Salmar Properties Violates Manufacturing Promise, Keeps the Exemptions

After receiving zoning exemptions and millions in tax breaks, Salmar Properties wants to go back on it’s promise to lease majority of Liberty View Industrial Plaza to industrial tenants

Industry City image Courtesy of joshsjackson via Wikimedia

(BROOKLYN, NEW YORK)— Last week, The Real Deal broke the news the EDC, the city-affiliated Economic Development Agency, had approved Salmar Properties’ request to lease more space to office and retail tenants at Liberty View Industrial Plaza, at 850 Third Avenue in Sunset Park’s Industry City. Salmar Properties had previously promised to reserve 85% of the space for manufacturing tenants. As of May 2019, only 20% of the property had been leased to manufacturing tenants, including Amazon, notorious for its worker’s rights violations.

Manufacturing companies provide jobs and encourage economic development in a community without bringing in the office space and upscale retail services that hasten gentrification. However, landlords can command higher prices from non-manufacturing tenants. As Gothamist reported in May 2019, in Sunset Park, a manufacturing tenant might pay $14 to $30 per square foot, while non-manufacturing tenants could pay up to three times as much.

Gothamist’s May report also details the ample benefits that Salmar Properties received for its potential troubles. In exchange for the unusually high requirement to lease 85% of the space to manufacturing tenants, Salmar properties received $37 million in of tax breaks and an exemption allowing them to bring in large retailers like Bed, Bath & Beyond, which, along with major subsidiaries like buybuyBaby and Cost Plus World Market, currently occupies nearly 10% of the space. The current industrial tenants occupy, in total, 15% of the property.

Now, with the tax breaks and big tenants in place, Salmar Properties wants to go back on its promise, but keep the exemptions. Salmar Properties insists that the decision was necessary, presenting evidence from Goldman Sachs that the industrial space simply was not viable. For many community members, Salmar Properties’ profit margin is of little concern. Salmar will lose out on millions in tax breaks if it cannot generate 1,300 new manufacturing jobs within the next year, The Real Deal reports.

For the past seven years, Salmar Properties has rebuffed criticism of its management tactics. Liberty View Industrial Plaza has sat half vacant for nearly seven years, despite Salmar’s adamant claims that they are actively seeking out industrial tenants. Despite the company’s assertions that it simply couldn’t persuade desirable manufacturing tenants, notably the big Garment Industry manufacturers, smaller potential tenants claim they were rebuffed and discouraged. Bob Bland, who tried to establish a small fashion incubator at the Liberty View Industrial Plaza but felt actively discouraged, told local Latino news outlet El Deadline that she suspected the company was deliberately holding out for higher paying tenants like Amazon. Tarry Hum, a CUNY Professor of Urban Studies who is well-acquainted with the machinations of property managers and developers, told the publication that she shared Bland’s suspicions, although neither could corroborate them.

New York City Council Member Carlos Menchaca and representatives Nydia Velásquez and Jerry Nadler have been outspoken in their criticism of Salmar Properties for years. All have expressed skepticism and disappointment repeatedly since 2011, when the EDC sold the site to Salmar Properties under the pro-business Bloomberg administration for a below market rate of about $8.50 per square foot. Now, the space is worth around $491 per square foot. Salmar Properties had no prior history of working with manufacturing tenants at the time, and was nonetheless trusted and tasked with leasing 85% of the space. Compromises with Salmar are viewed with suspicion both for the unusually favorable deal it received in the original sale of the site, as well as the company’s founding families’ generous contributions to de Blasios 2016 campaign.

Leave your vote

0 points
Upvote Downvote

Total votes: 4

Upvotes: 2

Upvotes percentage: 50.000000%

Downvotes: 2

Downvotes percentage: 50.000000%