in Brooklyn, we would cut more travel time faster and in just a few years than all of those long-range plans. This is just one example.
If we opened up the express line on the F train, we could serve as many riders as would be served by this four-billion-dollar link that will be built to Grand Central for Long Island Railroad commuters and at one-thousandth of the cost and we could do it in the next few years, and we would, therefore, if we did that we would make Coney Island and Gravesend and Park Slope and all those places, much more competitive in attracting families because why spend over an hour of commuting from these places if it's easier to do so from Nassau. So we are really penalizing the closed-in areas with this kind of plan and we're fostering the affluent and by that I mean the blue and green areas are the affluent areas surrounding our central city. And the region itself cannot continue this unbalance. The growth is all slated to a curve in the outer counties that you see with the greater shading. If you look at this graph of the forecast of population, Brooklyn, the red line, never regains the population that it had in the 1970s, or prior to the 1970s. We obviously can sustain much more population, but the population growth is slated to go into the suburbs where they don't have the infrastructure to handle it and the don't even want to build it. We needs plans that redirect these trend based forecasts. If don't participate in doing this in an affirmative way, the investment will be a self-fulfilling prophecy and Brooklyn, as you see in the red line here, has practically flat job growth in the forecasts that are made by MEMTIC (phonetic) compared to a million jobs that would be growing in the suburbs. How can they possibly build an auto based transportation system to serve a million more jobs in peak hours there? We can do it here.
We need a smart growth plan for Brooklyn, one that fosters an appealing quality of life, strategies that have staying power because there's wide involvement in them, they're developed by diverse stake holders who have full information to do it. In order to do this we need a database. We do not have a single place where you can go and find out all the information about Brooklyn with means to be accessible through the internet and is being done elsewhere. This kind of thing can give you the kind of visual relationships between the people who drive to work alone, down in the lower part where it's red and yellow, compared to the subway line. We can see capital projects that can be seen in relation to each other so that they don't get in each other's way and we can track projects through this kind of thing. With land use GIS that would be based on this and very community focused sections of this so that each community can see its assets, its needs and plan its projects from this kind of local perspective.
The next steps in order to achieve this are, number one, an urgent call to Albany to invest now in some of these low-cost Brooklyn transit options and we have distributed for you a list of what those would be. We need seed money to design and organize this all-inclusive planning process. We need support for creating a Brooklyn internet GIS as a planning database and we should reconvene everyone in this room to embark on a plan for a greater Brooklyn.
MR. WOLLMAN: I'd like to thank Carolyn Konheim for joining us and for, in effect, dealing with this intermediate scale of planning issue between division of Barbiero and the Regional Plan Association and the capacity of the private sector as represented by David Walentas in speaking about his ideas and his vision and his development plans for DUMBO.
I'd like to welcome David Walentas, the owner and president of Two Trees Management Company. Two Trees controls over two million square feet of mixed-use space in DUMBO, that means Down Under the Manhattan and Brooklyn --
A VOICE: Manhattan and Brooklyn Overpass.
MR. WOLLMAN: Bridges and has announced a three hundred million dollar plan to transform a 26-acre - I'm not good on those acronyms, so you'll have to forgive me - a 26-acre waterfront parcel of public and private land into a recreational and cultural destination. Master planning for this district was carried out by Beyer Blinder and Belle, landscape architect Paul Friedberg, and French architect Jean Nouvel.
Please welcome David Walentas.
MR. WALENTAS: Good morning. DUMBO really stands for Down Under the Manhattan Bridge Overpass. It was spectacular this morning. I woke up in our loft in the clock tower building, 3,000 feet, it's the entire floor in the clock tower. The views were spectacular. The sun came up in the east and lighted the Brooklyn Bridge, the Manhattan Bridge, lower Manhattan, the Statue of Liberty. It was spectacular.
It's really an exciting time for us to be in DUMBO. Over 20 years ago I walked through the district and fell in love with the historic Empire Store buildings, which are 350,000 feet in landmark Civil War warehouses that were, fortunately, purchased by the State. Con Ed owned them at one time and was going to demolish them and put up a power plant. Fortunately, that didn't happen. The Gair and Sweeney buildings, which make up the rest of the neighborhood, were over two million square feet, most of which were built by Robert Gair at the turn of the century. Robert Gair invented corrugated paper and the buildings were made to manufacture cardboard boxes. At that time they were owned by Helmsley-Spear. They were rented for, I don't know, two dollars a foot and somehow we put together the money and purchased two million square feet for twelve million dollars. Seems like a bargain purchase today, but for many years I think people thought I was the dumb in DUMBO.
Our plan has always been to create a world class mixed-use neighborhood in the district. The area has natural boundaries, for those of you who don't know, it's located between the Brooklyn and Manhattan Bridges, the East River and the BQE. So it has very distinct natural boundaries. Virtually all of the land in the district is owned by ourselves, by New York State Parks and by the City of New York, which gives us an incredible opportunity to control and orchestrate the uses within the district. Fortunately, over the last several years the uses in the back buildings, the Gair and Sweeney buildings, have gone from tertiary manufacturing, which we all now has been going out of business for all my life and probably longer, in New York City and the evolution has been to artist space. In the last ten years several hundred thousand feet has been converted to artists' studios for working and not living. There are illegal artists living in some of the buildings in the Vinegar Hill neighborhood above the Manhattan Bridge, but we've been very careful to keep our uses legal. Fortunately, two years ago or three years ago now, time flies, the City rezoned a couple of our sites to permit, from M3, to permit residential as of right and we converted the clock tower on the waterfront into 260,000-foot building to high and condo units. The banks wouldn't give us a loan. They kept saying who's going to live in a derelict neighborhood, where's the grocery store, what are the comps. We started with our own money. We finally took down a high rate loan, we completed the construction in about eight months, sold the apartments out for 70 million dollars in six months. It's been a huge success and more so it really quantifies and justifies our faith in the neighborhood as a mixed-use, residential, commercial, retail center on the waterfront. Since that time we've converted a couple of more buildings to residential rental apartments. Our artist spaces continue to develop and recently we have rented several hundred thousand feet to the new e-commerce digital industry. I'm not sure what it all is, but we've been designated by the City as a new e-commerce district. We are rewiring all of our buildings to accommodate the businesses and, as I said, have several hundred thousand feet either in occupancy or in negotiating leases. One of the big problems is we ask them where the beef is. Most of them have great plans, but no money, they have ideas. We'll probably win some and lose some.
In addition, with the new activity we now have grocery stores, restaurants, we have a wine store that's signing a lease, we have a chocolate factory that's going to move in. It's an exciting time to be there.
So that deals with our back buildings and I think that they will continue to evolve. We have a couple of sites that we can do, I think, new construction for residential. It's important for us to keep a balance between the residential and the commercial. We'd like for it to be a 24, seven-day a week kind of neighborhood.
The plan for the waterfront, which we've been working on for almost for as long as we've been there, is really outlined in the brochure. Did everyone get one? I think we probably didn't bring quite enough, but I didn't realize this was going to be so popular. This was put together last year. There are three major pieces to it and the ground rules were that the plan had to be self-financed, there would be no public subsidies for capital costs or for annual property expenditures. And the second was that we had to maximize the public open space and provide public access to the entire waterfront. I think the plan does that extraordinarily well. There are three pieces to it, the landscape plan, it's on Page 7 of the brochure, 6 and 7, if you have it there, takes what is now a three-acre New York State park, I think it was written up years ago as being the worst state park in the State, the State has done very little with it in the 25 years that they've owned it, it has a chain link fence around and even today with the sun out there will be fewer than five or ten people in the park. Our plan takes the whole district from Fulton Street, incorporates the City land under the Brooklyn Bridge, the State park land, the City land under the Manhattan Bridge and land currently owned by Con Ed between Adams Street and Jay Street, which is now a vacant parking lot, and creates a 12-acre public park that runs three-quarters of a mile from Old Fulton Street to Jay Street with a 40-foot wide promenade along it's entire length. There are a variety of uses in that park. There are open spaces, there are activity spaces, there's a 60-boat marina and it's an ecological park. So there's a different rhythm to the waterfront, depending on where you are.
