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98–750 2016

FIELD HEARING IN NEW YORK: THE EMPIRE 

(STATE) STRIKES BACK: CREATING 21ST 

CENTURY MANUFACTURING OPPORTUNITIES IN 

NEW YORK CITY 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

FEBRUARY 22, 2016 

Small Business Committee Document Number 114–044 

Available via the GPO Website: www.fdsys.gov 

SBREP-219 with DISTILLER


Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

STEVE CHABOT, Ohio, Chairman 

STEVE KING, Iowa 

BLAINE LUETKEMEYER, Missouri 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

CHRIS GIBSON, New York 

DAVE BRAT, Virginia 

AUMUA AMATA COLEMAN RADEWAGEN, American Samoa 

STEVE KNIGHT, California 

CARLOS CURBELO, Florida 

MIKE BOST, Illinois 

CRESENT HARDY, Nevada 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

YVETTE CLARK, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRENDA LAWRENCE, Michigan 

ALMA ADAMS, North Carolina 

SETH MOULTON, Massachusetts 

MARK TAKAI, Hawaii 

KEVIN FITZPATRICK, Staff Director 

EMILY MURPHY, Deputy Staff Director for Policy 

JAN OLIVER, Deputy Staff Director for Operation 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 

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(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Steve Chabot ................................................................................................... 1 

Hon. Nydia Vela ́zquez ............................................................................................. 2 

WITNESSES 

Mr. Adam Friedman, Director, Pratt Center for Community Development, 

Brooklyn, NY ........................................................................................................ 7 

Ms. Bob Bland, CEO & Founder, MANUFACTURE NY, Brooklyn, NY ............ 10 

Mr. Michael DiMarino, Owner, Linda Tool, Brooklyn, NY .................................. 11 

Ms. Nekisia Davis, Founder and Owner, Early Bird Foods & Co., LLC, Brooklyn, NY .................................................................................................................. 13 

Mr. Edward Jacobs, FXE Industries, Brooklyn Navy Yard, Brooklyn, NY ........ 15 

APPENDIX 

Prepared Statements: 

Mr. Adam Friedman, Director, Pratt Center for Community Development, 

Brooklyn, NY ................................................................................................. 30 

Ms. Bob Bland, CEO & Founder, MANUFACTURE NY, Brooklyn, NY ..... 41 

Mr. Michael DiMarino, Owner, Linda Tool, Brooklyn, NY ........................... 45 

Ms. Nekisia Davis, Founder and Owner, Early Bird Foods & Co., LLC, 

Brooklyn, NY ................................................................................................. 47 

Mr. Edward Jacobs, FXE Industries, Brooklyn Navy Yard, Brooklyn, 

NY .................................................................................................................. 51 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

‘Made in NY’ Expansion to Fashion Industry Testimony ............................. 53 

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(1) 

THE EMPIRE (STATE) STRIKES BACK: 

CREATING 21ST CENTURY MANUFACTURING 

OPPORTUNITIES IN NEW YORK CITY. 

MONDAY, FEBRUARY 22, 2016 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 10:00 a.m., at City Hall, 

New York City Council Chambers, New York, New York, Hon. 

Steve Chabot [chairman of the Committee] presiding. 

Present: Representatives Chabot, Vela ́zquez, and Clarke. 

Also present: Representative Meeks 

Chairman CHABOT. The Committee will come to order. Good 

morning. I am Congressman Steve Chabot. I am the chairman of 

the House Small Business Committee. We want to thank you all 

for being with us here today as we discuss manufacturing here in 

New York City. 

Before we get started, I sincerely want to thank our ranking 

member, Nydia Vela ́zquez, for inviting me to her district to do this 

field hearing. The two of us have a very unusual relationship that 

is not seen very often in Washington, D.C. We actually get along 

and conduct our Committee business in a bipartisan fashion. Time 

and time again I have been impressed with the tenacity, she has 

for defending and supporting small businesses, and the commitment she has to fighting for the people of her congressional district. 

As she has said many times, helping our small businesses grow is 

not a partisan issue, and we strive to work together in that regard. 

I also want to thank our colleague, Greg Meeks, for being here. 

We have been on the Foreign Affairs Committee a number of years 

together, and have worked very well. And he has that same attitude also that rather than worrying about the politics of things, he 

wants to get the job done. And he works extremely hard. We are 

not the same party, so I am telling you as somebody who has seen 

these people operate in action, and they do really a great job for 

their districts. So I want to commend them for that. 

We will be joined shortly by Congresswoman Yvette Clarke, and 

she has that same sort of relationship also in working very hard 

for her constituents. So I want to thank all of them for their work 

and the work that we don the Small Business Committee together. 

