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| Strategic Vision For Change |
The Upper Manhattan Empowerment Zone’s (UMEZ) strategic vision for change is to sustain the economic revitalization of all communities in Upper Manhattan through job creation, corporate alliances, strategic investments and small business assistance.
To achieve this strategic vision, UMEZ developed a plan that includes a focus on anchor retail projects that create employment and ancillary development. In addition, UMEZ extends support to local small business through lending and technical assistance. Finally, with its Cultural Industry Investment Fund, UMEZ provides grants to cultural enterprises in the communities it serves and builds upon the creative energy and history of Upper Manhattan.
The Bronx Empowerment Zone has experienced unprecedented growth as a result of projects coming to fruition. Projects such as the New Fulton Fish Market, the rezoning of Port Morris section of the southern Bronx and the new Gateway shopping complex at the old Bronx Terminal Market are just some of the highlights of the reinvigorated Bronx Empowerment Zone.
The Bronx EZ’s strategic goals focus on the following: attaining and maintaining both budgetary and programmatic self-sufficiency; sustaining service focus and achieving results; utilizing the EZ mechanism as a primary economic development tool and guide for the entire Borough of the Bronx; promoting the creation of environmental services businesses that provide employment while improving the environment; enhancing marketing and outreach; and creating strategic alliances between the Bronx EZ, other local and national economic revitalization entities and industries important to long-term goals of the Bronx EZ.
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| Community Based Partnership |
In 2005, UMEZ continued to strengthen its relationship with the community by funding three micro-lending organizations, five cultural organizations and three-start-up small business.
UMEZ provided grants to its micro-lending community partners. They include Harlem Business Alliance, the East Harlem Business Capital Corporation and the Audubon Partnership for Economic Development. Each provides technical assistance to small businesses in the Upper Manhattan community.
UMEZ continued to strengthen the artist community by extending grants to cultural organizations, which include Mama Foundation for the Arts, Foundation for the Promotion of Dance, and Harlem Textile Works.
Business Resource and Investment Service Center, Inc. (BRISC), an initiative that provides technical assistance and lending to small business in the amounts between $50,000 and $250,000, was re-established in 2005. BRISC approved three loans during the fiscal year.
In 2005 the Bronx Empowerment Zone approved 6 grants, of which two were for feasibility studies for future environmental projects. Total grants totaled $1.65 million. This past year the BEZ has focused on different ways of assisting businesses. One of those areas was to provide assistance to smaller small businesses that were not ready for financing, but had operational or financial deficiencies that hindered business and job development. The Bronx Small Business Initiative afforded the BEZ the opportunity to do just that.
The borough of the Bronx has been the focus of positive attention in recent years. Coupled with a wave of new interest and investment, the Bronx is undergoing a process of rejuvenating itself and its marketplace. In the midst of this revitalization, however, many small businesses that have served the community for decades suddenly find themselves unable to survive in the wake of established big businesses flooding the marketplace. During this exciting period in the Bronx’s history, it is essential to preserve the small businesses that have for so long been a part of the economic and social culture of the community.
The Bronx Small Business Initiative (BSBI) is an initiative designed to provide ten (10) Bronx small businesses within the Bronx Empowerment Zone community with professional consulting services. The BSBI is based on the William Jefferson Clinton Foundation’s framework of assisting small businesses to compete effectively in the changing market place by providing them with top quality technical and managerial assistance.
The BSBI has provided Empowerment Zone small businesses with professional consulting analysis that can lead to more effective decision-making. Booz/ Allen/ Hamilton, S.C.O.R.E., MBA Corp, BOEDC, Small Business Development Center at Lehman College and Manhattan College have provided hands on consulting service, assisting the companies to develop a sound marketing and business plan for future growth. The consulting services provided focus on business components that most small business find difficult to address, due to both time and dollar constraints.
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| Economic Opportunity |
To increase the economic opportunity for residents in the Central, East, and West Harlem, Washington Heights and Inwood areas, UMEZ works with community and city wide partners to improve access to capital and job opportunities for residents and businesses in Upper Manhattan. UMEZ continues to emphasize an integrated investment strategy dedicated to aligning with other public and private partners to:
· Recruit businesses in growth industries including Entertainment/Tourism, Retail, Business Services and Health Care;
· Develop local workforce by preparing residents for job opportunities within and beyond Upper Manhattan boundaries;
· Provide support for small businesses and local institutions to enable them to expand community wealth.
In 2005, UMEZ approved twelve projects that are expected to create an estimated 305 full-time, part-time and construction jobs combined. Overall, UMEZ committed a total of $5.5 million to support those initiatives.
UMEZ’s Business Investments division in 2005 closed eleven transactions with a combined loan and grant dollar value of $14.1 million. One of those transactions includes a healthy, flavorful and affordable Asian restaurant that provides a unique and needed service to the community. Ginger Restaurant offers an organic menu that provides a healthy alternative to the dinning experience in Upper Manhattan. Nubian Heritage Direct is another example of our commitment to the improvement of the commercial environment in Upper Manhattan. Nubian Heritage Direct is an online retailer of African-themed products and is the extension of the Nubian Heritage franchise that commenced operations as a local street vendor. Now, headquartered in Harlem, the company provides lifestyle products that cater to the entire Pan-African market.
