NYC EDC: A Working Model for Urban Investment & Procurement

Tom, could you begin by describing the mission of the New York City Economic Development Corporation that you’ve served for 13 years?

Tom McKnight:I’ve been a part of the New York City Economic Development Corporation—a non-profit corporation within the City of New York. EDC is the city’s primary vehicle for economic development in New York City. All of our work expresses itself in creating good jobs and developing dynamic, resilient neighborhoods.

To give our readers a sense of the reach and importance of NYCEDC’s 400-person organization, elaborate on its focus and delivery capabilities.

To accomplish all of our goals, we have three lines of business. 

The first is a capital construction and asset management firm, which oversees 80 million square feet of ports, cruise terminals, heliports, industrial facilities and other city-owned assets, and implements a $3 billion capital construction portfolio for park, streetscape, and infrastructure development.

The second is a real estate planning & development firm, which focuses on neighborhood-wide planning and physical development, harnessing underutilized assets and brownfield sites, and catalyzing growth around the city. 

And finally, we have a strategic planning & implementation firm, a “think and do tank,” which helps traditional industries adapt to global disruption, encourages the development of emerging sectors, and helps build strong career pathways through our workforce system. 

How we achieve these goals and implement these projects depends on the specific need of New York City’s neighborhoods and economy. We can deploy different types of expertise to deliver different types of projects that respond to the different and unique needs of every community and borough.

We can deliver capital projects; we do planning for neighborhoods and for sites; we can do specific transactions; and we work with specific industries. Probably the most well-known industry has been the tech sector—specifically the Cornell-Tech project, which will be a new applied sciences campus within the City of New York.

How has New York City and the mayor’s office valued NYCEDC’s expertise and resources? 

The NYCEDC is controlled by the mayor. We have a board of directors, and the mayor has the greatest number of appointees to that board. 

The various mayors over time have recognized the value of our entity. 

On a basic level, we operate on a contract with the city to provide asset management and economic development services. But we’re really an extension and an arm of the city. Mayors look upon us that way, as a vehicle to deliver on their priorities.

How is NYCEDC organized? 

I’d mentioned the overall composition of EDC earlier. But I oversee the Planning, Development, and Transportation division, which includes a technical planning group that supports the public approvals process—including the Department of Environmental Conservation permitting around wetlands and hazmat. Our development wing implements large-scale neighborhood planning. And our transportation group oversees rail, maritime, and air freight, cruise terminals, and ferry systems. 

We generate our projects through a lot of collaboration. It’s an iterative, ongoing process. We’re always generating ideas. 

With the change of administration we went through a more formal exercise to consider the priorities of the new administration and, from a planning perspective, the best way to deliver those projects. Through a collaborative process with the city, we’re now implementing some of those ideas that emerged from our process. 

Could you provide an example of how EDC planning is involved in prioritizing NYC economic development?

Let’s look at the city’s Roosevelt Island Cornell-Tech project. This is an applied science campus in partnership with Cornell and Israel’s Technion University that aims to double the number of engineering grads in NYC in less than a generation and produce an economic impact of more than $33 billion. 

The project did not originate with a specific project or end goal. Instead, it started with an exercise that asked, “What’s the next big idea for the city? In a changing, global economy, what sorts of things should the City of New York be focusing on to diversify our economy?” 

Through a thoughtful, step-by-step process, we wound up recognizing that where we were falling short was in the development of tech talent. To solve that issue, we needed to deliver more graduates in the tech arena who would not only study there and work in NYC, but who would also generate ideas, generate businesses, and generate jobs.

So you didn’t start out trying to redevelop Roosevelt Island. You started out with an economic development challenge.

Exactly right. We recognized that gap. 

Cities like Boston and Stamford were delivering greater amounts of commercialization of academic ideas than the City of New York was. Part of the reason was that we were simply not producing enough graduates with tech degrees who were moving out of their academic life into business life. 

That led to a more formal procurement, where we issued a request for expressions of interest—we called it “Applied Sciences.” We challenged institutions to propose the creation of a new campus within the City of New York. 

The request was not focused on Roosevelt Island, where Cornell Tech ultimately came together. It was much broader than that. We offered a range of sites around the city, which we said were really suggestions. Respondents could come back with private sites if they thought they were more workable. 

A bunch of institutions took us up on our offer. As a result, we issued a targeted request for proposals that ultimately led to the selection of Cornell and the Roosevelt Island site. 

But the Applied Sciences Initiative also includes four other, smaller partnerships: the Center for Urban Science & Progress with NYU, which focuses on urban and resiliency innovations; the Columbia Institute for Data Sciences and Engineering; the Carnegie Mellon-Steiner Studios Integrative Media Program that combines arts and design with interactive computing; and the Mt. Sinai Institute of Technology, which focuses on bio-technology applications for healthcare

What’s next on NYCEDC’s agenda to attract and scale economic development?

Right now, we’re looking at the life sciences sector, which the mayor just announced.

The life sciences arena is a little bit different, in that the talent is already here. We’re host to some of the best centers of basic science on earth, leading pharmaceutical companies like Pfizer and Roche, the country’s largest healthcare system, and a robust investment environment. 

But in the City of New York, we don’t see much of that research becoming commercialized, because we don’t have spaces where those emerging life science businesses can locate—lab space and smaller office space. So many potential innovators and employers are taking the science they came up with here and commercializing it outside of the city. 