My visit is actually a bit overdue. Back in 2007, Nydia was kind 

of enough to come and conduct a hearing in my district, which is 

in Cincinnati, the City of Cincinnati, Ohio. That is right. She was 

the chairman of this Committee at that time, and I was the rankSBREP-219 with DISTILLER

2 

ing member. If your party is in the majority, which Republicans 

are right now in the House of Representatives, the chairman of the 

committees or chairwoman of the committees are Republicans, and 

the ranking member is the lead Democrat on the committee. And 

if the Democrats are in the majority, which they have been, I was 

the ranking member, and she was the chair. I like it better the way 

it is now obviously. 

[Laughter.] 

But it all—— 

Ms. VELA ́ ZQUEZ. Do not get too confident. 

Chairman CHABOT. Do not get confident, that is very true. 

Well, I am very glad to be able to come to Nydia’s district to talk 

about manufacturing here in New York City. While people often 

envision manufacturers as giant corporations with huge production 

facilities, the truth is that the vast majority of manufacturing is 

done by small businesses, by small manufacturers. In fact, 99 percent of all manufacturers are considered by definition small. Generally, below 500 employees is considered in this country as small 

business, which can be a fairly large entity. 

While they might be small businesses, their effect on our economy is enormous. Manufacturers employ over 12 million people all 

across the country and directly contribute over $2 trillion to our 

economy each year. We cannot underestimate its indirect influence 

either. Every dollar spent on manufacturing in America adds $1.37 

to the economy. A single manufacturing job can lead to the creation 

of three to five more jobs in other industries. Without a doubt, 

manufacturing plays a critical role in America’s economic 

wellbeing. 

Manufacturers are increasingly participating in international 

trade as well. Over the past 25 years, U.S. manufactured goods exports more than quadrupled. In 1990, for example, manufacturers 

in the United States exported $330 billion in goods. By 2000, that 

number had more than doubled to over $700 billion in goods, and 

in 2014 it reached an all-time for the 5th consecutive year of $1.4 

trillion in goods, despite slowing global growth. 

But we can do better. A topic our Committee has examined extensively is the cost of Federal regulation and how that cost is 

borne by various segments of the economy. Research has found 

that manufacturers pay over $19,000 per employee per year on average to comply with Federal regulations, or nearly double the 

$10,000 per employee per year borne by firms as a whole. Small 

businesses pay a much higher percentage of their revenues in the 

cost of regulations than do larger companies. In addition, small 

manufacturers, those with fewer than 50 employees, spend two and 

a half times the amount of large manufacturers. We must work together to eliminate unnecessary and burdensome regulations to 

help unleash the full capacity of the manufacturing engine. 

Another challenge going forward is maintaining a skilled workforce. The products we build, the way we build them, and the skills 

required to do so are different than in generations past. According 

to the National Association of Manufacturers, over the next decade 

nearly three and a half million manufacturing jobs will likely be 

needed, and two million are expected to go unfilled due to a skills 

gap. We need to enact education policies that prioritize these new 

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3 

trades and make skills training more widespread, more accessible, 

and more affordable. 

Given the importance of manufacturing to our economy, I am delighted to be here with all of you today with my colleagues here in 

Congress, and I am looking forward to hearing all the witnesses’ 

testimony here this morning. And I would now like to yield to Ms. 

Vela ́zquez for her opening remarks. 

Ms. VELA ́ ZQUEZ. Good morning. Thank you, Mr. Chairman, 

and really I welcome you to New York City. I want to take this opportunity to thank you for holding this hearing here in New York, 

and also recognize Joe Hartz, who has been very accommodating. 

I really appreciate it. My colleague, Gregory Meeks, thank you for 

being here, too. Mr. Chairman you have always been a very strong 

voice for manufacturers, not just in the Midwest or your state of 

Ohio, but around the country. I am glad we are getting an opportunity to showcase before you some of the leaders in the New York 

business community. 

What the chairman related to you before is completely true. My 

mantra is that when it comes to small business, there is no Republican or Democratic approach. What we need is to make sure that 

we develop the kind of public policy that will enable small businesses to do what you do best, and that is creating good jobs. 

Across the nation we have seen a manufacturing resurgence. Following years of decline, in the last 7 years, U.S. manufacturers 

added 856,000 workers to their payrolls. Just last month, 29,000 

manufacturing jobs were created, the largest month-to-month gain 

since November of 2014. These are positive developments. With almost one-eighth of our economy rooted in manufacturing, strengthening this sector is vital to our country’s overall economic health, 

and to job growth for working families and the middle class. 

While New York City is often thought of as the financial and 

media capital, there is also a rich manufacturing history, and we 

are seeing growth in this area. In New York’s 7th District, and 

neighborhoods next to it, we have seen some of the greatest manufacturing innovation. The Brooklyn Navy Yard has become a vibrant manufacturing and commercial hub. Today more than 7,000 

people employed in 330 companies, work out of the Navy Yard. 

Creative reuse of this space has become a model for similar projects 

around the country. 

A support city with deep ties to shipping, our manufacturers are 

well positioned to export products abroad. New York manufacturers 

sell almost $70 billion worth of goods overseas, and 94 percent of 

these exporting firms are small businesses. With exports driving 

much of manufacturing growth, New York firms stand to benefit 

given their proximity to such an active port system. 