The second important piece to our plan is the adaptive reuse of the Empire Stores. The Empire Stores are landmarked, as I mentioned before, landmarked Civil War brick and timber warehouses, four and five stories. Our plan there incorporates, again, a variety of activities. The ground floor and second floor we propose a neighborhood retail off the street, widely criticized as being a shopping mall. It's not a shopping mall, it's not a center mall, it's street parking. Water Street becomes the major shopping street with shopping on both sides of the street. The Empire Stores are on one side. Our buildings, we own the entire other side of the street from Fulton Street to the bridge, some of that has already been converted to retail, we see it as a pedestrian street like any other shopping street, whether it's Montague Street or Madison Avenue, loaded off the street. The upper floors in this plan are going to be for museum and gallery space, exhibition space. The Empire Stores, unfortunately, have very low ceilings. They were warehouses before forklift trucks. The clear space is ten or eleven feet. One proposal is to take out the third floor and make it a double-height space for a gallery and exhibition spaces. Another use which we are now looking at because of the demand is to convert the buildings on the upper floors to e-commerce space, maybe some of it for incubator space for a company starting out, Brooklyn Polytech we're talking to. We'll see where that plan goes.
The rooftop of that building is an incredible resource. The views are spectacular. Our plan there is to create an additional two-acre public space on the roof of the Empire Stores. The views are spectacular, it's open, it's underutilized and it's completely underutilized now. Could be a sculpture garden, it could be a restaurant up there. Everyone in the City would want to come there.
The third major piece to our plan is the redevelopment of the City-owned parking lot by the Manhattan Bridge. For that Jean Nouvel has designed we think on of the great new modern buildings anywhere, which is a 250-room hotel with a 16-screen multiplex at the base. The hotel would be cantilevered out over the river with views up and down the river. We have some sketches here, computer generated plan that Jean Nouvel did. We were overwhelmed by the plan. We think that a hotel of this caliber set between the bridges complements the Brooklyn and Manhattan Bridges, the Empire Stores, the Gair and Sweeney buildings, and becomes an icon for the 21st century and all by itself could change the view of Brooklyn in the eyes of the world. It could lead Brooklyn into the 21st century.
There are two parking garages planned under the bridges. Under the Brooklyn Bridge is currently a DGS garage, Department of General Services garage, which (inaudible) by the police. That would be replaced by a thousand-car garage. And another garage under the Manhattan Bridge, which is a noisy, inhospitable place with the trains running over the Manhattan Bridge. As a matter of fact, when we talked to DOT about putting a garage there they said, well, you'd have to put a roof on the garage, you can't park on the roof because, you know, things fall off the bridge. Parking is essential if we're going to bring people to the waterfront. People in Brooklyn and Queens have cars and use them. The auto access to the neighborhood is excellent. There are exits off the BQE in both directions and the neighborhood is now actually very quiet.
That's our plan for the waterfront. It's three hundred million dollars, no public subsidies. As a matter of fact, the City and State would be receiving, I think, two million dollars a year of payments in lieu of taxes and land rent for their property and there's about 20 million dollars of additional tax revenue that would be generated for the City and State each year.
If anybody has any plans, I'm better at answering questions and developing than I am at speaking, but I think this gives you an idea of our vision for the waterfront.
MR. WOLLMAN: There are copies of this out in front. There may not be enough. With the help of the Walentas organization, we'll try to get more for those of you who might leave your names in my (inaudible).
I'd like to introduce Constance Damon, a Partner at Hamilton, Rabinovitz & Alschuler, Inc., which provides management and consulting services to public, private and not-for-profit organizations. Ms. Damon has managed the planning activities related to the proposed Brooklyn Bridge Park on behalf of the Brooklyn Bridge Park Development Corporation. Other clients have included the Brooklyn Museum of Art, the Brooklyn Academy of Music. She currently serves as the president of the Atlantic Avenue Local Development Corporation.
Please welcome Constance Damon.
MS. DAMON: Just a couple of seconds of introduction. The Brooklyn Bridge Park Development Corporation is a 15-member volunteer board appointed by the elected officials representing the immediately abutting districts and by some major community organizations that have been active in the area. They hired my firm essentially to act as staff to them because they've chosen to go without any staff, as well as their financial and strategic advisors. We got involved I guess about a year ago and what you're about to see today is a preview of what we'll be sharing with the community. I recognize a few faces. We're going to be seeing this in much greater detail in about two weeks. This is a culmination of about a year's work where we will unveil a draft master plan for the Brooklyn Bridge Park.
First, since many of you don't know the site, a moment just to talk about where we are. This is a 1.3 mile stretch of Brooklyn waterfront, about 70 acres in total, that moves from, at the south, which is shown on this map, the far right, almost Atlantic Avenue, which is The Port Authority owned Pier 5 all the up through and just past the Manhattan Bridge and, therefore, includes a portion of the land about which David was talking. So, we're going to spend a few minutes talking about a slightly, but interesting, not entirely, incompatible vision of that portion of the site, but it is the entire site, from Pier 5 through the Manhattan Bridge that we've been planning for, and the map on the lower right puts it in context in the harbor. The land about which we've been worrying is, with one fairly minor exception, completely owned by the public sector. The southern stretch, about 70 percent of the total site, is owned by The Port Authority. This is the site that Lillian spoke to you about earlier. And then there is a stretch which David was describing -- well, there is a small city-owned stretch of Fulton Ferry Landing and the stretch that David was describing, which is the State-owned park and past that, again, is City-owned land. So, The Port Authority has indicated in purple, the light yellow is the City-owned and the green is the State-owned land.
Now, it's a stretch of land that, unsurprisingly, given its length, stretches past a series of very feeling and fairly diverse neighborhoods. First, the so-called interbridge area, or DUMBO, which is this wonderful gray urban feel which David was referring to earlier. Then moving down south to the Empire Fulton Ferry State Park, this is the State park which David was describing to you earlier, which is this lovely green lawn with a boardwalk looking out at lower Manhattan, then the Fulton Ferry Landing, which the City has invested in quite heavily in the last three years and which is now one of the most popular wedding spots and tourists get out and look at the view spots in the City. Piers 1 through 5, which is the major Port Authority-owned stretch and the vast majority and the bulk of the land which has this industrial warehouse feel, and finally the Atlantic Avenue entrance from the BQE up into central Brooklyn and from the piers.
So, the plan and how we got here. First of all, a little history. As Lillian described, The Port Authority determined some 15 or 20 years ago that Piers 1 through 5 were no longer viable as warehousing and pier type facilities and it attempted over the years, sometimes with the City, sometimes with the State, sometimes on its own, to advance a series of development proposals. Most of those were vigorously rejected by the community which, over time, became more and more active and more and more organized and eventually came up with what it calls the 13 guiding principles. For our purposes, there are two of the 13 guiding principles that are particularly interesting. One that requires the site to be developed as park land to the maximum extent possible with public access to the waterfront preserved. And another which suggests that while capital monies may be obtainable from the public sector, but on an operating basis this park is going to have to be self-sustaining. And figuring out how those two principles work together has been the major and most interesting challenge of our work.
I think the first thing that that's suggest is that you're going to see it makes uses in this park, uses that are civic and cultural and which break even, uses which are classic park uses and will have to be subsidized and uses which are compatible with the park, but which are revenue generating. What those uses are has clearly been one of the most spirited parts of the debate that we've been leading.
So, that eight-month process which began with a fact-finding mission undertaken in collaboration with the community which has been undertaken through a set of public meetings, community focus groups and workshops where the community has actually worked with the planners that we've retained, has moved forward into a series of very small community based meetings and even one-on-one meetings, has resulted in a draft master plan which was shown in its largest form here. A master plan that suggests moving from the south, that Pier 5 which is the pier not the furthest to the right, but the next one, would be redeveloped as a major indoor active recreation center, that the central portion of Piers 1 through 5 would be developed as a green heart with a kind of classic park facilities that we all think as the 19th century model of a park in New York City.
Moving onto Pier 1, which is the large pier almost in the center of the screen, positioned differently from the other piers, would be the active center of activity where out revenue generating uses would be concentrated, restaurants, potentially a hotel. Moving to the north, that we unite the two stretches, The Port Authority stretch, the City and State stretch, by creating a great plaza, New York's answer to the Plaza de San Marco, into the State park area where the natural wetland condition is recreative, and that's a notion that State Park has very enthusiastically endorsed, and into and past the Manhattan Bridge area creating a new community facility for that area which is very underparked and very industrial feeling now. But the fact of the matter is that at the end of a process like this, what you have is an enormous amount of research and an enormous amount of analysis, an enormous amount of critique from the community about the analysis you've undertaken. And you need a way to organize it and to start to think about what it is that you're actually presenting and to try and evoke the vision of what could be.
What we're going to be presenting in the next several weeks is a day in the life of Brooklyn Bridge Park. So I want to start to walk you through this section by section, portion of the day by portion of the day, what we believe could be there and in a reasonably sort term.
