April 21, 2023 By Michael Dorgan
Long Island City has witnessed rapid growth in employment over the last 10 years, while the number of housing and office units has skyrocketed. That trend is expected to continue — although the community faces some challenges.
That was the view presented by a cross-section of business people, real estate executives and the city’s head of planning, who spoke before approximately 300 attendees at the Long Island City Partnership’s 18th Annual Real Estate Breakfast on Wednesday morning, April 19. The event took place at the Ravel Hotel, located at 8-08 Queens Plaza S.
The neighborhood’s accessibility — including multiple subway stations and its proximity to Manhattan — is an important selling point for developers and prospective tenants/homeowners, while its existing buildings offer attractive retrofit opportunities to industries such as life sciences.
“We know that Long Island City is a neighborhood of opportunities, and that keeps us all optimistic as we look to the future,” said Dan Garodnick, director of the Dept. of City Planning and chair of the City Planning Commission.
Garodnick was the guest speaker at the breakfast and gave a snapshot of the neighborhood’s growth over the last decade.
He said that Long Island City currently has about 70,000 private sector jobs, a figure that is up by nearly 10,000 compared to 10 years ago. Additionally, there are about 15,000 people working in the public sector in the community, he said.
Office jobs have increased by 37 percent compared to the citywide average of 18 percent, Garodnick said, and proposed developments such as 23-10 Queens Plaza South — a 26-story office building next to the Queensboro Plaza subway station — would bring an additional 1,500 jobs.
“The project underlines the fact that even in the face of a global pandemic, people are betting on great office space near transit and close to where people live…,” Garodnick said.
David Brause, president of Brause Realty and chair of the LIC Business Improvement District (BID), which is managed by the LIC Partnership, moderated a panel discussion about the current state of play for the neighborhood and the outlook for its future.
Panel members included Mitchell Arkin, executive director of Cushman & Wakefield; Shih Lee, owner of local restaurants SAPPS and SHI; Yasmeen Ahmed Pattie, principal at East Egg Project Management; and D. Patrick Pryor, head of real estate at Sotheby’s.
Brause said that following the pandemic — in which many people were forced to work from home — there is a surplus of office space availability while residential units are being snapped up. He said increasing office occupancy rates is a big challenge for Long Island City.
Arkin, of real estate firm Cushman & Wakefield, dug deeper into the figures and said that there are around 13 million square feet of office space in Long Island City, with about 3 million square feet available on the market.
“The big problem is where the Class A office space is — which is the central business district of Court Square and Queens Plaza North — has a 43 percent vacancy rate, and so the challenge is finding office tenants that want to come to Long Island City,” Arkin said. “We’re having problems with companies taking space … there’s a certain segment of the working population that’s just never people coming back to work [in offices]. They’re not people facing, they can work from home, they want to work from home and they don’t need to be in the office. So there’s a huge inventory available in Long Island City in general.”
Arkin said that the neighborhood is competing with Manhattan to attract office tenants, with Manhattan having 90 million square feet of office space available on the market.
“With the lack of demand, we are going to see rents drop… and we’re already seeing that happen.”
Meanwhile, Long Island City continues to appeal to the life sciences industry, according to Pattie, a market expert who was representing East Egg Project Management. The company conducts feasibility studies, market analysis, and implementation plans for developing the life sciences in Long Island City.
She said that the area’s rich manufacturing history means that there are many loft buildings available for retrofitting purposes. For instance, Pattie noted that Innolabs has opened at 45-18 Court Square W., inside a refurbished building.
“Long Island City is so close to Manhattan and the airports… it’s a great place for biotech,” Pattie said.
In terms of small business, restaurant owner Lee said that residents are enthusiastically out socializing again following the pandemic.
He said he wants outdoor dining to stay but raised alarm about food truck vendors.
“I get that they serve a purpose, but they kind of get in the way of people who have to build their brick and mortars, who have to pay rent, utilities … and they can just come during the busy hours and then leave, it’s tough,” Lee said. “With all these trucks, it’s a zoo. It’s unsightly. It’s obviously not good for the people who have businesses there, but [if] there’s a way we can regulate it … it would make it that much better for everyone I would think.”
Garodnick, in his speech, said the mayor has proposed several zoning changes that will help spur economic growth and increase the supply of housing via an initiative called “The City of Yes,”
The plan consists of three pillars; economic opportunity, housing opportunity and carbon neutrality,
In terms of economic opportunity, the city is proposing a zoning amendment in the fall which would remove various limitations on where small businesses and entrepreneurs can operate. For example, food, craft and other production activities are typically confined to manufacturing districts in order to protect public health and safety. However, the mayor’s office says that these rules often create unreasonable restrictions on modern businesses which use clean technologies.
The mayor’s plan also aims to tackle the housing crisis by increasing the number of units across the city. The plan involves lifting density restrictions, providing tax incentives for developers to convert office space to housing, and easing limitations on homeowners looking to modify their properties.
Queens Borough President Donovan Richards also spoke at the event and praised Long Island City, saying the neighborhood plays a major role in the borough’s success. He also highlighted the importance of supporting arts and culture in the neighborhood.
He said that investment — both public and private — has played a crucial role in the neighborhood’s economic gains and he touted the decision by JetBlue to keep its offices in Long Island City as a major achievement. Furthermore, he said that $18 billion is being invested in to JFK Airport to modernize the facility. In February, ground was broken Terminal 6, which will serve as JetBlue’s primary home.
On housing, Richards said that Queens was welcoming to new developments, noting that Queens produced more than half of the city’s housing units in 2022.
“Our borough, and I’ve made very clear, will not be the borough of ‘no,’” Richards said. “We’re going to be a borough that builds. We are open for business and we understand the myriad of challenges we have when you think of affordability [and] when you think of the need to fulfill commercial vacancy spaces.”
Richards said that his office is also looking into developing the Anable Basin in and around 44th Drive — a large section of land on the Long Island City waterfront where Amazon HQ2 was slated to go. He said he also wants to explore the possibility of transforming the Dept. of Education building at the site into a manufacturing and/or business incubator space.
“So we need city government, the private sector and the community to work together to create a flexible, sustainable future for each and every one of us,” Richards said. “Queens is truly the future.”