Although this renaissance is promising for our city and the nation as a whole, there remain challenges that are preventing this 

sector from reaching its full potential. Here in New York, some of 

these hurdles are unique to an urban area. Other issues are sectorwide regardless of geography. 

Connecting workers with employers and addressing small manufacturers’ employment needs is a longstanding challenging. Many 

of Brooklyn’s neighborhoods are walk to work communities. To the 

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extent small manufacturers hire locally, we can strengthen local 

economies while generating opportunity for low-income workers. 

On a broader scale, we must ensure we are adequately investing 

in human resources. Greater federal investment in science, technology, engineering, math education will enhance domestic manufacturing. Local and private sector apprenticeship programs can 

prepare young people for careers in rapid growth areas. I would 

like to hear your thoughts and insights on these aspects, on these 

issues. 

Transportation and rental costs remain an ongoing challenge for 

all manufacturers, but especially New York based. In the outer boroughs, industrial rents have climbed 10 percent in a single year. 

Similarly, transporting goods produced in a congested, urban market is always more expensive than in rural areas, one reason I 

have pushed legislation aimed at modernizing our freight system. 

For manufacturers everywhere, access to capital is a persistent 

problem. This is especially true for smaller startup firms that are 

on the cusp of fast growth. For this reason, I introduced the ScaleUp Manufacturing Investment Company Act. This legislation will 

expand investment opportunities for small and emerging manufacturers, and I hope to hear our witnesses’ perspective on it today. 

All of these and other challenges point to a need for a concerted 

effort at the federal, state, and city level. In recent years, House 

Democrats have united behind the Make it in America agenda, a 

series of proposals to strengthen and expand our manufacturing 

base. Locally, New York City has a 10-point plan aimed at bolstering our industrial infrastructure and better train workers. 

I would like to see a more holistic, cohesive approach in terms 

of the federal, state, and city governments. Each one of them has 

programs, and have come up with public policy, but how can we 

work together to strengthen what each level of government is doing 

in a way that makes sense to the businesses that are on the 

ground? 

These efforts are important, but they can only succeed if they are 

guided by insight from the actual businesses here on the ground 

that are fueling our city’s manufacturing renaissance. That is what 

makes today’s hearing so valuable. As such, I would like to thank 

all of the witnesses for participating today. And, again, I thank the 

chairman for holding this field hearing. 

I yield back. 

Chairman CHABOT. Thank you very much for your opening 

statement. We appreciate that very much. 

I would now like to recognize the gentleman, Mr. Meeks, for the 

purpose of making an opening statement if he would like to do so. 

Mr. MEEKS. Thank you, Mr. Chairman, and I want to thank 

you, Chairman Chabot and Ranking Member Vela ́zquez, for your 

thoughtfulness and for your leadership in bringing this hearing to 

New York City. It is indeed tremendously important that we look 

and listen to our small business folks because that is the essence 

of job creation in America, and it is what makes communities 

strong. If you go by a community and you do not see thriving small 

businesses moving forward, you see a community that is suffering, 

that is looking and yearning for jobs. 

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5 

So I want to thank the witnesses and recognize the panelists, 

and the distinguished entrepreneurs, and the leaders of our community who we will hear from today. And as a member of the Financial Services Committee, which I serve on with Ranking Member Vela ́zquez, and, as the chairman indicated, on the Foreign Affairs Committee, you know, small business is ripe, and the appropriate Committee to determine how we enhance manufacturing. 

When you look at New York City and our communities, many of 

our small business are still recovering from the economic crises of 

2008 and 2009, combined with the destruction of Hurricane Irene 

and Hurricane Sandy. In the 5th Congressional District, businesses 

like Madelaine Chocolates and Atlantic Steel faced a 1-2-3 combination that could have been a deathblow to manufacturing in 

Queens and in our great city. 

But our incredible businesswomen and men, community development financial institutions like the Disability Opportunity Fund, 

and economic zones, including the industrial business zones in Jamaica and around our Nation’s most traveled international airport, 

John F. Kennedy Airport, have provided our region’s most skilled 

entrepreneurs an opportunity to compete on the world stage. To 

me, that is vital. 

If we have a level playing field, our small businesses can compete 

with anybody, any place on this planet. We have the best minds 

and the best workers, and all we need is to make sure that the 

playing field is level. Let us be reminded that New York has the 

3rd large economy in the United States trailing only Texas and 

California. New York’s economy is the 15th largest in the world 

ahead of countries like the Netherlands and home of Europe’s largest cargo port, and just behind one of our largest trading partners, 

South Korea. 

So to get ahead, we need to address the cost of drag on our local 

businesses preventing them from expanding in scale and diversifying the scope of their products and services. Many of the most 

significant impediments that manufacturers in Queens and across 

the city face are the growing costs of overseas transportation, and 

a shortage of high-skilled workers, and the shift of budget priorities 

in Washington that reduced investment in research and development and other incentives that are critical to growing a manufacturing base. 

