Good Jobs Go as Junior's Bakery Closes

It’s Not About Nostalgia – Good Jobs Go as Junior’s Bakery Closes

Under the headline New Jersey is the New Brooklyn, Crain’s New York Business reported last week that Junior’s Famous Cheesecakes is moving its manufacturing facility from Maspeth, Queens to a new location in New Jersey. The New York Times reported that only fifteen of the seventy-five employees are moving with the plant to New Jersey, which means fifty New Yorkers are losing their jobs.

When an iconic business closes, New Yorkers shake a fist. Nobody likes it when the things we love about our city disappear. But this story isn’t just about nostalgia. Junior’s restaurant, where the cheesecake is served, will stay where it is on Flatbush Avenue in Brooklyn, hopefully making people a little happier (and a little heavier) for years to come. The soon-to-be-shuttered factory in Maspeth that manufactures the famous cheesecakes may not be as recognizable as the restaurant – but the good-paying jobs it provides are just as real.

And it’s not just limited to Junior’s. Rising rents for manufacturing spaces are forcing jobs out of New York City every day. Alan Rosen, the owner of the family-run business, captured the issue when he said “We can’t afford the real estate around here…New York is very interested in residential development, but commercial is tough.”

The specific reason for the move is most likely a simple New York story – the lease was up, and the landlord wanted a big increase in the rent. Often this happens to factories because of our outdated zoning code. Developers will take advantage of loose restrictions in the City’s manufacturing zones to develop other allowed uses – hotels, entertainment spaces, or other business that can command higher rents. For factories and other industrial businesses, the rents they can afford while maintaining even a slim profit margin is far lower than the prices these non-industrial uses can sustain.

Or sometimes, these moves happen because of speculation – land is worth exponentially more if you can build market-rate housing on it, so owners will warehouse the land in hopes of pressuring the city into a rezoning if for high-end residential development.

But both these scenarios generally happen in manufacturing areas where the housing market is hot – places like Williamsburg or Long Island City. Junior’s bakery is in a heavily industrial area of Maspeth – one that isn’t close to transit, and isn’t near an overheated housing market.

So then why was Junior’s pushed out? In the opinion of local industrial business experts the likely culprit is that manufacturing land prices in Maspeth are rising sharply due to the loss of land zoned for manufacturing in other areas of the city. In the last administration, over 1,800 acres of manufacturing zoned land were rezoned for high-end residential use. With so many industrial businesses looking to open or expand, this loss of land puts severe pressure on rents in remaining industrial areas – like Maspeth. It’s really no different from residential gentrification – tenants are forced out of one neighborhood when the rents become too high, so they move to another, cheaper neighborhood, pushing up rents there.

The overall decrease in industrial land means that the manufacturing sector can’t expand as much as it can and should. The City’s industrial sector is growing, with 13,000 jobs added from 2013 to 2014. But the sector is running out of room, and rising rents in all industrial areas means that even the actual industrial uses will be pushed to the high end of the spectrum, leading to fewer of the higher-wage working-class jobs that bring the impact on economic inequality that policy makers want.

This matters because the industrial sector is a key source of good jobs. As our economy becomes increasingly inequitable, industrial jobs provide an important opportunity for economic security for working-class New Yorkers. The average industrial sector wage is $50,934, more than double the average retail-sector wage of $25,416.

There is a lot that the City can do to protect our industrial jobs. ANHD and the Pratt Center last year recommendations to protect and expand our urban industrial sector. The City Council also recently policy report on the topic. All of the recommendations require the City to increase zoning protections for the industrial sector, while also recognizing the importance of integrating it into the great city landscape. But the bottom line is simple: if we don’t protect our industrial land from the pressures of the residential real estate market, it will drive up prices everywhere, and New Yorkers will continue to lose good jobs.