New York City officials have hammered out a plan to end a decades-old zoning regulation that protects manufacturing space in Manhattan’s historic Garment District and replaces it with programs designed to keep some of the industry in Midtown.
The plan, which is expected to be announced within days, would achieve a major goal of the real-estate industry, which has long sought to end the zoning. Landlords have argued it preserves more space than declining garment-production businesses can fill.
Advocates of New York City’s fashion industry, who have battled to maintain the zoning, expressed support for much of the proposal, which was circulating behind the scenes last week. These proponents have argued that a vibrant Midtown presence remains critical to the local industry, which relies on a network of services that offer speed and efficiency. Advocates also recognize that foreign competition and other forces have caused the industry to hemorrhage tens of thousands of jobs, and they have been open to replacing the zoning with other programs.
The plan worked out by City Hall, elected officials and advocates on both sides of the issue would lift a 1987 mandate to preserve millions of square feet of apparel-production space on certain side streets in the Garment District, which is bounded roughly by West 40th and West 35th streets and Broadway and Ninth Avenue. If approved by the city council, the proposal would allow property owners to convert buildings to other uses, such as office space.
The plan would preserve a garment-industry presence in Midtown partly by using up to $20 million in city funds to acquire a building dedicated to manufacturers. The plan also includes a tax abatement for Garment District landlords who set aside at least 25,000 square feet in their buildings for manufacturers.
“I don’t view this as a win for the real-estate industry,” said James Patchett, chief executive of the New York City Economic Development Corporation. “It was a win for the garment industry because we have been watching for…the last few decades the decline of the garment industry in New York.”
The administration of Mayor Bill de Blasio, a Democrat, last spring first proposed eliminating the special zoning, but that triggered fierce opposition from fashion-industry advocates who felt it didn’t include enough to preserve a portion of the industry in Midtown.
The latest plan incorporates recommendations from a committee of the Garment District’s various stakeholders including Council of Fashion Designers of America and Garment District Alliance. Representatives of the garment industry who served on that committee say the proposal is more palatable than the earlier plan, which sought to lift the preservation regulations and help businesses relocate to other emerging hubs.
“The Garment Center’s unique ecosystem of skilled workers and specialty suppliers clustered in one place is the foundation that the wider New York fashion world is built on,” said Manhattan Borough President Gale Brewer who helped form and lead the steering committee with City Council Speaker Corey Johnson. “What we’ve negotiated here is a real plan to preserve it for years to come.”
In the Garment District’s heyday, from the 1920s to the 1950s, it was one of the city’s largest employers, with hundreds of thousands of clothing manufacturing jobs. But rising rents and global competition started to take its toll as manufacturers moved jobs overseas. In 1950, apparel-manufacturing jobs in the city numbered 334,182, according to the Garment District Alliance, a group that represents both landlords and businesses. By 1990, the number had dropped to 93,986, the Alliance said. And in April, the city’s apparel manufacturing fell to 11,900, a 7% drop from the prior year, according to the state Labor Department.
About 9 million square feet fall within the boundaries of the 1987 zoning regulation, according to the Alliance. But many landlords are leasing space for uses that don’t comply with those rules. Estimates of the amount of space used for garment production in the zoned area range from 700,000 square feet to 900,000 square feet, according to the Alliance and fashion-industry advocates.
“This plan provides needed investments in the fashion-manufacturing sector, while at the same time removing antiquated zoning restrictions that have simply failed to stop the exodus of jobs overseas,” said Barbara Blair, president of the Alliance, which counts many property owners among its members.
Indeed, even some Garment District proponents have given up space there, pressured by rising real-estate costs. For example, Nanette Lepore, the owner of her eponymous brand, is moving a large part of her operation from the Garment District to about 5,000 square feet of built-out space in the Brooklyn Navy Yard. She will maintain about 1,100 square feet in the Garment District, where her firm produces about 80% of its product, she said.
“It wasn’t just the cost that got me to the Navy Yards,” Ms. Lepore said. “We’re working in a place with paper makers, artists, jewelry makers and all the food people on the main floor.”
The city plan has a two-pronged approach for manufacturers seeking to stay in the Garment District. Landlords taking advantage of the tax-abatement part would have to lease space for a minimum of 15 years at rents, including expenses such as taxes, capped at $35 a square foot.
Officials with the Economic Development Corporation said they have gained commitments from three owners for space in four buildings, totaling 300,000 square feet.
The other major part of the proposal is the city’s commitment to buy a Garment Center Building with a nonprofit developer, who would operate and manage the property as dedicated production space. TThe city said it would issue a request for proposals for the building acquisition in the fall.Some proponents of preserving the District said they are concerned that the city’s efforts to acquire permanent space won’t immediately begin. Meanwhile,he city will launch the public-review process to lift restrictions on June 11, giving advocates limited time to get their constituents up to speed.
“We did want to preserve the manufacturing in what is the center now but be realistic that the growth is outside the district,” Deputy Mayor Alicia Glen said.