Now more than ever, manufacturers face stiffening competition 

from global competitors. Without policies to buttress the tremendous growth that manufacturing is experiencing in New York City 

and other places, our city may find itself slipping in its ability to 

provide well-paying competitive jobs. I would remiss if I failed to 

mention the substantial and important role, when I look at small 

businesses, I think it is tremendously important to make sure that 

women and minority-owned businesses are there because they can 

contribute positively to the competitiveness in this global economy. 

Throw something out real quick, for instance, the number of 

businesses owned by African-American women grew 322 percent 

since 1997, making African-American females the fastest-growing 

group of entrepreneurs in the United States of America. We have 

to make sure that we continue to focus on that. 

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6 

As the ranking member has said, I am a firm believer of making 

it in America and selling it every place else. When we look at our 

policies, and whether it is our trade policy, et cetera, we have got 

to make sure that we are opening up markets abroad because some 

of the markets abroad have been closed to United States’ products. 

Our trade agreements, et cetera, should be opening up these markets so that we can get our small businesses into these markets so 

that you can grow your businesses here at home and make sure 

that there are opportunities there to create jobs for people right 

here. 

We need to get the message out clearly that outsourcing is not 

what you do when you are shipping your goods and your services, 

your manufactured goods overseas. That is not outsourcing. That 

is creating jobs here in America. That is what I think that you do 

and you are looking forwarding to doing. I want to know what we 

can do to make sure that you are successful. 

I thank you again for being here, and I thank the chairman and 

the ranking member for their wisdom to hold this hearing in the 

city that is so great, they had to name it twice—New York, New 

York. And I yield back. 

Chairman CHABOT. Thank you. The gentleman yields back. I 

appreciate your opening statement. And very briefly, I will explain 

the timing system here. We operate under what is called the 5- 

minute rule. It is pretty straightforward. It means that each member of the panel, and there are five of them, get to testify for 5 minutes. We actually have a light up on the clock to let them know 

what is going on, and we would ask you to stay within that as 

much as possible. We will give you a little leeway, but not much. 

We hope you stay within that rule. We limit ourselves to 5 minutes 

in asking questions when you are all finished. 

I would now like to yield to the ranking member, Ms. Vela ́zquez, 

for the purpose of introducing our very distinguished panel of experts here this morning. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. I would like to 

first open the witness panel by introducing Mr. Adam Friedman. 

He is the third executive director of the Pratt Center for Community Development, and the founding director of the New York Industrial Retention Network where he led efforts to strengthen the 

city’s manufacturing sector and promote sustainable development. 

He is one of New York City’s leading advocates in support of manufacturing and employment opportunities it brings. 

Then I would like to also introduce Ms. Bob Bland, a Brooklynbased fashion designer, entrepreneur, and community organizer. 

She is the CEO and founder of MANUFACTURE New York, a 

fashion incubator and factory dedicated to providing independent 

designers with the resources they need to streamline production 

and transform local manufacturing. 

She will be followed by Mr. Michael DiMarino, president of Linda 

Tool, a second generation family business that manufacturers precision machine components and assemblies. Linda Tool’s state-ofthe-art manufacturing facility is located in the historic Red Hook 

neighborhood, part of my district in Brooklyn, New York. Mr. 

DiMarino has participated in the launch of Goldman Sachs 10,000 

Small Business Program, as well as the UBS Mentorship Program. 

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Socially committed to the restoration of the community, Linda Tool 

is also participating in a number of green initiatives designed to 

promote a healthy, sustainable, and safe working environment for 

its employees. 

He will be followed by Ms. Nekisia Davis, founder and owner of 

Early Bird Foods, which makes small batch granola and other 

foods by hand. Prior to starting this business, Ms. Davis managed 

a famous local pizzeria and sold her granola at local markets, including the Brooklyn Flea Market. Now, they are located in Brooklyn’s own Red Hook neighborhood. 

She will be followed by Mr. Edward Jacobs, co-founder and CTO 

of FXE Industries. His startup company is based in the historic 

Brooklyn Navy Yard and focuses on advanced motorcycle design, 

engineering, and manufacturing. With over 10 years of experience, 

Mr. Jacobs uses an innovative approach to manufacturing that offers greater accessibly to customers. 

And with that, Mr. Friedman, welcome. 

STATEMENTS OF ADAM FRIEDMAN, DIRECTOR, PRATT CENTER FOR COMMUNITY DEVELOPMENT, BROOKLYN, NEW 

YORK; BOB BLAND, CEO AND FOUNDER, MANUFACTURE NY, 

BROOKLYN, NEW YORK; MICHAEL DIMARINO, OWNER, LINDA 

TOOL, BROOKLYN, NEW YORK; NEKISIA DAVIS, FOUNDER 

AND OWNER, EARLY BIRD FOODS & CO., LLC, BROOKLYN, 

NEW YORK; AND EDWARDS JACOBS, FXE INDUSTRIES, 

BROOKLYN NAVY YARD, BROOKLYN, NEW YORK 

STATEMENT OF ADAM FRIEDMAN 

Chairman CHABOT. You are recognized for 5 minutes. Thank 

you very much. 

