More Efforts By Democrats To Make The People Poorer

When did it become a goal of Democrats and “progressives” to make the people poorer? I seem to remember a time many years ago when fully bi-partisan government policy in the U.S. was universally directed toward making the people wealthier. Private investment in new businesses was welcomed everywhere, and especially so if the investment involved nice clean white collar jobs and no substantial pollution. Also, in those days, when governments got involved in regulation of business, the general idea was to keep consumer costs low, for example in the regulation of electricity and transportation prices. You could dispute whether the means selected were the most effective to make the people better off, but irrespective of whether the measures actually worked or not, at least that was the goal.

Somewhere along the line, something changed. Probably the biggest thing causing the change has been the climate change hysteria, which has gotten so many people scared to death of an imperceptible increase in temperature that they are willing to go along with forcibly making everyone, and especially the poor, much poorer. Who can forget then-presidential candidate Barack Obama’s 2008 formulation of his plan for a cap and trade energy law specifically designed to further impoverish the poor: “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” Yes, that proposal got unanimous praise from the left. Today, progressive-run jurisdictions like California, New York and New England find myriad ways to drive the price of electricity up, from shuttering inexpensive existing nuclear and coal power plants, to forcing the construction of generation facilities using intermittent renewables, and so forth.

But it’s not just climate hysteria. The progressive ideology has become so infused with hatred of capitalism and of all profitable private business that Democrats are now enthusiastic to drive away private investment for no good reason at all. A fairly good example of this occurred in early 2019 in New York when a coalition of progressive and Democratic groups succeeded in scuttling the plans of Amazon to build a “second headquarters,” and create some 25,000 jobs, in the Long Island City neighborhood of Queens. In a post in February 2019 titled “We’ve Driven Amazon Out Of New York!” I summarized the mindset as follows:

Plenty in the opposition were against Amazon on the basis that they are against all new investment . . ., against all large businesses, against gentrification, against people (particularly poor people) improving their lot in the world, and in favor only of having the peons live on government support.

However, as I noted in that post, there were actually some potentially decent reasons to oppose that Amazon deal, notably that Amazon was planning on collecting on some $3 billion of tax incentives offered by the State of New York (and some by the City) to induce the investment. So we awaited another potential large private investment in an outer-borough community, particularly one lacking any large tax giveaways, to see how the progressive coalition would react.

That circumstance has now arisen; and so we now have the answer to our question. The circumstance is a proposed large private investment in a development in Brooklyn called “Industry City.” The proposed investment was to be approximately $1 billion to rehabilitate several decrepit former industrial buildings on the Brooklyn waterfront, thereby to enable new users to come in, particularly office tenants, retail, restaurants, and hotels. The proponents projected some 15,000 new jobs and greatly increased tax revenue for the City, all coming from buildings that currently are either vacant or used for low-value things like warehousing.

You will not be surprised to learn that this proposal has now been blocked by a coalition of progressive community “activists,” with the assistance of prominent and seemingly mainstream members of the Democratic Party.

First, some background. The Bush Terminal Buildings are a large complex of structures, aggregating perhaps 8 million square feet of space, built in the early 20th century on the Brooklyn waterfront bordering New York Harbor. Here is a picture:

For decades, the Bush Terminal was a thriving hub of manufacturing activity. However, after World War II, manufacturing gradually declined in New York City, and by the time the 21st century rolled around, the Bush Terminal was in poor condition. Much of it was vacant, and the rest mainly used as warehouses.

In 2013 a group of investors led by Jamestown Capital bought the majority of the Bush Terminal Buildings, approximately 5+ million square feet, and renamed their complex Industry City. They began a process of renovating buildings and attracting new tenants, which included not just manufacturers and warehouses, but also things like office users, art and design firms, retailing, and restaurants. A publication called The City summarized the recent status of Industry City in a piece on September 14:

Some 550 businesses located there employed 8,000 people before the pandemic shutdown. That’s 10 times the number of businesses and a four-fold increase in jobs since 2013, Industry City officials report. A million square feet are used for warehouse and distribution, another 1 million for manufacturing, 900,000 for office, 400,000 for art and design firms and 20,000 for retail.  Rents range from $15 a square foot to the mid $30s, cheap by New York standards.