At dawn we envision us being the kind of recreational resource that other parks in the City have been so that runners potentially from David's buildings are making the two and a half mile loop through the park, in-line skaters are entering the park from the Cobble Hill neighborhoods to the center of Brooklyn down into the park. Park workers could both cycle and take small vehicles through the roadways of the park which would be dedicated to park maintenance vehicles. Joggers could also enter the park across the Brooklyn Bridge and down a new stairway evocative of the stairway that was originally on the Brooklyn Bridge when it was built, which would link the central tower of the bridge to the park itself. Hotel guests staying on Pier 1 could look out over lower Manhattan. Visitors would arrive on water base transit at the Fulton Ferry Landing which, again, is the small pier right underneath the Brooklyn Bridge. Open air markets would operate in front of the hotel and Brooklyn Heights would come to shop there, to shop at florist stands and vegetable stands and meat markets, and skateboarders could be working out underneath the skateboard park under the Manhattan Bridge which is, admittedly, very noisy and, therefore, its uses are constrained. At lunchtime you would expect to see office workers coming to eat in the restaurants and residents taking a day off or who are on vacation picnicking in the green heart in the center of the park. In the Empire Stores gallery space on the ground floor would attract tourists and visitors from throughout the region and a structured formal garden in the tobacco warehouse would attract visitors as well. As the afternoon winds down, visitors would stroll through the natural condition that had been recreated in Empire State Park, that's the Empire Stores building renditioned in the background which David spoke about earlier, as well as one of the buildings that he's been working on.
On Pier 2, in the center of the green heart, a lawn which could be reprogrammed for different kinds of activities, it can be used as a soccer field, other residents are taking in the view. As the afternoon winds on people cross from the Brooklyn Heights neighborhood over a new connection from Brooklyn Heights through Swift Park, pass by basketball courts where kids are showing off their skills for the people entering the park. They would move through the park and use swimming facilities at the edge of Pier 1. Dinner then could take place as the sun set over Manhattan and you could move to an open air concert in an amphitheater on Pier 3. And finally, as the park becomes more popular, we envision ferry and water transit access from the Main Street pier, from the Fulton Ferry pier and from Pier 5 or 6 at the southern end of the park which would permit the people to take moonlight cruises up and down the East River.
Now, that's the vision of the park at build-out. We think that this an incredible opportunity and now is the time to move and some of the other speaks this morning have said, and I think other people that's you're going to hear will say, that the implication of a lot of what you've heard about the future of Downtown Brooklyn is that we need to amenitize Downtown Brooklyn. This is an extraordinary opportunity to do that. It's also an extraordinary opportunity to improve the quality of life in a diverse group of communities that immediately abut the park and the larger group of communities further out into Brooklyn. Brooklyn is, as you probably all know, the least parked county in all of New York State.
And finally, it's an important opportunity to take because we're at one of those rare moments when the mayor of the City, The Port Authority, the Borough President, all agree that something has to be done and that this is a good thing to try. We have an incredible strategic opportunity here and I hope that you will all work with us in the coming months.
MR. WOLLMAN: I'd like to thank the members of the third panel for joining us this morning and I'd like to ask the members of the fourth panel, including Representative
Jerrold Nadler, if they would take their seats at the table. We are running about ten minutes late. We will catch up, or we may not catch up, but there will be food yet and coffee in the back as we finish. So, once again, I'd like to thank Candace Damon, Robert Yaro, David Walentas and Carolyn Konheim for giving of their time and energies this morning and sharing their own particular institutional activities in regard to Brooklyn.
I'd like to introduce Representative Jerrold Nadler. Representative Nadler represents New York's Eighth Congressional District, which includes parts of Manhattan and Brooklyn, in the U.S. House of Representatives. He serves on the Committee on Transportation and Infrastructure and on the Surface Transportation and the Oversight Investigations and Emergency Management Subcommittees. Representative Nadler previously served in the New York State Assembly.
Please welcome Representative Jerrold Nadler.
REPRESENTATIVE NADLER: Thank you very much.
Can we begin by thanking the Newman Institute for holding this conference and inviting me to discuss some aspects of economic development in Brooklyn and the region.
As we begin the new century it is good to look to the past for some hints as a guide for the future. We have a great opportunity to enhance the economic power of Brooklyn and the employment opportunities in Brooklyn to reflect more fully what it once it had, but no longer enjoys. In the 1940s and '50s Brooklyn was a working class city that provided real opportunities for its residents. By 1960 the borough employed almost 1.1 million people, 30 percent of them in manufacturing jobs. Unemployment in the borough stood at five percent and 52 percent of Brooklyn's employed residents worked in the borough. Downtown Brooklyn thrived as a center of diverse multiracial community where people were employed in both the private and public sectors. Brooklyn's waterfront and manufacturing areas were massive centers of employment. But in the last four decades much has changed. Our port was devastated as the industry shipping moved to containerization and as The Port Authority moved the port to New Jersey and as manufacturing and jobs went along with it. At the same time over the last three decades our city and Brooklyn have increasingly concentrated -- our city government has increasingly concentrated all of our economic eggs in fewer and fewer baskets, principally in the so-called fire industries, finance, insurance and real estate. By the 1990s Brooklyn's employment base had substantially shrunk and manufacturing jobs no longer comprised 30 percent, but 11.7 percent of its job base.
It is imperative that we reevaluate our economic priorities. While we certainly do not want to forsake white collar jobs in our quest to reindustralize Brooklyn, we must diversify the jobs portfolio not only in Brooklyn, but in New York City. The provision for Brooklyn must continue to include white collar jobs in such places as Metro Tech and blue collar jobs in the port and increased manufacturing enterprises. We must stop thinking of our manufacturing base as something that will inevitably disappear, as we too often do in New York, and instead we should work to protect it and enhance manufacturing in their quest to produce in Brooklyn.
The fact of the matter is cities should be designed and built and maintained for the benefit of the people who live in them. That means that jobs and the job base should be designed and maintained, to the extent you can, to provide jobs for the people who live in the City. We have about a million people in New York City today, adults, who lack high school diplomas, who are not going to get any kind of jobs in the white collar job field or the dot coms that are coming up and while the white collar job field, the dot coms and so forth must be spurred and supported, they are not enough. We cannot simply wring our hands and say that all these other people will be unemployed. The loss of manufacturing jobs that the City has suffered at a rate of six times the national rate of loss of manufacturing jobs was not inevitable. Cities that have followed more intelligent policies, such as Los Angeles, have actually gained manufacturing jobs and are continuing to gain manufacturing jobs and the reason I stress manufacturing jobs is not simply that's it's nice and that's it different than what we have, than most of what we have, but because manufacturing is traditionally been the source of entry level jobs for new immigrants and for people without education or without adequate education and has traditionally provided avenues for internal upward mobility in manufacturing where it exists still does. As I said, we have lost manufacturing jobs in New York at a rate six times the national rate, we have regarded, our government has regarded that loss as inevitable. This was a great mistake and we have, in fact, followed a series of policies that have pushed it out, some of these much faster than necessary. Some of these policies were in manufacturing, some of them were in land use and so forth. Now, one of the great reasons we lost manufacturing -- some of the manufacturing we lost was inevitable. You can't compete with certain kind of low-wage jobs in other countries and so forth, but much of it was not and is not. Some of the reasons we lost manufacturing jobs unnecessarily were the lack of transportation. When the rail freight, and I'll come back to rail freight in a few minutes, but New York City used to have a wonderful rail freight system. When all the northeast railroads went bankrupt in the last '60s, essentially because government was subsidizing their competition in the form of the interstate highway system and didn't notice the impact, government noticed a crises where the northeast railroads are going bankrupt. There were, in fact, two crises and New York government noticed one of them. One crises was that with the shutdown of all the railroads, the commuters who lived in New Jersey and Rockland County and Orange County and Westchester and Long Island, were not going to be able to get to their white collar jobs in New York. Well, government met the challenge. It essentially nationalized the commuter parts of the former New Haven-Hartford in Connecticut, in Pennsylvania, New York Central Railroads and created what we today know as the Long Island Railroad Metro North and New Jersey Transit so the commuters could continue to get into the City. But the fact that those same railroads which are shutting down also brought the freight, the raw materials for New York City's factories in and the finished goods out and that they were shutting down, escaped the notice of government planners in New York in the late '60s and as a result some interesting statistics emerged.
In the six-year period from 1963 to '68 inclusive, the City of New York lost 53,000 manufacturing jobs. In the period from 1975 to '81 inclusive we lost 51,000. In the middle period from 1969 to '74 we lost 289,000. What changed? What variables? We didn't suddenly triple taxes in 1968. The only thing that changed was that the surviving railroads shut down the rail floats that floated across the harbor into New York City. In 1968 we floated 350,000 rail cars on barges across the harbor. In 1969 we floated 5,000. 350,000 to 5,000 in one year. Last year we floated 7,000. We haven't recovered. In 1968 we lost 12,000 manufacturing jobs. In 1969 we lost 66,000 manufacturing jobs. As if you turned off a light switch. So it's an extra 240,000 job loss in a six-year period, entirely explainable by the shutting of the rail floats and no one reacting to it.