Mr. FRIEDMAN. I appreciate your efforts to reach out to the 

manufacturing community in New York. I thank you on behalf of 

every member, every participant on this panel. 

I am the director of the Pratt Center for Community Development, which provides research, and urban planning, and economic 

development services in low-income communities and to small businesses through the city. I am also the chair of the Urban Manufacturing Alliance, which is a network of about 350 economic development practitioners in 100 cities across the country, all committed 

to sharing research, to collaborating and program development, 

and to try and articulate the urban perspective in the debate 

around economic development policy, particularly industrial development. 

I hope you all have the Power Point presentation, so let’s s just 

go to the first pie chart, which is on page 2, and this kind of says 

why we do it. It’s because of the jobs that manufacturing brings. 

I’m sorry, it’s at page 1 for you all, and it’s that pie chart. What 

it shows is manufacturing is still the best way to get a decent, wellpaying job, particularly for people who have limited levels of educational attainment. 

Chairman CHABOT. Excuse me, Mr. Friedman. You may want 

to pull the microphone a little closer to your mouth just to make 

that folks all over the room can hear you, too. Thank you. 

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8 

Mr. FRIEDMAN. Okay, thank you. So the top of the second page 

you have this chart, and this really picks up on something that the 

chair said earlier. Urban manufacturing is small business, but 

large job numbers. In New York City, for example, the average 

manufacturer employs only 15 people. 

Let’s go to the bottom of that page, the urban manufacturing 

challenges. Sometimes I’ll be meeting with a manufacturer, and I 

feel like saying to him something like, run, save yourself, you 

know? This is a crazy place to do business. Your neighborhood can 

be rezoned at any point. You have crumbling infrastructure and 

tremendous conflict for land. Third, even if your neighborhood is 

not rezoned, it could be converted to a vintage clothing store. 

There’s tremendous pressure on manufacturers in New York City. 

At the beginning Congresswoman Vela ́zquez said there are normal anxieties that manufacturers face, and there are these problems that are kind of unique to urban areas, and they should have 

an influence on the program design that we’ll talk about later. 

If we go to the next slide about the rebirth of urban manufacturing, this is how it’s done. You know, we have lost the large companies like Farberware that made pots and pans and Swingline 

that made staplers because they were large commodity products. 

They didn’t have a real reason for being in a city, let alone New 

York City. But what’s left here are the high value added producers 

that have a reason for being here because of proximity to market, 

proximity to the design talent, to a highly skilled workforce. On today’s panel I think we have some great examples of how the competitive advantages of a city can really work for a manufacturer. 

Let’s look at some of the advantages that we have, the next one 

on high-tech manufacturing. I want to say at the outset technology 

is not the only way to create high value in a product. But high-tech 

advanced manufacturing is overwhelmingly concentrated in urban 

areas around the country. This is data gathered by Brookings Institute, and 95 percent of all the advanced manufacturing in the 

United States is in urban areas. 

The second reason for the rebirth of urban manufacturing is cities are the centers of innovation. This is the graphic with the map 

of the United States. It’s number 7 I think. So in addition to technology, design is often critical, and cities are where the universities 

are. For example, in New York City, New York Schools each year 

award 4,000 degrees in design and architecture. That is a tremendous economic engine. In addition, universities are increasingly the 

launch pad for entrepreneurs. At University of Cincinnati, first 

batch graduates of a design department apply to be in this incubator, and not only are they launched, but they are hooked up with 

local manufacturers so that the jobs that are created are created 

locally. 

The last slide on the rebirth of urban manufacturing, 8, which 

is changes in technology benefit cities. It’s not only that we have 

new micro technology, like 3D printers and CNC equipment which 

is shrinking factories, it’s also how that technology is organized. 

We have co-location, co-working spaces which Bob Bland can talk 

about because that’s what MANUFACTURE New York is. 

In addition, we’re seeing a growing amount of space sharing and 

operations like Tech Shop, which is kind of a gym model, which for 

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about hundred dollars a month, you go in and you can have access 

to equipment in a factory. The barriers to starting up are far less 

than ever used to be. 

Thank you. Slide 9, the emergence of micro manufacturing, this 

is the result. We have manufacturers that employ one people, two 

people, and that’s what growing in the United States. The congresswoman mentioned the Brooklyn Navy as a great launch pad 

for companies, and we’ll hear more about that today. The secret to 

their success is that they’re a nonprofit, and because they’re mission driven and because they’re not going to convert their space to 

a different type of use, companies have the security to invest, to 

train their workers, to build a network, to build relationships with 

the surrounding community. 

This is not unique to New York. This a national movement. It’s 

true in San Francisco. It’s true in Indianapolis. It’s rising up across 

the country. 