UMEZ’s Program and Nonprofit Investment division, through the Cultural Industry Investment Fund (CIIF), provided support to Upper Manhattan’s diverse arts and cultural community. In 2005, twelve technical assistance contracts were awarded totaling more than $575,000. These contracts provided support to cultural and arts organizations that require assistance with organizational development and planning needs. Five direct grants were awarded to other cultural organizations totaling $980,000.
In 2005, Business Resource and Investment Service Center, Inc. (BRISC), restarted operations with three loans. The loans included $140,000 in start-up capital for Karrot Inc., a Harlem based organic grocer. The second loan provided $250,000 in expansion capital for the HEC Real Estate Group, a low-income housing service provider. The third loan for $250,000 assisted financing studio gallery space construction for Ubivore Worldwide, LLC, owned by two artists, one of which was selected as a 2005 Macarthur Fellow. BRISC’s lending program targets small businesses to help with their capital needs.
The Bronx Empowerment Zone has approved loans totaling $5.4 million dollars, with total project costs of approximately $17 million. In total these investments will result in approximately 110 new jobs for Empowerment Zone residents.
After several delays the New Fulton Fish Market is scheduled to open in Hunts Point in November 2005. The new market is projected to bring more than $1 billion in new economic activity and about 700 jobs to Hunts Point. The New Fulton Fish Market at Hunts Point will be one of the world’s largest fish markets, second only to Tokyo in sales volume. The Fish Market will join the produce and meat markets to make the Hunts Point Food Distribution Center the world’s premier food distribution center. The BEZ assisted the NFFM Cooperative with long-term financing for start-up expenses and equipment. The market itself will be run by a staff of forty employed by the cooperative , providing security, seafood unloading, sanitation and maintenance services, as well as day-to-day operational management. Also as part of an effort to reduce air pollutants in Hunts Point, the BEZ has worked with the Bronx Initiative for Energy and the Environment to provide zero interest financing to the NFFM tenants that purchase electric forklifts, thus helping to lower fuel emissions.
The re-zoning of the Port Morris area has allowed for the development of mixed-use buildings and the renovation of new loft apartments in once derelict manufacturing warehouses. This has resulted in an influx of residents to the BEZ, attracting artists, computer technicians and business entrepreneurs seeking live/work space in the Bronx.
The Bronx Terminal Market on west side of the BEZ is being readied for redevelopment that will bring a 1 million square foot shopping plaza and garage. This project will also provide much needed access to the Harlem River Waterfront which has been neglected and unavailable to BEZ residents.
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| Sustainable Community Development |
UMEZ, since its inception, has invested in a number of projects that have a lasting impact on the businesses, cultural institutions and the community of Upper Manhattan. UMEZ pursues economic and cultural development projects to foster an improved quality of life and increase economic opportunity for citizens in the communities it serves.
UMEZ continues to develop sustainable business entities in the community. Harlem USA Retail and Entertainment Complex represents an investment that has created ancillary businesses. The facility houses movie theaters, as well as retail properties that have created employment opportunities for the community. Our EZ Bond financing initiative has enabled the creation of The East Harlem Auto Mall. The auto mall includes a Chevorlet and Saturn dealerships which provide economic stability and employment opportunities. Lenox Lounge, a restaurant lounge steeped in Harlem jazz history, attracts tourist from around the world. Our loan to Lenox Lounge helped to build out seating capacity as well as maintain the historical integrity to the business’ art deco interior design.
On the Cultural Investments front, UMEZ’s grants to Apollo Theatre, Studio Museum in Harlem, and the Classical Theatre in Harlem allowed these entities to expand their capacity and provided cultural stability.
The boards of directors of the Bronx Overall Economic Development Corporation's Bronx Empowerment Zone and the New York Empowerment Zone have approved a 1 million dollar grant for the Bronx Museum of the Arts, to be used to help build the second phase of the museum’s renovation and expansion project. The Bronx Museum of the Arts (BxMA) is a 20th-century and contemporary art museum, founded in 1971, to serve the culturally diverse populations of the Bronx and the greater New York metropolitan area. The Museum has a long-standing commitment to increasing and stimulating audience participation in the visual arts through its permanent collection, special exhibitions, and education programs. It introduces visitors to the dynamic and challenging voices that shape the contemporary art field of both today and tomorrow.
The new plan addressed renovation of existing galleries, classrooms, amenities (lobby, café), administrative offices, exterior, and building systems; as well as phasing, cost and strategies for future expansion. The museum’s board determined that the key to increasing the museum’s audiences was to reach out to Bronx residents, particularly those in the immediate South Bronx neighborhood.
The BEZ has also provided a grant to Per Scholas which has been providing new and reconditioned “access” computers at a very low cost to technology deprived students and families and the teachers, schools and organizations that serve them in New York City and beyond since its inception in 1994 through its Access Program . To drive this program, Per Scholas receives donations of recent model computers from over 120 corporations and financial institutions, including JP Morgan Chase, Citibank, Fleet, ConEd, Morgan Stanley, etc. (a more extensive list is available). Per Scholas then, using its own internally trained technicians, reconditions these computers and sells them to schools, families and other non-profits. To date it has connected more than 50,000 low-income families throughout the United States, and continues to serve them through its own bilingual help desk.