The manufacturing companies tried to get their stuff in and out by truck. It was much too expensive. They left. And you see the devastation most directly in Brooklyn. If you want to take a walk along the Bay Ridge line from Bay Ridge through Brooklyn and Queens almost to the Grand Central Parkway where LaGuardia, you will see a stretch of territory, about eleven miles long by two blocks wide, of devastated abandoned factories, half of them quite young when they were abandoned in the late '60s and early '70s.
So we lost our rail freight and we became the only city in North America where everything comes in and goes out by truck and that destroyed, to a large extent, a large part of jobs base, it pollutes our air, it tears up our infrastructure, our highways, destroys our water mains, clogs our streets, Carolyn Konheim referred before to all the trucks in all the neighborhoods in Brooklyn. That's part of the result of the fact that we allowed the rail freight system to fall apart in New York and didn't do anything about it. We'll come back to the in a few minutes.
In addition to that, if you're talking about manufacturing, we have encouraged instead of discouraged the conversion of manufacturing space to commercial or even residential space. If you talk to manufacturing at any point, manufacturers in New York City and in Brooklyn especially, at any point in the last 30 years, including today, you will find out that their greatest need is for space. Their greatest need of existing manufacturing companies is space to expand, affordable space to expand, and they cannot find it. Why can't they find it? They can't find it because they're in competition with other uses that pay a lot more. All manufacturing zoning in New York is convertible as of right to commercial space. Commercial space will typically pay six to eight times as much per square feet as manufacturing. So any time the commercial economy is doing will, it pushes out manufacturing. And if you don't care about the job base in the City, there's nothing wrong with that. If one job is as good as another, there's nothing wrong with that, but the City ought to be able to handle a commercial job base as well as a manufacturing job base and in places like Chicago and Portland, they're doing it very well. In Chicago and Portland they have what they call - I forget what they call them in Chicago and Portland - what we've called them in New York when we've advocated them over the years, are super manufacturing zones, they call them planned manufacturing districts, PMDs, in Chicago, and these are areas manufacturing zones which are zoned as manufacturing, period, which you cannot convert as of right to a commercial or any other use other than manufacturing. What that means is that the market cost for space in that area will be governed by what manufacturers can pay because you've made a determination to save manufacturing jobs in the City. And, of course, some people will object that land should be used to its highest and best use, but that's against the free market. The free market should dictate the highest and best use of land.
I believe, and this is a controversial, political question, but I believe that that's a shortsighted view. That we need all kinds of land uses in the City, we need a diversified job base in the City and we cannot permit the highest and best use of every parcel of land to eliminate or greatly reduce a major job base that we could have for people who are otherwise going to be unemployed and it's a direct result of this policy the City's unemployment, contrary to 30 years ago when it was much less than the national unemployment rate, is now generally about twice as high as the national unemployment rate, whatever that is. It varies, obviously, that the national unemployment rate is four point something percent, out unemployment rate in New York City is going to be nine point something percent instead of lower, which it would have been 30 years ago. So we ought to make some of our manufacturing zones planned manufacturing districts, as they call them in Chicago, or super manufacturing zones where you can't convert them without special permission or without a variance where you cannot convert them to any other use than manufacturing and you can provide space for the white collar, you can provide space for the dot coms, but you also must provide space for the blue collar jobs in New York. We should regulate land use so that it promotes economic development of all sorts and so that we don't put our city's economic eggs in few baskets.
Two additional areas for economic growth clearly present themselves. Sea borne trade, like air traffic, is moving to a pattern of hub and feeder ports. Ten or 15 years from now, there will probably only be one major hub port to handle the bulk of the east coast shipping business. 15 years from now if you want to ship a bulk good, piano, from England to the United States, you'd probably put it on a ship in Liverpool, that ship will go to Rotterdam where the piano would be put on the big ship that will come across the Atlantic to the hub port on the eastern seaboard which will be either New York or Halifax or Norfolk. We are in competition with Halifax and Norfolk to become the hub port. Now, we shouldn't be in competition. We have tremendous economic and geographic advantages. Ports like Singapore and Hong Kong are now spending billions of dollars in infrastructure investments in a speculative race to compete with each other to become the hub port for the southeast Asian trade. One of them will win, one of them won't. We don't have to worry about a speculative competition because our geographic advantages are so advantageous that if it weren't for the fact that we don't have the proper infrastructure because of the last 50 or 60 years of lack of proper investment, we would be clearly the winner and we can still clearly be the winner if we do the right investment. Our economic advantages are that we are at the center of the east coast megalopolis that stretches from Portsmouth, New Hampshire, to Richmond, Virginia. Norfolk is at the southern edge, Halifax way up in the outer fringes. Secondly, we have a huge local market, 30 million people, roughly. The local market for Norfolk is maybe a couple of million, the local market for Halifax is much less than that. Thirdly, with respect to Norfolk at least, we're a day and a half closer. Sailing time is $50,000 a day. Rising (inaudible) freighter closer to the major European ports and yet we are losing this race. The Port of New York and New Jersey has been losing market share for the last 25 or 30 years. We must regain that. We must become the hub port.
The Port Authority in 1995 did a study that said that if New York did not become the hub port we would lose, in the next 20 years, approximately 40 percent of our 180,000 port related jobs. The City of New York, EVCs port studies have said that if we become the hub port- they said several things - number one, the Port of New York and New Jersey as a whole is doing about 2.2 million TEUs, that's a measure of water borne commerce, that 2.2 million TEUs business a year. If we become the hub port -- well, whether or not we become the hub port, Atlantic seaboard trade is expected to increase to about 24 million TEUs coming into the eastern seaboard annually over the next 40 years, 24 million TEUs, and if we become the hub port we can expect to handle between 14 and 17 million TEUs a year compared to our current 2.2 million. To do that we will need every available inch of port space in Elizabeth, in Newark, in (inaudible) Staten Island, in Bayonne and in Brooklyn. So we're not in competition with New Jersey or anyplace else in the port. The port is in competition with Norfolk and with Halifax.
How do we get that competition? How do we become the hub port? What's been stopping us? What's been stopping us is two things. You've got to be able to handle the 50-foot ships. The ships have been getting deeper and deeper and deeper. The Port Authority has belatedly recognized this. I remember having an argument with someone who shall be nameless in The Port Authority in 1991 in which I said we've got to get 50-foot channels and not simply the 45-foot channels which were then envisioned, and I was told by The Port Authority person, no, no, no, the ships aren't getting any deeper and I said, come on, the ships have been getting deeper since Pharoh, they're not stopping now. The Port Authority sometime after 1996 finally recognized this and everybody now is talking about 50-foot channels. But 50-foot channels where? The Port of New York right now, the port facilities, are in Newark Bay on the other side of the Kill Van Kull behind Staten Island and Bayonne. To get to the Newark Bay (inaudible) to Port Newark, to Port Elizabeth, you have to sail through the Kill Van Kull, a narrow trek whose body of water is between Bayonne on the north and Staten Island on the south. You hit solid rock at 30 to 35 feet in the Kill Van Kull and in Newark Bay. We have just finished, at a cost of half a billion dollars, blasting that solid rock to 40 feet and now we're going to spend probably another one and a half to two billion dollars over the next 15 years blasting it first to 45 and then to 50 feet. And, by the way, New York Harbor, however, which is to say Bayonne and Brooklyn, you don't hit solid rock until you're down at 100 to 150 feet in the channel and 60 to 65 feet at the pyramid. You don't have to last solid rock. You do have to dredge to push the silt out of the way, but that's cheap and easy and quick compared to blasting the rock. People normally obfuscate this obvious difference or this obvious advantage for Brooklyn by talking about dredging. But by dredging, they mean two very different things; pushing silt out of the way which is, as I said, is easy and cheap and quick, and blasting through solid rock, which is difficult, time consuming and expensive. In Brooklyn and in Bayonne you don't have to do the blasting.
So the first thing that we should do is move part of the port, at least for the deeper ships, to the New York Bay as opposed to Newark Bay, which is to say to Brooklyn and Bayonne, and then we're don't have to worry about whether it takes 15 or 20 years to get the blasting to Newark Bay completed and we don't have to worry about Norfolk or Halifax supplanting us as the port because they get the 50 feet first and the shipping companies want that.