The owners had plans for further expansion and many more new tenants and jobs. Last year, they proposed a relatively modest zoning change, principally to eliminate restrictions requiring most of the space to be used for manufacturing and warehousing, and thus to allow more use for offices, retail, restaurants, and hotels. With the zoning change, there would then be investment of $1 billion or more, upgrades and expansion of the existing buildings, and new tax revenues for the city estimated in the range of $100 million per year. Press coverage I have read mentions nothing specific about dedicated tax incentives, although to be fair I would expect that the owners and/or prospective tenants would claim whatever tax breaks they are entitled to as of right. The publication City & State New York described the proposal in a piece on August 5:

In March 2019, the complex’s owners planned to submit an application to the Department of City Planning, outlining a 10-year, $1 billion project that would expand the facilities’ square footage from 5.3 to 6.6 million, build hotels, new retail space, and academic centers, creating an estimated 15,000 on-site jobs. At the time, [Industry City CEO] Kimball said the proposal would “fully reactivate the long-dormant, non-productive buildings of Industry City into a job-intensive hub for manufacturers, innovators and entrepreneurs, while also maximizing economic opportunity for area residents and local businesses.”

So who could be against this? I’ll give you a flavor of the opposition. Here is the website of StopIndustryCity.com, sponsored by, you guessed it, the Democratic Socialists of America. It is completely fair to say that they hate all capitalism and all private investment. Some excerpts:

We need to urgently disrupt and dismantle the web of policies, agency bureaucracies, and predatory real estate speculation that promotes displacement and gentrification and prioritizes developer profits over community needs. . . .  We stand opposed to racist disparities in the distribution of municipal resources and seek to redress the legacies and present realities of environmental racism, racist exclusion and predatory inclusion inherent in NYC’s land use practices. . . .

It goes on and on from there. Another prominent community opponent was a group called Uprose, headed by a former Yale dean named Elizabeth Yaempierre. City & State in their August 5 piece gives us a summary of what Yaempierre thinks should be done with the property:

Uprose released its own proposal for a “Green Resilient Industrial District,” or GRID, that aims to . . . creat[e] opportunities for jobs in renewable energy production, sustainable business, and recycling and waste management. The plan would also incorporate green infrastructure to reduce flooding, such as installing rain gardens, wetlands, porous surfaces, and bioswales, which decrease stormwater runoff and remove debris and pollution.

All this from public subsidies, of course, rather than private investment. So was the opposition just the usual left-wing kooks and nuts with no idea of where wealth and income come from? This week, on Tuesday (September 22) we got a taste of the more serious opposition, when a letter addressed to the New York City Council (the body with final approval authority over the project) arrived, signed by essentially all elected representatives of the State Assembly, State Senate, and U.S. Congress whose districts include the land in question or anything nearby. The U.S. Congressmembers who signed include Jerrold Nadler (you know him — Chair of the House Judiciary Committee); Nydia Velazquez; Yvette Clarke; and Hakeem Jeffries. Jeffries, in case you have not heard of him, is the Chairman of the House Democratic Caucus, which is one of the five “leadership” positions for House Democrats. In other words, there is no dismissing this letter as something from an extreme or fringe group of Democrats. This is where the party is today. Excerpt from the letter:

Last March, a number of us wrote to the City Planning Commission raising concerns about such a large private rezoning application that would further exacerbate real estate pressures, displacement, rising rents, and forever shift the nature of the waterfront away from one of the few remaining manufacturing hubs to commercial tourism and service economy. . . .  Rather than cede leadership to a private developer forging ahead with their application, the City should take the initiative to reassess the economic environment, its manufacturing needs (particularly with the new mandates in recently passed climate acts), the needs of the local community for jobs, and the future of the Southwest Brooklyn Industrial Business Zone.

That same day the letter arrived, Industry City withdrew its rezoning application. At this point it is unclear to what extent, if at all, further investment or job creation will go forward at the complex under existing zoning. Neighborhood activists are taking a victory lap. Congratulations to them! Meanwhile, is this the vision that the rest of us want for our country?