Garment District Rezoning Passes City Council

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On December 20, the City Council unanimously passed a rezoning of the garment district, the historic area bound by 35th and 40th Streets and by Broadway and Ninth Avenue. Since 1987, city law has required that manufacturing space be preserved at a one-to-one ratio with office space when property owners repurpose industrial buildings in parts of the district. However, with the closing of many fashion firms due to the move of US apparel production to China, much of the designated manufacturing space has been left empty.


First proposed in June, the new rezoning will allow landlords to convert their properties to office space as they see fit while providing special incentives for fashion manufacturers. Mayor Bill De Blasio said the vote will keep New York City as a global fashion capital, ensuring "the garment center will continue to thrive as a mixed-use neighborhood."


The new guidelines include:


  • Tax abatements from the Industrial Development Agency to landlords who give fashion tenants long-term affordable rents. The benefits accrue to landlords who offer 15-year leases at $35 per square foot to businesses involved in the garment production supply chain (such as pattern-making, embroidery, and dyeing).
  • Up to $20 million from the city to purchase a building where fashion manufacturers can lease space at below-market rents. The city is seeking a partner to acquire and operate the space.
  • $14 million from the city to expand a grant program to help fashion manufacturers add equipment and make renovations.
  • Plans for a 200,000-square foot-clothing production hub to be created at the Made in NY Campus in Sunset Park, Brooklyn.


The Council also required hotel developers in manufacturing zones across the city (including the Garment District) to obtain a special permit from the City Council and the City Planning Commission in order to build. The goal is to limit the amount of hotel development that may occur in industrial zones.


We will keep our readers informed of any significant developments.  All our prior tax alerts are available on the Updates page of our website.

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