In addition to providing jobs to the community and computers to low-income families, Per Scholas trains local residents to be computer technicians for other organizations. Each year its training program graduates 150 community residents as “A+” computer technicians, placing them in jobs with salaries of $20,000 or more, with benefits and with the possibility for further advancement. All of the program’s students come from high-poverty communities, and are typically individuals who face multiple barriers to employment. To date, Per Scholas has trained, placed and continues to monitor over 900 individuals in mainstream technology jobs. Collectively these graduates earn over $16,000,000 per year. The grant Per Scholas received will provide start up cost funding for their computer recycle program which they anticipate being self sufficient within two year.
The Women’s Housing and Economic Development Corporation (WHEDCO) operates a kitchen incubator within a 4,000 square foot commercial kitchen that provides high quality licensed kitchen space to entrepreneurs. WHEDCO’s kitchen incubator allows small and mid-sized food manufacturers and caterers to grow their businesses without high initial capital investment. In order to increase utilization of the incubator and generate additional revenue, WHEDCO plans to invest in capital improvements to the space, market the space more widely, and provide needed services to kitchen tenants so that these businesses can achieve scale and create jobs. The BEZ has provided grant funding for the upgrading of these kitchens so that they will be more condusive to caterers that wish to lease space.
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| Tax Incentive Utilization Plan |
UMEZ disseminates tax incentive information to merchants in the Upper Manhattan Empowerment Zone through various mediums that include seminars, print literature and community partners. In fiscal 2005, UMEZ conducted seminars with NYC Parks Department and Audubon Partnership for Economic Development to inform them of the many services that UMEZ offers and making them aware of tax incentives within the Empowerment Zone.
A marketing package has been assembled that outlines our mission. The package includes a glossy brochure titled, “Upper Manhattan Tax Savings.” The brochure lists some of the tax incentive available to businesses in the Zone. The brochure and marketing package are available to office walk-ins as well as mailed to businesses that request the information.
UMEZ works with community partners. They include Audubon Partnership for Economic Development, East Harlem Business Capital Corporation and Harlem Business Alliance. Through community partners, UMEZ is able to reach businesses that are unfamiliar with UMEZ and unaware of the tax incentives available to Zone businesses. Our community partners assist us to deliver the tax incentive message enabling smaller merchants to benefit from the program. They provide a unique service helping UMEZ to further better serve the community.
An integral part of the Bronx Empowerment Zone is the utilization of Bronx at Work program and the array of complementary city and state tax benefits available to employers as a powerful incentive to hire from the zone. A glossy brochure has been produced that graphically illustrates the economic advantages of using the existing incentives, including the wage tax credits, and how we can help by connecting BEZ job applicants with companies looking for employees. The brochure has been mailed to every company in the Bronx Empowerment Zone.
Through the Bronx at Work website and BOEDC's affiliatation to the Bronx Workforce One Center we are now better positioned to identified EZ residents and provide EZ businesses with employees based on their skill set request. Residents that lack the skills required by employers can also be provided basic life skills and additional specialized training through the Bx WF1 office, thus aiding both the EZ business and residents in their employment needs. The tax incentive are even more enhanced if the employee qualifies as a Welfare to Work candidate. Tax credits range from $3,500 in year 1 to $5,000 in year 2 per new hire.
BEZ has also assisted businesses in the EZ take advantage of NYS Empire Zone tax credits, as a result of their being certified by NYS Empire Development Corporation. Combined with the EZ tax credits companies may qualify for up to $4,500,per EZ resident,in tax credits towards their Federal and State tax obligations.
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| Other Accomplishments |
In fiscal year 2005, UMEZ actively engaged developers of East River Plaza, a 480,000 square foot retail center with 64,000 square feet parking facility. Once completed, it will represent the largest investment in the organization's history. This anchor investment is expected to create up to 1,200 full time jobs for the local community.
In line with the Strategic Vision for Change, UMEZ contracted the service of the Initiative for a Competitive Inner City (ICIC), a national nonprofit and international authority on strategy and competitiveness. ICIC will assist in evaluating ways to strengthen the competitiveness of the cultural business and create linkages with the regional and national economy.
UMEZ experienced a seamless transition of leadership at the Chairman position. In March 2005, UMEZ’s Chairman Johnnie L. Cochran Jr. passed away. He was succeeded by the election of Mario L. Baeza. Mario, an experienced and accomplished investor, brings depth, vision and integrity to the Chairman’s position. He will continue to lead UMEZ on its mission serving the Upper Manhattan community.
In March 2004 Related Companies, a nationally recognized developer, became the leaseholder of Bronx Terminal Market in the Bronx EZ and announced they would be developing a 1 million square foot shopping mall at the site. Since then BEZ staff have been assisting the displaced business owners in their relocation efforts by informing them of real estate/leasing opportunities, possible EZ funding (if relocating within the EZ) and assisting them with identifying other incentives offered by City and State agencies.
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