Let me go to the last slide on Federal policy. There’s a need to 

sort of retool the traditional Federal policies and programming 

that’s been used to support manufacturing. So start with, for example, new market tax credits, it’s increasingly difficult to use in 

urban because of the restrictions on eligibility for certain census 

tracts. You get one market rate housing project in a census tract, 

bam, you know. The entire census tract is ineligible. Arguably, 

these are exactly the locations where manufacturing should be taking root to prevent gentrification. 

Second, industrial development bonds. The caps haven’t been 

raised in years, and that money just does not go very far in urban 

areas. Really what’s needed is a scan across Federal programming 

to weed out sort of the provisions that are kind of obsolete and that 

work against urban manufacturing. 

Two final points. I have met with easily a thousand manufacturers over the past 20, 30-odd years, and I’ve been on a thousand 

shop floors. I can count on one hand the time a manufacturer has 

said to me cut taxes and I’ll create jobs. Not the issue. At least not 

the issue for high value added manufacturing. They’re concerned 

about infrastructure. They’re concerned about education as the 

chair said at the beginning. They’re concerned about getting their 

product to market. It’s return on investment that’s important, not 

just simply cutting costs. 

The last point I wanted to make, because it’s kind of counterintuitive, has to do with if you want an entrepreneurial society, you 

have to provide healthcare. I’m on an advisory board for Etsy, and 

I was at a meeting a couple of months ago, and the subject came 

up. So here’s an entire massive organization devoted to launching 

new businesses. How can you launch a new business? How can you 

put your family at risk by walking away from a company that provides healthcare and start your own enterprise? So we’ve got to figure out some way to make healthcare more accessible, even beyond 

what it is today. Make it universal if you really want to have an 

entrepreneurial society. 

Thank you. 

Chairman CHABOT. Thank you very much. The one thing I did 

not note, there is a little doorbell like sound that goes off at the 

end of the 5 minutes, so just so you know. 

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Ms. Bland, you are recognized for 5 minutes. 

STATEMENT OF BOB BLAND 

Ms. BLAND. Thank you, Chairman Chabot, Ranking Member 

Ms. Vela ́zquez, and members of this Committee for the opportunity 

to testify. Thanks also to our local representatives for your tireless 

commitment to retaining equitable opportunities for working and 

middle class New Yorkers and their families. 

My name is Bob Bland, and I’m the CEO and founder of MANUFACTURE New York. I created MANUFACTURE New York in 

2012 to rethink the fashion ecosystem and create a new vertically 

integrated 21st century business model that serves the industry’s 

domestic urban manufacturing needs of today and the future. Our 

mission is to reawaken and rebuild America’s fashion industry, foster the next wave of businesses, and create a transparent, sustainable global supply chain. 

In the past 3 and a half years, we have grown our community 

to over 10,000 American designers, manufacturers, technologists, 

and proponents of domestic production, helped 150 small businesses here in New York City to successfully launch or reshore 

their apparel lines, and piloted incubator programs for startups in 

fashion and contracting manufacturing, and accelerated programs 

for wearable tech startups, thanks in part to the generous support 

of the SBA Growth Accelerator Fund, which is a great example of 

a program to help not just small business, but incubator and accelerator programs themselves because they’re usually small businesses, and they need help starting up, too. 

Since the recession, virtually all small creative and manufacturing businesses in New York City have had the exact same challenges. It was stunning for me at the beginning as a designer finding out that my contract manufacturers had the exact same problems that I did, access to affordable industrial space. Long-term 

leases, major problem. Relocation grants and construction loans are 

very hard to come by when you are displaced. 

Access to affordable housing is increasingly becoming impossible 

here in New York City, especially within a reasonable commutable 

distance. For instance, we have 40 percent of our apparel manufacturing workforce here in New York City in the Flushing area of 

Queens, and getting them down to South Brooklyn, how in the 

world do you do that? We have major transportation problems. 

There’s very low access to working capital that’s affordable, and 

also lines of credit to grow our small businesses, and that’s still a 

huge, major problem. Access to competitive equipment procurement 

and training programs that are sector specific so that we can adapt 

to our rapidly-changing industry, are very necessary. They need to 

also be nationalized in a way that can result in certifications so 

that people can understand across States and across cities. 

Fashion design and manufacturing jobs are more than just jobs. 

They’re inclusive pathways to careers and potential business ownership themselves regardless of educational background or socioeconomic statutes. Typically they pay on average apparel manufacturing $59,750 a year, which is a good job, and they’re likely to include benefits and a clear path for growth. Also, skills training is 

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typically included, and opportunities to advance in management 

positions and beyond. 

The New York City fashion ecosystem is unique in that historically New York’s iconic garment district in 1931 was the largest 

garment district in the world. I’d like to say it’s the original fashion 

incubator, and the original incubator program. It was because of 

the co-location and the proximity of all of the different parts of the 

supply chain together. It employed 1 million people at its height 

here in New York City. While it is contracted now to 15,000 apparel manufacturers total for the entire city as of this year, that 

still accounts for 30 percent of manufacturers in New York City. 