The second thing, for Brooklyn you can't have the port here, a major shipping port, without a rail freight tunnel because how do you get the stuff away from the port? You're not going to get major containerized shipping in Brooklyn if the container comes off the ship, gets loaded onto a container chassis, put behind a truck, the truck goes out the gate and gets stuck on the Gowanus Expressway. It's not going to happen nor would we want it to happen. We don't want hundreds of thousands of new trucks on the Gowanus Expressway. Even if we did, it wouldn't happen because that kind of immobility, once you get off the ship, is not conducive to good economics and the ships wouldn't come. The rail freight tunnel would enable a major port in Brooklyn as it would enable a lot of other things. And for that reason alone it will be justified even if it weren't justified regardless of the port, which it is. But the two preconditions for the port in Brooklyn are that we recognize the necessity of the 50-foot channel quickly and that we have the rail freight tunnel so that stuff can come in and out by rail, not just be truck.
Now, rail freight access to the City must be restored independent of the question of the port. Our exclusive reliance on trucking currently provides a very real economic obstacle to business. In the United States as a whole, 41 percent of intercity freight goes by rail, which is cheaper and environmentally cleaner than trucks, certainly environmentally cleaner, and at a distance of greater than about 260 miles, cheaper than truck freight. In New York City, Long Island, Westchester, Putnam and the entire State of Connecticut in this region, it's not 41 percent of freight that goes by rail, but it's 2.8 percent, less than three percent. For a number of reasons, one of which is that we're the only city, we're the only port city, that never built a rail freight tunnel or bridge over or under its port or harbor. If we cannot move goods in and out of Brooklyn and the City cheaply and efficiently, we cannot hope to reinvigorate the port and it will also be a major obstacle toward manufacturing economy.
Let me say a couple of things about the rail freight tunnel. We are the only major city in North America where everything comes in and goes out by truck, I mentioned that before. We also have the highest asthma rates in northern Manhattan, in South Bronx, in parts of Brooklyn, in the country directly related, among other reasons, to all of the diesel fumes coming from those trucks. They pollute our air, they congest our roads incredibly, they tear up our roads. One 70,000 pound truck does the same damage to a road or a highway as 10,000 automobiles. One truck does the same damage as 10,000 automobiles and imagine what that does to your highway and bridge repair budget. And everything we have comes in and goes out by truck, every piece of xerox paper, computer paper, every Xerox machine, every computer, every grapefruit comes in and goes out by truck and that's absurd Economically it increases the cost of every grapefruit you buy by a (inaudible) I don't mean in extra transportation cost and it makes the economy just much less efficient and probably deprives us of many, many jobs. And the rail freight tunnel has been proposed for many, many years. Now, why from Bay Ridge, by the way? The tunnel would go from Bay Ridge to either Staten Island or Bayonne. Why there? The Port Authority has proposed some less intelligent locations. Why Bay Ridge to Bayonne or Staten Island? Because Bay Ridge is the natural western terminus of the entire -- of Long Island, and Queens and Brooklyn railroad system and it's a natural southern terminus of the entire New England and east of Hudson New York railroad systems and it's not connected to the mainland. You can't cross by railroad freight, you can't cross the Hudson south of a bridge 140 miles north of here and a couple of miles south of Albany. If you go to Bayonne you're in the national railway network. If you go to Staten Island you cross along the old northern Staten Island Railroad line and there's a railroad bridge right next to the Goethal's Bridge into New Jersey and you also have the natural railway network. The Port Authority was set up in 1921 specifically to build that tunnel. Eugenis H. Outerbridge, the first chairman of The Port Authority, called the Brooklyn to Bayonne tunnel the "keystone in the arch of the master plan." Of course, nothing in the master plan was ever built. If you are curious, you can go to McKinney's, which is the collective laws of New York, those are your lawyers' notice, look at the unconsolidated laws, which is under U, unconsolidated, and look up Chapter 6100, and you will see there the master plan, which was enacted by the legislature of the two states in 1920. And the master plan divides into three sections. Section one, essential projects. None were ever built. Section two, other projects. None were ever built. Section three, miscellaneous authority to do other things. Unspecified. Everything The Port Authority has ever done has come under either that section or under subsequent legislation such as the legislation to build the World Trade Center or the Queens West and so forth. Nothing of the first two were ever done. I shouldn't say that. The State of New York built the O point connector in the 1980s and '90s at a State cost of 160 million dollars. That was part of the middle belt railway which is in section one of The Port Authority plan. The Port Authority had nothing to do with it. Oh, excuse me, The Port Authority did put a little money into it, about 37 million of the 160 million. It's arm was twisted by the governor or New York to do that.
The tunnel is essential to restore rail freight to New York, Long Island, to Westchester, to Connecticut and to enable us to have a container port here. Now, the City did a preliminary study of the tunnel back in 1996 and '97 and it was supposed to be a two-phase study after which, if the results were sufficiently optimistic, the City was going to go to the federal government and ask for permission, in effect, to do what's called a major investment study which is necessary as a prerequisite to getting federal funds. The City did that study, or at least phase one of the study, and the Highway (inaudible) Administration then came to the City and said the results are so good, don't waste your time with the second phase of the City study, go directly into the MIS. The federal government asked the City to do that, the City started a five-million-dollar MIS, which we got congressional funding for and that report should be ready for release in a couple of weeks. It's been in the works for about two and a half years. It should be ready for release in a couple of weeks. The mayor will release it whenever his governmental and political judgement dictates that it be most advantageous and that might be in two weeks or any time before November. I have no idea. In any event, we do know what that will say. Some of us have been briefed on it. The study says that a one track tunnel will cost one billion dollars to build. It also says that necessary improvements ancillary to the tunnel, such as raising the rail clearances on the Bay Ridge lines that double stack (inaudible) building some rail yards so there are places for the trains to get on and off -- for containers to get on and off the rail system would cost another half billion for a total cost of a billion and half dollars. The economic return to the City of New York annually, not the revenues, but the economic return to the economy, to the City only, not counting the economic return for Long Island, to Connecticut, to Westchester, but for the City alone, would be 900 million dollars annually on a one and a half billion dollar investment. It would take 1.6 million trucks a year off New York City streets. 1.6 million, which is about twice what we anticipated, immediately upon opening. It would remove that amount from the City streets without a port in Brooklyn. With a port in Brooklyn it would remove 2.2 million trucks from New York City streets. An investment well worth making for all these reasons.
Now, these four kits, 1.6 million trucks, 900 million dollars economic benefits are only from what's called modal diversion. Now, what's modal diversion? Diversion from one mode to another. In other words, looking at existing traffic, trucks going from New Jersey to Mineola or from New Jersey to Brooklyn, or from California to Brooklyn, or wherever, how many of those existing trucks would go off the roads and onto the rails if there were the rail freight tunnels and some rail yards? 1.6 million. Zero is assumed from, and the economics benefits, are all assumed simply from the direct savings in transportation costs and other derivative benefits from that for existing traffic, existing industry, existing economic activity.
What about induced economic activity? One of the things you always get from any kind of infrastructure investment to make sense is economic activity that wouldn't otherwise occur because transportation is much cheaper and more convenient. Well, it will be there, but the study made no attempt to quantify it because it's more difficult, because it's more speculative and simply looking at existing truck trips from existing economic activity and saying, well, which was diverted to rail, so all the figures we're dealing with do not include any increased traffic, any increased economic benefits from induced economic activity, although history tells us that there would be large benefits.
I'll give you an analogy so you see the difference of what I am talking about. In 1825 the Erie Canal opened. In 1820 New York City had two percent of the nation's maritime trade, about two percent of the population. The canal opened in 1925. By 1930 we had 38 percent. In five years it went to 38 percent of the nation's maritime trade from two percent. And, of course, much of this was then going through the Erie Canal to the midwest, which is why it all increased. That's the induced economic activity. The increase in the economic activity because the infrastructure investment, the Erie Canal.
The analog to the current study, which is modal diversion, would be if the ABC Consulting Corporation had been hired by Governor DeWitt Clinton, not Bill, but DeWitt Clinton, in 1814, and had stationed people in the forest midway between Utica and Rome, and had counted the number of wagons that passed by on their way from New York City to Buffalo and they would have said the modal diversion will be very minor because there were very few covered wagons going by because it's very uneconomical. In that case, the overwhelming benefits were induced economic development. Here we're only looking at the modal diversion, but we know the history that the induced economic development will be great in addition to what we can count from modal diversion.
In addition to the necessity for rail freight in Brooklyn and in New York, is the need to retool our transportation infrastructure generally. Roads that were designed decades ago are no longer adequate to move people and goods. With regard to the Gowanus Expressway, we must demand the State keep and open mind in reviewing the alternatives and especially the tunnel alternative to the collapsing roadway. All parties to the process should act in a swift, cooperative and efficient manner so that the transportation needs of the Brooklyn business community are adequately met.