We’re starting an initiative to try to address that. It’s a second-stage challenge, where commercialization is the main issue. Our question is: “How do you nurture these ideas over time after they’re created?”

Let’s take a step back here. Before there was an NYCEDC, how did economic development projects like the above get done within the City of New York, if they did?

They got done in selective, different ways through precursor organizations and agencies, but not in the same consolidated way that they happen today. 

As I’m describing, we can provide a lot of different services under one roof. That was the key thing that didn’t exist in the more distant past.

Is it EDC projects’ speed-to-market that’s attractive to the mayor and the city?

Absolutely. We’re not an agency, so we can be a little bit more nimble in the way that we do things. Our procurement is a little more flexible than city agencies’. We can deliver diverse projects—we do them right and do them quickly.

As a non-profit with a direct but quasi-arms-length relationship to City Hall, how is the organization funded? How did it grow to now comprise 400 staff? 

Our asset management is the foundation for our funding. We have a portfolio of properties throughout the city. They’re predominantly industrial, but also include cruise terminals and other assets. The proceeds that come off of those properties support our operations.

We get city capital money for capital projects, and we make payments back to the city that represent a portion of the revenue we make off of our properties.

Have other municipalities looked to NYCEDC as a model? Do you look to other jurisdictions for ideas?

We’re always looking around the nation and the globe at best practices. And we’ve heard from various cities and countries that we’re seen as a model for efficiencies, with a lot of things under one roof.  

A lot of times we look within the City of New York and get frustrated about the hurdles and bureaucracy that we have to deal with. But if you take a broader view and look at what other cities and countries have to deal with structurally to get things done, you can better appreciate the efficiencies we’ve created through an organization like EDC. 

What cautionary factors should other cities keep in mind when looking to emulate NYCEDC as a model for urban economic revitalization?

The EDC, as it currently exists, was a long-time evolution. When it began, it was not an entity with all the things that we provide now. That didn’t happen at once—it evolved over decades. 

The challenge when seeking to create an entity today within a municipality or county is that those cities and counties have figured out how to do things in the absence of an entity like ours. Maybe it’s not the most efficient or best way. 

But that can make it more challenging to introduce a new kind of entity, whereas the evolution of our organization goes back 30 years.

You’ve been through two mayoral administrations while at the EDC. What impact does a mayor have on the priorities, administration, and funding of the EDC?

We’re a flexible organization. We have our whole portfolio to manage and the day-to-day projects that we do, but we really act as an implementation tool for the administration. The priorities of those changing administrations are going to shift. We’re there to implement the agenda that the mayor identifies. For the current administration, equity and affordable housing are important priorities.

Could you describe the EDC’s role in pursuing that housing agenda?

New York City has a Department of Housing Preservation and Development that’s responsible for the delivery of affordable housing across the city. We’ve been working very closely with them since—and even prior to—the announcement of the mayor’s housing plan. 

We’ve worked with them on the development of an inventory of public properties that could be developed for housing or mixed-uses. We’ve worked with them in identifying which sorts of projects the Housing Department and the EDC should each be responsible for delivering.

We recognize that HPD is best at delivering straight affordable housing. When it comes to mixed use projects, or looking to take the value out of the property and put it into affordable housing rather than subsidizing it from the outside, that’s more within our expertise. Those are the sorts of projects that we’re managing.

Tom, clearly New York was scarred by Superstorm Sandy, which led to Mayor Bloomberg’s “Special Initiative for Rebuilding and Resiliency.” How does resiliency now fit into the agenda of the EDC?

We are directly involved in a lot of resiliency efforts, including capital projects. 

One of the harder hit areas was the Rockaway Peninsula. We’re doing a major project to rebuild the boardwalk along the entire Rockaway Peninsula, which also doubles as a resiliency measure.

You’re doing that just on properties owned by the city?

Yes. 

My group is also working on a whole range of protection plans for lower Manhattan, the north shore of Staten Island, and Red Hook, Brooklyn—which cover physical and social protections for different neighborhoods. There’s a lot of federal money coming out of the post-Sandy efforts, some of which is coming to us to deliver plans and projects. 

Tom, describe for our readers EDC’s role in enhancing New York City transportation infrastructure, planning, and management?

We tend to be involved in transportation projects in two ways. 

One is around asset management. Our portfolio includes a couple of ports and a railroad in Staten Island. We have a portfolio that’s aimed at freight transportation and freight logistics. 

When we’re doing neighborhood planning and redevelopment work, a big part of that is transportation—looking at how people move through their neighborhoods and the city. For the last few years, we’ve run the East River Ferry, which enhances connectivity between Manhattan and growing new neighborhoods in Queens and Brooklyn. Over the coming years, we’re expanding on that to roll out a Citywide Ferry System that links the city from the Bronx in the north to Staten Island in the south and the Rockaways in Queens in the east. 

To close, if we have a chance to speak again with you in 2016 about EDC’s accomplishments, what will be our focus?

We have a lot of different projects in different stages of their lifecycle. Right now we are focusing most on new projects that we’ve identified by working collaboratively with the administration. 

We’re working on big development and neighborhood projects around planning, zoning, infrastructure, transportation and equity. It’s my hope that, in 2016, we’ll have articulated visions and strategies for those neighborhoods and we’ll be starting to shift into implementation.