It’s still a very huge sector when it comes to manufacturing. Every 

single one of those jobs are important. 

We have several opportunities coming up at the intersection of 

fashion sustainability and technology if we seize the moment for 

urban manufacturing here in New York. There’s already 900 fashion companies headquartered here in New York City that employ 

180,000 people and generate over $11 billion in wages and $2 billion taxes per year, so it’s a big business. The industry at large is 

a $4 trillion global business, but we’re also the number two polluter 

in the world right behind oil, which is shocking to most people. 

From the smallest emerging design startups that are MANUFACTURE New York to the largest department stores and conglomerates, everyone is looking for a solution that includes 

conceptualization, research and development, commercialization, 

and a shared set of resources and best practices to capture value 

and provide accountability at all stages of the supply chain. That’s 

an area that New York City could really take hold, and then connect with other urban manufacturing centers all throughout the 

United States. 

I’d like to say that the best example I’ve seen of that so far, Representative Ms. Vela ́zquez, you were saying, is that we’re now part 

of one of the Manufacturing Innovation Institutes. That is an 

Obama Administration initiative to create these advanced manufacturing institutes. The one that we’re in is the Revolutionary Textile and Fibers Manufacturing Institute. 

And I would like to say that that program—I’d love to give you 

more information about it—really needs to be expanded to other 

urban centers because it’s a way for us to bring all the stakeholders to the table, all the national educational institutions, all of 

the state organizations, workforce training, and then to create this 

network nationally for a specific sector, in this case, the next generation of textiles and fibers. 

So thank you very much. 

Chairman CHABOT. Thank you very much. I appreciate it. 

Mr. DiMarino, you are recognized for 5 minutes. 

STATEMENT OF MICHAEL DiMARINO 

Mr. DIMARINO. Good morning, and thank you all for inviting 

me to testify before this Committee. I’m Mike DiMarino, president 

of Linda Tool. We’re a second-generation family-owned manufacturer of precision machine components and assemblies located in 

Brooklyn, New York. Linda Tool has been located in Brooklyn since 

its inception in 1952. 

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Manufacturing in New York has always been so much of a challenge as it has been a blessing. New York has always enjoyed a 

rich history of manufacturing and cutting-edge technology. I’ll give 

you a few examples. 

Most people don’t realize that New York is the proud home of the 

Coleman gas lamp mantle which was invented on Canal Street in 

New York City. The company today, Navis Global, is still a major 

customer of Linda Tool and has been since 1964. 

It now produces high-tech cloth processing equipment, and Linda 

Tool makes components that no other company has ever made 

New York is also home to the largest manufacturer of window 

envelope machinery in the world, F.L. Smithe, located on West 

44th through West 48th Street and West Street in Manhattan. 

This was a cutting technology in its day. The Bahama Hinge Company, which probably most of the doors in this room have on them, 

was also located in Brooklyn, and AMF, the maker of bowling alley 

equipment, was located in Brooklyn, and now houses Lutheran 

Medical Center. Mergenthaler Linotype, Correcto-Type, even ExLax belongs in New York City. These are all companies with cutting-edge technology in their heyday. 

As it was in 1950, 2016 New York City is still a great place to 

manufacturer and has so much to offer. New York now boasts a robust 3D printer industry, a rapidly-growing drone manufacturing 

sector, and cutting-edge technology in recycling and biofuel. Honeybee Robotics of Manhattan was instrumental in development of 

the Mars Land Rover. This is all made possible by the opportunities that New York has to offer. 

Most recently, New York City Schools have placed an emphasis 

on the development of manufacturing skills. Linda Tool recently 

hired two graduates from City Tech who went through their manufacturing engineering curriculum. These two new employees have 

the skills necessary to help Linda Tool move forward in the next 

phase of manufacturing. Their skills acquired in school, coupled 

with Linda Tool’s old world training, is already paying off with 

some great advanced technology capabilities. 

The schools are on the right track, but need more hands-on training in this curriculum as this would make graduates much more 

job ready. I personally would love to see an apprenticeship program 

for the manufacturing sector in place in the future. 

The challenges are many. They are difficult, but you can understand some of it. Trying to marry urban life with industrial production is a challenge for anybody or any city that tries to do it. The 

New York City industrial business zones are one aspect that helps 

those of us trying to maintain a viable manufacturing business in 

New York. 

One of the main challenges going forward is the loss of commercial industrial property. Gentrification is probably the biggest obstacle. As commercial and industrial areas are rezoned, it drives 

the price of real estate to such levels that economics just fail in trying to maintain a business. The preservation of the IBZs will greatly help with this, but they must be maintained. 