“The most important part for manufacturers—the building acquisition—isn’t ready to release,” said Gabrielle Ferrara, a board member with the Garment Center Supplier Association. She added, “Manufacturers would like to acquire a permanent space so they can directly control their future.”
Google and Mastercard are secretly tracking your offline purchases
Google has quietly been providing select advertisers a “stockpile” of offline credit card transaction data.
After a four year negotiation, Google and Mastercard reached a deal that would pay the latter millions in exchange for coughing up data on its card holders, according to a Bloomberg report. Google then packaged the data into a new tool, called Store Sales Measurement, that allowed its customers to track whether online ads turned into real world retail sales.
Neither company informed its users of the arrangement. For Mastercard, that means the bulk of its two billion customers have no knowledge of the behind-the-scenes tracking.
“People don’t expect what they buy physically in a store to be linked to what they are buying online,” Christine Bannan, counsel with the advocacy group Electronic Privacy Information Center, told Bloomberg. “There’s just far too much burden that companies place on consumers and not enough responsibility being taken by companies to inform users what they’re doing and what rights they have.”
Last year, when Google first announced the Store Sales Measurement service, the company claimed to have access to “approximately 70 percent” of US credit and debit cards. Purchases made on Mastercard-branded cards account for some 25 percent of all credit card transactions in the US, according to financial research firm Nilson Report.
Though Google didn’t name its partners, the 70 percent figure would suggest Mastercard isn’t the only credit card company it is currently partnered with.
Visa and American Express did not respond to our inquiries about whether they also had similar arrangements with Google.
A Google spokesperson told TNW:
Before we launched this beta product last year, we built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information. We do not have access to any personal information from our partners’ credit and debit cards, nor do we share any personal information with our partners. Google users can opt-out with their Web and App Activity controls, at any time.
While users have the ability to opt out of offline tracking, it remains unclear whether most users even know it exists. The opt out tool Google mentions makes no mention of tracking offline purchases.
For Google, this is just another step in bridging the gap between online ads and offline sales. Since at least 2014, the company has used Google Maps to notify advertisers about users who viewed their ads and then visited brick-and-mortar establishments. This tool, however, didn’t track sales made within the stores.
Mastercard couldn’t be reached for comment. A spokesperson, however, told Slate:
Regarding the [Bloomberg] article you cited, I’d quickly note that the premise of what was reported is false. The way our network operates, we do not know the individual items that a consumer purchases in any shopping card — physical or digital. No individual transactions or personal data is provided. That delivers on the expectation of privacy from both consumers and merchants around he world. In processing a transaction, we see the retailers name and the total amount of the consumer’s purchase, but not specific items.
THIS WEEK IN THE FUTURE OF CARS: HONEY WE BROKE THE FUTURE
IF ANY ONE thing launched Tesla’s meteoric rise from a small Silicon Valley startup to one of the world’s most famous and exciting companies, it’s Elon Musk. Every scrap of news about the company now makes headlines, as its outspoken, tweeting CEO struggles to turn a profit. But, whew, even by his standards, this week was a biggie for Musk … again. After a questionable announcement via Twitter that he’s considering taking Tesla private, the Securities and Exchange Commission is reportedly investigating him. Investors have filed four lawsuits, so far. Rapper Azealia Banks is somehow involved, and furious.
None of that, though, stopped Musk’s Boring Company from announcing plans to build a tunnel to LA’s Dodger Stadium. And amid the noise, Google sister company Sidewalk Labs revealed more details about its scheme for building the city of the future, starting with Toronto. It was a doozy of a week, and not just for Elon. Let’s get you caught up.
WSJ: Cohen Under Investigation For Tax Fraud In New York
Federal prosecutors in New York are homing in on possible tax fraud as part of their criminal investigation into the financial dealings of former Trump fixer Michael Cohen, the Wall Street Journal reported Tuesday.
A person familiar with the probe told the Journal that the possible fraud violations center on whether Cohen underreported the income he earned from his taxi medallion business on federal tax returns. Those funds amounted to hundreds of thousands of dollars Cohen received in cash.
Prosecutors from the Manhattan U.S. attorney’s office are also investigating whether employees at New York’s Sterling National Bank allowed Cohen to take out loans for that business without providing appropriate documentation, according to the report.
Cohen is under investigation for a host of financial crimes, including campaign finance violations and bank fraud. The former Trump Organization executive has signaled his willingness to cooperate with prosecutors and turn over information damaging to the president.
As TPM has reported, the once-lucrative taxi medallion business was a significant revenue stream for the Cohen family during the 2000s and 2010s. New York taxi moguls Simon Garber and Gene Freidman paid Cohen and his wife a monthly rate for managing the medallions the couple owned. The price of medallions plummeted in recent years thanks to the rise of ride-sharing apps like Lyft and Uber.
The Journal reported that federal prosecutors have subpoenaed Cohen’s former accountant, Jeffrey A. Getzel, who also served as an accountant for Freidman. Freidman earlier this year agreed to cooperate with federal prosecutors as needed as part of a lenient plea deal. The former “Taxi King” of New York pleaded guilty to one count of criminal tax evasion after an investigation into his own taxi businesses.
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