August 19, 2022

City Assisting Food Industry With Space and Money

Several of New York’s largest food factories have shut down in the past two years, but city officials are taking steps to preserve the industry.

Rather than conceding what is left of the city’s food-making trade, officials are arranging new spaces for kitchens and processing plants for small companies and securing private financing to help established food makers grow. On Tuesday, Mayor Michael R. Bloomberg and the City Council speaker, Christine C. Quinn, plan to announce that the city will put $1 million into a $10 million loan pool. The rest of the money will come from the Goldman Sachs investment bank.

Food makers have been one of the few sources of growth recently in the city’s industrial sector. While overall employment in manufacturing has shrunk by almost two-thirds since 1990 and continued to slide last year, the number of jobs in food-making businesses rose by about 6 percent last year, according to statistics kept by the city.

Even more important is the steady growth in the number of food companies started before and during the recession, said Seth W. Pinsky, the president of the city’s Economic Development Corporation. Although New York lost some big employers, including the Stella D’oro cookie factory in the Bronx and the Wonder Bread bakery in Queens, the total number of food businesses has been rising, he said.

Of course, some of the new companies were started by people who lost jobs on Wall Street or in other high-paying professions during the financial crisis, and many involve just one or two people baking cupcakes or cookies in their apartments. Still, city officials say they have seen evidence that the trend is sustainable and could create a substantial number of jobs for less-skilled workers and new immigrants.

“There’s a significant chance that a large percentage of these businesses will not be successful at all or will not be able to scale up significantly,” Mr. Pinsky said. “But you don’t need everyone to succeed. You want as high a percentage as possible to continue operating.

“You then need some of the business to go from small to medium sizes, and you want a small percent to really succeed and become large businesses.”

To improve the odds, the Economic Development Corporation is revamping several spaces, including the former Federal Building in Sunset Park, Brooklyn, to suit light manufacturing operations like food making. Next, it will look for a small-business lender to manage the $10 million loan fund established to help finance the growth of some promising small companies.

Alicia Glen, a managing director of the Goldman Sachs Urban Investment Group, said the food industry “struck us as a pretty good bet to make” because it offered opportunities for poor people and immigrants to find well-paying jobs in low- and moderate-income neighborhoods. Ms. Glen said the industry-specific fund would be a first for her group.

Speaker Quinn said these initiatives would provide “the much-needed financial lifeline to not only turn aspiring entrepreneurs into small business owners, but will also strengthen the existing industrial businesses.”

Adam Friedman, the director of the Pratt Center for Community Development, said he thought city officials could be on the right track because “New York is like this great big test kitchen.”

Mr. Friedman said the mix of cultures and steady flow of immigrants in the city created “new ideas for food,” some of which could become popular enough to be exported regionally or nationally.

New York would then have to fight to keep businesses from moving, Mr. Friedman said, because “after they get to a certain size, it may make sense for them to leave.” But that usually does not happen until a business needs more than 30,000 square feet of working space, he said. “That’s the tipping point.”

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