Let me talk for a moment here about the question of the Verrazano Bridge and the one way tolls and be very practical about it. The one way toll on the Verrazano Bridge, which is mandated by federal law at this point, is extremely destructive. It costs us a lot of money and it's extremely destructive by increasing traffic in Brooklyn and in downtown Manhattan because trucks take a circuitous route, they come - I never remember if they come in or go out - they go one way through the Verrazano instead of going back out through the Verrazano they take a circuitous route through Brooklyn and lower Manhattan and out through the other tunnels so that they avoid tolls on everything, they pay no tolls. Ideally that legislation should be repealed and the Triborough Bridge and Tunnel Authority should then reverse that policy. As a very practical political man I have, of course, introduced legislation to do this, but let me tell you, it's a political matter, that legislation won't pass until one of two political conditions happens and I'm not here with my political hat on, I'm not advocating the following political developments, I'm simply saying this legislation won't pass until one of the two following conditions occurs: One, you have a democratic majority in the House of Representatives and two democratic senators from New York or, two, that's very practical, or two, you have a democratic majority in the House, one democratic senator from New York, but a democratic majority of the Senate as well. So if you have a democratic majority in both houses and one democratic senator, it will pass the legislation, or a democratic majority in the House and two democratic senators. Otherwise, it simply won't happen because Mr. Fosella will get his way.
Now, there is another alternative which I have been proposing which hasn't gotten a lot of support yet, but I think it's something that should be explored and that is, and hold your objections until I explain it beyond the first sentence, putting tolls on certain traffic on the East River bridges. Now, of course, Brooklyn has always objected to this, but I don't think Brooklyn will object if the tolls on the East River bridges were limited to 18-wheelers or tractor-trailers. In other words, not to cars for people who live in Brooklyn and Queens, but if you simply put a toll for heavy trucks, a toll equal or exceeding the toll they would pay on the Verrazano on the East River bridges, then they would have no cause to take that circuitous route and they probably wouldn't take the circuitous route, they wouldn't pay the tolls on the East River bridges, and as a practical matter that wouldn't matter, they would simply go back and forth across the Verrazano the way they used to and you can use modern EZ-Pass technology such as they're using in California and not the ones we're using here, which obsolete, the ones they're using in California now where you can go through the toll plaza at 40 miles an hour. With the EZ-Pass you don't even have to slow down.
The last thing I want to say is that we have to have some intelligent comprehensive transportation planning in New York, which we don't. Carolyn Konheim showed before a very interesting illustration in which she showed that the 4.3 billion dollar East Side Access Project, which is designed -- 4.3 billion is going ahead, Senator D'Amato was in favor of it, the government is still in favor of it, other are too, because it will save 110,000 Long Island commuters 30 minutes a day commuting. But a three-million dollar F Train improvement, which will save 110,000 people in Brooklyn 40 minutes commuting, that wasn't on the table for various political reasons. The important thing is NEMTIC is that 4.3 billion dollar investment in the East Side Access Project - and the East Side Access Project, by the way, is a better justification than saving the commuters some time, but that's a different story - but is that 4.3 billion dollar investment in that project the best use of that money? And the answer is probably not. I could name, off the top of my head, I won't, but I could, over 40 billions dollars worth of major capital investment projects being proposed for transportation into and around New York City beyond what's in the capital plan of the MTA. All of which projects have some justification, all of which have some merits, all of which have some political support, all of which won't be built. We're not going to spend that 40 billion dollars. We may spend 25 or 15 but we're not going to spend forty. Whether we make intelligent distinctions and intelligent comparisons and intelligent prioritization among those 40 billion dollars worth of proposed project instead of building those which happen to come along first or happen to have more political support at the moment, will very much determine the quality of life in this region and the economics of this region. Right now, NEMTIC, which is our major metropolitan planning organization, simply lists every project that has advanced, doesn't prioritize. We have to have a mechanism in this region for prioritizing transportation decisions so you can compare and say would 4.3 billion dollars be best spent on the East Side Access Program or is a better use building three rail freight tunnels or half of a new Second Avenue subway or whatever, and you have to have a mechanism for making those prioritizations if we're going to have them improve quality of life and economics in New York City and in Brooklyn.
Thank you very much.
MR. WOLLMAN: We now know, between Robert Yaro and Jerrold Nadler and Carolyn Konheim, as much as anyone needs to know, maybe, about the role of transportation in the future of Brooklyn.
To close the session I am grateful to two persons to talk to us, in a somewhat speculative way, about future issues in Brooklyn and where Brooklyn can go. We're particularly happy this morning, having begun with the Borough President's office, to come to a close with the office of the City Planning Commission and it's Brooklyn head, Regina Myer.
Regina Myer is the Director of the Brooklyn Office for the Department of City Planning. She previously served as a Senior Planner in the Department's Manhattan Office and as Deputy Direction of its Transportation Planning Division and between children and directing the future of Brooklyn, we are grateful to her for having spent this time with us this morning.
MS. MYER: Thank you and almost good afternoon.
I don't know, scheduling the Department of City Planning, of course, as a wrap-up is an interesting finale. I, of course, am here to present a day in the life of the current planning in Brooklyn and some of the challenges that lie ahead for the borough.
As we've heard throughout the morning, Brooklyn has undergone a phenomenal transformation over the past decade. That's symbolized, I think, by Downtown Brooklyn's resurgence with the development of MetroTech and (inaudible) Plaza, including the Marriott Hotel. We now have approvals ready for the consolidation of the court system at 330 Jay Street, which was granted by the Commission last summer, which reinforce, again, Downtown Brooklyn's center as the borough's economic and civic center. In a few weeks, of course, there will be a whole morning session devoted to Downtown Brooklyn, of course, Joseph Rose, by boss, will be presenting the overview. I'm sure you'll be hearing a lot more about the department's activities in Downtown Brooklyn at that time. And as many of you know, because I've been out on the road for the past few months on the Unified Bulk Program, which is the department's major zoning overhaul which is scheduled to be heard at the City Planning Commission for the first hearing tomorrow, I've been talking to a lot of groups about Brooklyn's neighborhoods and, of course, I'll put in my pitch for Unified Bulk at the end of this discussion.
Today, again, those strengths and challenges for Brooklyn. First, I'd like to step back and talk about the focus and strength of Brooklyn's residents. With 2.3 to 2.5 million people, it has the largest population of all the boroughs and has, interestingly, maintained this population stability with the high, high degree of immigration. Brooklyn leads in immigration throughout the City with 36 percent of new immigrants to the City. That includes 280,000 people in the years between 1990 and 1996. These are our most current numbers. New persons in Brooklyn arrive from all parts of the world; China, the former Soviet Union, the Dominican Republic, Jamaica and many other Caribbean nations and this is a very, very important facet of the borough as we continue to maintain strength in the region.
We relate the population analysis to the borough's housing stock. The department has found that our long-standing middle income neighborhoods, I'm talking Flatbush, Bensonhurst, East Flatbush, Sheepshead Bay, Brighton Beach, Coney Island, have provided an accessible amount of rental units for this population and we can, therefore, conclude that the stability of major parts of the borough are due to is attractiveness to the various immigrant populations. Commensurately, we are also in the midst, and many of you are aware of this, in the rebirth of many of the other neighborhoods. Brownstone Brooklyn at this time is probably one of the most attractive neighborhoods in all of the City. There's real estate article upon real estate article about the resurgence of those neighborhoods, Park Slope, Carroll Gardens, Cobble Hill. In totality, Brooklyn's neighborhoods and populations have provided a stable workforce and consumer population for the entire City which, as we've seen a number of times this morning, are linked very, very well to Manhattan and to the rest of the City by our preeminent mass transit system.
Finally, national retailers have discovered this wonderful, stable population and the tremendous buying power of Brooklyn's residents and have located some of their stores in the borough, most notably, and many of my colleagues from various agencies are here, Atlantic Center has opened, to a tremendous success, at the corner of Atlantic and Flatbush, providing not only regional attention to retail, but important services to the immediate Fort Greene neighborhood. Also, there is Costco in Sunset Park, Home Depot just north on Hamilton Avenue, and a number of new movie theaters. New retail is also planned at Cropsy Avenue by Home Depot, this is the stretch of Cropsy Avenue leading south to Coney Island. There will be expansion at Atlantic Center and also expansion throughout our neighborhoods through initiatives HPD is taking to provide retail space.
