Opinion

Banning self-storage facilities won't bring manufacturing back to New York City

By Ari Goldman |  

April 24, 2017 |  

(Shutterstock)

Self-storage provides many benefits to New Yorkers. For businesses, including small construction firms and manufacturers that cannot afford a multi-year lease on a traditional warehouse, self-storage is a flexible, affordable and easily accessible option. For artists, it’s a way to keep their creativity in the five boroughs. For working- and middle-class New Yorkers living in cramped apartments without access to basements, attics, garages or country homes, it’s a downright necessity.

A current City Planning proposal would require an intentionally impossible 2-year special permit process for new self-storage facilities proposed for Industrial Business Zones – manufacturing areas that comprise the majority of buildable sites. This arbitrary, de facto ban – which would still permit warehouses, office towers, truck depots, hotels, nightclubs and other non-manufacturing uses – emanates from a theory that New York has been hemorrhaging manufacturing jobs because non-manufacturing uses have more capital to purchase land. If only we could tip the scales and prevent all those other uses from bidding on sites, manufacturers would swarm the city.

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We have not seen one shred of evidence that banning self-storage would bring manufacturing jobs back to New York City. The fact is, self-storage takes up less than two percent of the square footage in all 21 Industrial Business Zones throughout Brooklyn, Queens, the Bronx and Staten Island. New York City is the most underserved region in the United States when it comes to self-storage, according to the national real estate brokerage firm CBRE.

While this proposal will not bring manufacturing back, it will clear the way for other non-manufacturing uses. It will increase the number of dilapidated and vacant sites in our communities by blocking self-storage facilities from bidding on them. And it will result in New Yorkers paying higher prices for existing self-storage because supply will be squeezed while growing demand will be unmet.

Anyone who has been tracking the demise of manufacturing in New York City knows that the reason manufacturers are leaving town has everything to do with shifting business models, the high cost of labor, high taxes and a myriad of other reasons that have nothing at all to do with self-storage.

I have worked in self-storage development for 10 years, currently employing 20 people on Eastchester Road in the Bronx. In that time, we have never competed against manufacturers.

I have worked in self-storage development for 10 years, currently employing 20 people on Eastchester Road in the Bronx. In that time, we have never competed against manufacturers. We remediate toxic and dilapidated sites in industrial areas that have been used as tow pounds, adult entertainment nightclubs and auto-wrecking lots, and put them to good use. Most of our customers live or work in surrounding neighborhoods because our customers – especially our business customers – often access their units daily and weekly.

The data shows that self-storage adds tremendous value to existing businesses. That is why both the Queens and Brooklyn Chambers of Commerce adamantly oppose the proposal for a self-storage permitting process. It is also why nonprofits, artists, individual businesses and a growing number of working class New Yorkers are speaking out against this effort to compound the difficulty of running a business or raising a family in a space-constrained city – with a population expected to swell to 9 million by 2040.

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Nearly 30 percent of self-storage customers are businesses, with 47 percent owned by women or minorities, according a recent survey. One of these customers, a manufacturer with more than 100 employees that has produced circuit boards and electrical parts out of the Brooklyn Army Terminal for 70 years, urged the city not to pursue its proposal – stating that manufacturing firms “face many challenges” and that “limiting self storage will not address those issues.” The company “found self-storage to be a cost-effective and efficient solution to our space constraints.”

We hope the city succeeds in bringing manufacturing firms like these back to our city – they are our customers. However, the current proposal is a blunt and arbitrary instrument that will only hurt this noble goal. It treats all Industrial Business Zones as the same when they are not, and it treats all sites within those zones as the same when they are not. Many sites that are suitable for manufacturing are just not attractive to self-storage developers. Some sites could easily accommodate multiple uses.

There is simply no reason why self-storage cannot co-exist with the city’s ambition to retain and attract manufacturing. The City Planning Commission and the City Council must work creatively and collaboratively with the self-storage industry to get this right.

Ari Goldman is the co-founder and vice president of SNL Development in the Bronx.

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