Businesses line up to join Navy Yard
This month, Atair Aerospace Inc. will close its two Red Hook locations and move into a 10,300-square-foot space in the Brooklyn Navy Yard.
“We looked at other areas in Brooklyn,” says Rick Zaccari, chief operating officer of the military-parachute maker. “The yard is a good fit for us.”
Others feel much the same way. In the past three months, six other small businesses have taken up space in the 300-acre industrial park. Meanwhile, another 10 companies, including design firm Crye American, have expanded there in a flurry of activity that is making the yards a rare island of prosperity as businesses scale back in many other neighborhoods.
The occupancy rate in the 40 rentable buildings is now 99%, according to the nonprofit Brooklyn Navy Yard Development Corp.
“The key to the navy yard is its low rents,” says Councilwoman Letitia James. “It is recession-proof.”
Nearly $200 million in infrastructure investments from the city over the past few years has also helped. While development has stalled across most of the city, the yard is undergoing its largest expansion since World War II. Over the next two years, more than 1.5 million square feet of space will be added and 2,000 jobs created.
“We are eager to get new space,” says Andrew Kimball, president of the BNYDC.
Last month, a $20 million restoration of the three-story, mid-19th-century Building 92 began. The 9,500-square-foot structure will be used primarily for an exhibition center but will also include some office space. In addition, the state Senate recently committed $15 million to develop a green manufacturing center at the yards. Construction on the $30 million facility is expected to begin next year.
Meanwhile, in a move welcomed by the yard’s neighbors in Clinton Hill, the BNYDC expects to soon select the developer that will bring the yard its first supermarket. It will be built on the site of what once was Admiral’s Row. Eight proposals were received last month.
“We look forward to the supermarket,” says Ms. James. “It is critical that the residents [who live nearby] in public housing do not live in a food desert.”
Tenants also welcome the yard’s growth.
“It is not so rough anymore,” says Douglas Steiner, chairman of Steiner Studios, the yard’s largest tenant since 2003. “The city has been helping to retain industrial businesses and bring more artisans and artists here.”
Steiner itself has already expanded three times. It is currently working on a $60 million gut renovation of a 250,000-square-foot building for use as additional stage and studio space. The new building will bring 1,000 television and film production jobs, according to Mr. Steiner.
Others have also flourished in the yard. Surroundart, a full-service fine arts company, has grown so fast since moving into the Navy Yard eight years ago that it recently leased the entire 90,000-square-foot Perry Avenue Building on top of the 70,000 square feet of space it already occupies.
The $25 million Perry Avenue Building is the yard’s latest green facility and incorporates building-mounted wind turbines.
Most of the yard’s 240 tenants are much smaller. In fact, almost 70% of them occupy less than 5,000 square feet of space. For most, the Navy Yard offers an unbeatable combination of quality space and cheap rents. Mr. Zaccari of parachute maker Atair, for example, reckons he will save as much as 30% on rent and utilities a year by moving to the yard.
By Amanda Fung