On the housing front, I'm here to report things are not as rosy. Nearly 8500 units have been constructed in Brooklyn since 1994. With the rate of about a thousand to housing 1500 a year in the past few years the majority of these units were constructed as a result of public initiatives, including thousands of Niermeyer (phonetic) homes concentrated mainly in East New York, partnership homes providing fabulous rebirth of Saratoga Square and many other neighborhoods throughout the City. The Partnership Program has made a tremendous difference throughout our borough in providing in-fill and important resourceable affordable housing. These projects have stabilized these neighborhoods and reestablished them after they've experienced significant decline.
Private initiatives, unfortunately, are not as great in number, though there are a few great projects to point to and you'll be hearing from them in the next several sessions. Highlights include, of course, the Brighton Beach Project which is finally under construction. I was out there last week, I'm pleased to say that several hundred units will be finished by the end of this year. I'm sure Josh Muss will be talking about them a great deal. This provides truly a vision for a new housing market rate construction in the borough. Other housing projects, of course David Walentas' 200 market rate units on the waterfront have provided an important facet of Downtown Brooklyn. It has evolved the vision from Fulton Ferry, we think, over from the Eagle Warehouse to the DUMBO area. It's provided a great mixed-use of community that the department is pleased that the mixed-use text has established an important place in Brooklyn. Also there is an apartment house under construction across from my office or down the block. Ichner is building, I believe, a market rate apartment house on Montague Street with also a very, very high profile location.
We have seen in-fill apartment construction throughout the borough; in Bay Ridge, in Cobble Hill, in Fort Greene. We have seen other loft conversions, but we really do need to see more interest in market rate construction. In terms of rounding out the administration's perspective on Brooklyn, I do need to add, of course somebody should, the Coney Island Stadium was approved last week by the City Council and that will provide not only a place for minor league ball in Coney Island, but also improvements to the boardwalk, the beaches and to retail along Surf Avenue.
So what are the challenges here? Downtown Brooklyn needs to be supported and strengthened after the tremendous success of MetroTech. We need to continue efforts such as the Marriott Hotel expansion, which the mayor has announced, and marketing to technology based companies need to continue to be supported to permit downtown to compete in the region. As the Borough President mentioned earlier today, the Livingston Street corridor and other underutilized areas of the Fulton Mall need to be relooked at to make Downtown Brooklyn and even more exciting 24 by seven activity center for the borough. And also, I should add, we will be glad to fill you in on more of those details at the third session.
Since the borough has lagged in the production of private market rate housing compared to the other boroughs, we need to work to create new market rate housing opportunities in the borough. The department's proposal for rezoning in the Court Street area will increase residential development potential by equalizing residential floor areas with existing commercial floor areas and this is a neighborhood, an area, excuse me, of Court Street that really can make a nice transition between Downtown Brooklyn and Cobble Hill.
We're also beginning to focus our attention on market rate housing in a number of manufacturing neighborhoods that have shown a phenomenal amount of underutilized land. The best example is the DUMBO mixed-use rezoning. Also, the department initiated the rezoning in Vinegar Hill which was miszoned many years ago to manufacturing to reconfirm the residential community there. In these successful zoning efforts, the department identified manufacturing land adjacent to residential areas that have high concentrations of vacant land or existing residential uses already and very, very few jobs. Other neighborhoods where this has been successful, it's in areas of Williamsburg, we think that this will be a very, very tight neighborhood approach needs to be looked at as we see the continuing evolution of areas like north side Williamsburg, Greenpoint and Red Hook.
Finally, in terms of employment, and this has been in discussion throughout the morning, it is true the borough has only realized a modest increase in employment over the last economic boom, it's about 3.5 percent and this has been in the period of, as you know, significant citywide expansion. When we look at the borough numbers in comparison to the expansion of jobs in both Queens and Staten Island, what we've found is that those boroughs have grown due to retail expansion and the large amount of jobs that retail can provide for our neighborhoods. We must continue to support new retail initiatives, inappropriate locations which can provide these jobs. Some of these jobs we look forward to -- excuse me, some of the projects we look forward to are the movie theater site in the Gowanus area, the Fairway in Red Hook and Pathmark in Broadway Triangle in Williamsburg.
So to wrap up, I think we made tremendous, tremendous strides, but there still is yet more to be done throughout our City, throughout the borough.
And just as a plug for the Unified Bulk Program, Unified Bulk Program, as many of you know, is an inarticulated new vision for the zoning resolution in terms of bulk controls. In 1961 the zoning resolution articulated a vision which promoted tower in the park development even in neighborhoods zoned R6, which is a mid-density zoning district, you could only achieve that floor area ratio by building tall buildings, say, in the fifteen-story range. What the Unified Bulk Program does and what we're in land use review now, and, of course, putting everyone's support on, is establishing, we think, a new vision and that vision is best articulated by height limits in the middle density district which is the most relevant to Brooklyn, the R6 district would have a ninety-foot height limit. And I think what's really very important about the new vision is it responds to the very, very important neighborhood quality that we know and recognize as the borough's quality and that Unified Bulk would promote a very street friendly and important quality of life for the borough's residents.
So that's my pitch. Thank you very much.
MR. WOLLMAN: Thank you, Regina.
I'm sorry we're late. Representative Nadler said he took this opportunity in this audience to present what he though was a major policy address for him, not recognizing the limits of our --
Let me close the morning session for day one of the Roundtable by welcoming Hugh Kelly, a man serving with equal distinction the private and public sectors in terms of his consulting practice, as Chief Economist for Landauer Realty Group. His assignments have included such clients as The Port Authority, of which we now know a little bit more I think today as to what they're up to, including the two sections of 1920 legislation that they have never turned to, as well as major financial institutions, developers and real estate companies, the editor and principal authority of the Landauer Real Estate Market Forecast since 1985, which for the real estate industry is an indispensable national reference. Mr. Kelly also serves as editor-in-chief of the SIOR/Landauer Investment Trends Quarterly and The Counselor, the bi-monthly publication of the Counselors of Real Estate. He serves on the Board of Ecomonic Advisors for the regional Forecast of The Port Authority of New York and New Jersey.
Please welcome Hugh Kelly.
MR. KELLY: Thank you.
I haven't felt so much pressure since about a month ago when I was the last speaker at a conference in Hawaii and everybody was looking to go out to the beach. And the pressure was added to because, speaking on a subject of twenty-four-hour cities which had been much discussed but never before quantified, I was going to challenge the audience to think numerically, which I'm not going to ask you to do, and thirdly, because my wife is in the audience, and I know all of you will be fairly polite at the end of the speech, but she was going to tell me the truth about how good I was. So I feel some challeng today, but not as much as on that occasion.
I'd like to start by going back to an important literally eclipse at Brooklyn. Thomas Wolfe, not Tom Wolfe, Thomas Wolfe wrote a marvelous short story Only the Dead Know Brooklyn. The opening paragraph reads: "Only the dead could know Brooklyn, because it would take a guy a lifetime to know the town true and true and then you wouldn't know everything about the effin place." I think that's really true. I've lived in Brooklyn all my life. I grew up across the street from Kings County Hospital, I went to high school on the corner of Washington and Atlantic Avenues, I sold ice cream on Manhattan Beach in the summer, took tolls on the Marine Parkway Bridge when the toll was a dime, worked in the churches in Bed-Stuy, in Crown Heights, and Brownsville, taught high school in East Flatbush, raised a family in Kensington, married a girl from Bay Ridge, I've run in Prospect Park and Ocean Parkway and on the boardwalk in Coney Island. So if anyone has a chance to kind of respond to what you've heard today, I feel pretty qualified to do that. In addition, my professional jobs at Landauer have caused me from time to time to look into the borough. We were really pleased to be one of the people that helped conceptualize the Niermeyer plan to begin with and I think there's some relevance in some of the things we learned, not the least of which is the importance of that Bay Ridge Line which traverses the neighborhoods where the Niermeyer project has been built. So I thought I'd structure my remarks today, to kind of wear my more professional hat as the chief economist of the Landauer and as a consultant and try and put that over my experiential knowledge of the borough.
Back in the early '90s we advised a major international investor called Lendlease, which wound up buying Equitable Real Estate Management, about a two and a half million-dollar acquisition, and the assignment that they gave was us to look at the major metropolitan areas in the United States and Mexico and Canada. We looked at about 125 cities and tried to identify what they called the cities of tomorrow. Those that would move up the economic hierarchy over the course of a twenty-year period of time and to identify why that might occur. And our research caused us to look at eight variables and in 20 minutes or 15 minutes, I've got two minutes per variable, so I'm going to do this real fast.
