The Fringe Continues to Shrink as One-Time Ghost Towns Become Chic

NEW YORK CITY-The Bronx, for decades only considered a place to catch a baseball game or a means between New England and Long Island, is finally beginning to redefine itself as attractive and affordable space within the city’s still tight real estate market. It was the butt of jokes about urban decay as it continued to lose residents, businesses and retailers throughout the latter half of the 20th century even when other parts of the city saw prosperity. Now, Webvan Group Inc. is ushering in a new attitude toward the Bronx’s long-vacant industrial space.

As other e-technology companies are paying more than $50 per sf and investing in infrastructure without aid to rent in Manhattan, a growing number of companies are finding new homes in buildings that bring with them financial incentives from the city’s Economic Development Corp. Webvan has found that approximately $11 million in city and state sales tax abatements and reductions in property taxes, as well as additional tax credits for every local resident hired and help from the EDC’s job data bank in its hiring, made the Hunts Point section of the Bronx irresistible.

Webvan has signed a lease for a 10-acre, one-story building totaling 400,000 sf of space. The company will begin by hiring 500 employees with plans to expand to 900, many of the jobs paying $30,000 or more a year. The building, located at 331 Tiffany St., has been vacant for years. The property will function as a distribution center for goods ordered online as it did for Alexander’s retail stores.

Janel Patterson of the EDC tells GlobeSt.com, “The EDC is the city’s primary agency for getting the city’s commercial real estate back on track by selling or leasing it. We issue RFPs and ask developers to tell us how much and how many jobs will be created. We also manage city-owned in-place industrial parks, etc. If there is space available we issue an RFP.”

She continues, “Through the New York City Industrial Development Agency, which we administer, we help businesses to stay or relocate to the city. We offer triple tax exempt bond financing, certain tax abatements and act as a conduit agency so that the businesses can get the properties here and buy new equipment for them. We work with manufacturers, industry, high-tech companies and other commercial-type properties. There are low-cost financing loans, bonds and help with low-interest financing.”

The economic turn in the Bronx began with the high times of the last few years in the city and now these high times and the work of the EDC to draw new businesses to the area are reflected in this new deal. It demonstrates the strength of the market to transform once forgotten neighborhoods and incorporate them into the e-technology-driven real estate revolution. As the Bronx becomes revitalized, industry gains positive space alternatives and the fringe becomes less so.