First, what were the variables? Those cities that were going to succeed over this period, and we're now halfway through the period that we projected for that study, were magnet cities that would attract population, cities with a large skilled and affordable labor force, cities that have a global connection to the world economy which is becoming increasingly globalized, cities which have an advantage in the emergent technologies. Five cities whose economic structure provided stability in a world of increasing volatility. Sixth, cities that have desirable characteristics in terms of their local infrastructure. Seven, cities which have been civic cohesion. And, eight, cities that have desirable quality of life. And let me just quickly deal with the last first.
Poverty is bad for quality of life. Unemployment is bad for quality of life and those things that we've heard discussed today that are either directly or indirectly approaching those variables I think are really critical for us. But they have to do with all the other issues. They have to do with labor, they have to do with infrastructure, they have to do with immigration, they have to do with technology. So, quickly, Brooklyn, if we were to scale it in that study, would get very, very high marks as a magnet city. We've heard a lot about immigration, heard a lot about the borough being a receptor of people from all over the world. That is its plus. Its negative, however, is that it is continually subject to out-migration of its local population and here's where our study from Niermeyer I think becomes very critical because we were studying then in the early '80s sections of Brooklyn, Brownsville and East New York in particular, which had been subject to the greatest depopulation, inclusive of South Bronx, in any of the areas in the City of New York, and yet we were able to find one characteristic that within those neighborhoods of Brownsville and East New York which were so greatly devastated by the economic downturn of the 1970s, pockets of strength, pockets of stability, and those were the pockets in which small single family housing neighborhoods, blocks at a time, were able to cohere. The depopulation occurred largely in the areas where rental populations were highly mobile and where destruction of the neighborhoods were most advanced. And so I think part of our stabilization to populate in order to get the maximum benefit is to allow and to encourage these immigrant populations that are coming into the State to make the conversion from where they are now in affordable renting housing and not need to migrate out of the City in order to find affordable single family units. And Niermeyer solves some of that problem, I think offers a very good model for minimal subsidy, I mean basically a subsidy Niermeyer was some capital improvements to the land and then very conventional financing which allows people who work as subway conductors, and school aides, and nurses' aides in the hospitals have real equity in their houses and enjoy the real fruit of equity appreciation just like all of us do.
In terms of labor force, Rosemary Scanlon of The Port Authority, was the first person that I heard back in the early '80s warned that we were approaching a period of labor shortage in the United States and that period is now upon us. Brooklyn of course has the perverse advantage of having some labor surplus, that's what the unemployment rate is all about. But it's a labor force whose skill base is not particularly well-matched to what the existing job opportunities are and the idea that we can, again, address the need for job creation for semiskilled labor in the New York area I think is most healthy. Representative Nadler's concept that we should not give up and just watch manufacturing go to the vanishing point, I think is very instructive. One of the assignments that I had the privilege of working on in the '80s was helping the General Motors Corporation find the site for the Saturn automobile plant. And you know in the mid-'80s the conventional wisdom was that the U.S. had just already lost the world race to be able to build automobiles. We couldn't build cars of sufficient quality and price to compete on the world market and we needed to turn over that as a sunset industry and Detroit and (inaudible) in that whole middle west was the rust belt. But didn't give up on that. We invested in it. I think a similar kind of approach is important. There is tremendous interest and desire and willingness to work in these kinds of blue collar jobs. I see that within blocks of my house every day. I live near the corner of Church Avenue and MacDonald Avenue. There is a shape-up that occurs every morning on that corner of restaurant and construction workers who stand on the corner waiting for vans to come by and solicit them for work. Not a half-mile away there's another shape-up for similar kinds of work at the corner of Fort Hamilton Parkway and 37th Street and this attracts literally hundreds of people to these street corners (inaudible) are not plugged into the economy and I think a focus on manufacturing jobs would help, but the key for that is clearly to advance the skill level because even manufacturing jobs are becoming more and more highly skilled around the country. Warehousing is one of the most technologically advanced industries in the country right now. Transponders, bar codes, and everything else. This is not a dead-end kind of industry to be involved in by any means and so the schools, education, vocational, technical education, are important.
It's the global connection I think that is really the critical thing to me in the several comments we've had about the improvement of the harbor because that is one of our windows on the world and this is an increasingly globalized economy and our competition is really worldwide and the ability to take a look at that harbor project brings benefits not just to the waterfront communities of Brooklyn, but, as we've seen, works in a linkage fashion for the entire borough. Bay Ridge Line does indeed go through parts of Borough Park into Midwood into Brownsville and East New York. And interestingly, links up with some of the Transit Authority's facilities along Linden Boulevard and then out in the Fresh Ponds area. We invested a tremendous amount in our transportation infrastructure, in mass transit and linking that to our waterfront I think gives us several advantages, not the least of which is a reminder that if merging technologies are not necessarily high technology, that information technology alone, the dot com industry, is only a small slice of what technology is all about. Transportation technology is very, very fast advancing and we invest already billions of dollars in it and the budgets that we've seen here are encouraging us to invest billions of dollars more.
Where are we using that investment? Not to flow dollars outside of the City to the (inaudible) and to the developers of rail cars and indeed the rail system itself, but to encourage the teaching of that technology and the use of New York City's workforce in building it ourselves. I think that a major challenge for us. In central Brooklyn also there are tremendous facilities in terms of medical technology. The Downstate University at SUNY across the street from Kings County Hospital is a major teaching hospital. Hospitals throughout the borough are major employers, Long Island College Hospital, Brookdale Hospital, Coney Island Hospital, Woodhull Hospital and are ties to the biotechnical industry and to pharmaceuticals are important to us as potential employment, but also linking us into a more diversified approach to technology. I think that's very, very important because as we look at our economic structure, I think I'm going to have to concur, and concur strongly with Representative Nadler's comment that the story of the past 30 years has been a narrowing of the economic base of New York City. We have a diverse population, but an undiversified economy and our challenge is to rediversify our economy and I think that that is one of our cushions against economic downtown because this is and remains a cyclical economy.
This speech that I gave in Hawaii, as I said, for the first time put some quantitative measures to a claim, and the claim was that institutional investors should invest in twenty-four-hour cities. Why? Because they produce better long-term results and the data did suggest that it is true that over the long haul, I mean out of about 22 years of data to look at, that the net return, the total return to investors in 24-hour cities is higher than those in nine-to-five cities, but, and here's where New York is so important, but in downturns, the volatility is so high that the risk of loss is substantially greater as well. Think of how much value gets lost in New York real estate when we go into the tank. Prices in Manhattan office buildings, for example, can drop from about $350 a square foot to about $100 a square foot. Multiply that by four hundred million square feet in New York and you get a sense of the institutional investment risk in New York City. If we can smooth out our cycles, that makes this a better place to invest all long-term, but that relies on economic diversification.
Certainly infrastructure is very, very critical for us. I've spoken a little bit about the need to leverage our buying power as we invest in infrastructure. I think that's very important. I think important when we need to think about civic cohesion. Civic cohesion internally so that projects don't take decades to do. That is one of the things that makes it so very, very hard to attract investment dollars into anywhere in New York City. David Walentas has -- how long have you been at this?
MR. WALENTAS: 20 years.
MR. KELLY: For a long time. Think of Battery Park City, look at this, Battery Park City's master plan was written in the 1960s. It's not finished yet. Not finished yet. This is ninety acres adjacent to the financial capital of the world and it's not finished yet. It's pretty spectacular to think about it. Part of that is because of the lack of civic cohesion internally, but part of it is because of the difficulty that we have in thinking regionally. What's good for Brooklyn in this instance, actually it turns out to be good for Long Island, in terms that, as Representative Nadler told us, to be good for New Jersey as well. It's not as though we're in a beggar-thy-neighbor situation where it's win versus lose. Our challenge is to think strategically and to make allies of one another. It might be a hard thing for New Yorkers to do. Might be hard, but it's really our challenge.
As I was thinking about this conference, I was reminded of the cover of, and it was a special edition of New York Magazine, and it was called Brooklyn, The Sane Alternative. That issue came out in 1969. It remains now as sane as it ever was. But the '70s were not a kind decade for us. That issue came out when New York City was reaching it all-time employment peak. That's what 1969 represents. And now as we move ourselves back forward we're in a position where we have the ability to think big thoughts and we have the ability to do major planning. Let's use this opportunity in a better way than we were able to do 30 years ago. I think, if so, all of our futures are much brighter.
Thanks very much.
MR. WOLLMAN: I'd like to thank all of you, especially those of you who've stayed this long. We've talked about the region today and regional issues confronting, facing and outing as opportunities for Brooklyn. In two weeks we'll focus very much on the neighborhoods on the residential issues.
It would not have been possible to accomplish today without the work of Ellen Posner, the Conference administrator who's sitting here, and I'd like to thank her publicly for everything that she has done to make an extraordinary morning.
Thank you all. ??
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