The ability to move in this sector of technology can only have 

good benefits for all. Linda Tool itself was once an old world smoky, 

poorly lit, hazardous place to be employed. Today it is a modern, 

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air-conditioned, well-lit, well-equipped manufacturing facility that 

boasts an employment stay of 15 years. We’re also one of the few, 

if not the only, manufacturer in New York City that boasts a green 

roof on the entire roof of its facility. 

We also have a wage scale that meets or exceeds our industry, 

and personally it is very satisfying to see employees of the company 

thrive. The higher wage scale is because of our ability to introduce 

more advanced technology into our business. This may not result 

in the head counts of yesteryear, but it most certainly lends itself 

to a higher-paying job for those that acquire the skills to do so. 

Looking back, New York has always been a technology leader in 

many aspects. Obviously the technology has changed drastically, 

and many today have no idea of some of the things that were previously mentioned in this testimony. Regardless, New York was always a leader in advanced technology whatever the era. Looking to 

the future, I believe there is a bright spot for us in the manufacturing sector as long as preserve our industrial zones and concentrate on educating and training our youth, providing them with 

hands-on learning and what to expect in the working world. A good 

part of that is the work that our local development organizations 

are doing, coupled with the work that the Federal and local government is contributing. 

Chairman CHABOT. Thank you very much. 

Ms. Davis, you are recognized for 5 minutes. 

STATEMENT OF NEKISIA DAVIS 

Ms. DAVIS. Good morning, Chairman Chabot, Ranking Member 

Vela ́zquez, and also Congressman Meeks. I am honored to be here 

today to testify. 

My name is Nekisia Davis. I’m the owner of Early Bird Foods in 

Red Hook, Brooklyn. We’re a very small manufacturer of granola 

and granola bars. As Ranking Member Vela ́zquez says, I started 

the company when I was managing a restaurant in Brooklyn called 

Franny’s. I brought granola in to co-workers, and there was kind 

of like a small cult that was formed, and it was within a year that 

I was a full-time granola maker. 

To say that I had no idea what I was doing is a giant understatement. I had been fumbling into being a small business owner every 

step of the way. I feel like I’m at a table of people who are so articulate and know exactly what they’re doing, and I am learning 

every day. Every single day I learn how to be a better 

businessperson, and I think I’m definitely not one of few. There are 

a lot of people that are in the same industry as me that are kind 

of doing the same thing. 

We now have six full-time employees, two part-time employees. 

We have many selling channels. We distribute our goods throughout the United States, very soon to China, Japan, the United Kingdom. I sell direct to a lot of stores in the U.S., and then also we 

have pretty good Web site sales. 

I think we tapped into something that was very familiar that we 

approached in a unique way. I developed a palate through working 

at some of the best restaurants in New York that allowed me to 

kind of approach in a new way in how to make it. It’s been very 

successful. Within the first 3 months of my business, I was on the 

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Martha Stewart Show making granola with Martha. I had a writeup in the New York Times, New York Magazine. I was on the shelf 

at Whole Foods—that was my second account—all because of the 

community that I’ve created through working in restaurants and 

food with chefs and wonderful people here in this city. 

At that time, it felt like small food manufacturing in this city 

was in its infancy. It was difficult to find a place to legally produce 

food, and no one really knew what to do or how to do it. You certainly couldn’t make it in your kitchen, and you didn’t really know 

what the other option was. I kind of fumbled around to a couple 

of different office cooperatives. I landed in an incubator kitchen in 

Coney Island where I would have to lug 50-pound bags of oats and 

sunflower seeds into my car, load them into the kitchen, and, 1, 2, 

3, go, bake as hard and fast as I could, package, label, clean, load 

back into my car, bring it back home, and come back and do the 

same thing the next day. It was a very, very challenging time. 

I took out a very small loan from a friend, built out a space in 

2001. It was 900 square feet. I quickly realized within a week it 

had improper electric to run all the equipment I needed, and I was 

there for 4 years doing kind of a gamble, a jump around and forth. 

Two years ago, I was able to take out a business loan. I had been 

in business for 5 years, and I had a bank that believed in me, 

which I was very proud of. We built a warehouse and commercial 

kitchen in Red Hook, and I fear that we’ll outgrow it probably in 

another 2 years, although I have a lease secured for another 8. 

We have had very, very good luck in business. We’ve always been 

a business people love. I was raised in the way of the Danny Meyer 

hospitality. You have to run your business with compassion and 

empathy, and take care of your people first, take care of your customers second. It’s worked very well, and I think that it resonates 

well with people. We have very, very loyal customers because of it. 

Now, in all this sweet hippy granola fest, we have a lot of challenges. The number one challenge for me is workers’ comp insurance. We are in a classification of manufacturing, and I don’t know 

if I share the same issue with people at the table here, but we pay 

3 times the rate of a cook in a restaurant kitchen, and that is a 

very high-risk job. The highest risk that I have in my kitchen is 

someone getting a burn on their arm. It’s just very, very low risk. 

We’re baking oats in an oven, and letting them cool, and putting 

them into a bag. The numbers I pay for workers’ comp are astronomical. There’s no one that I can talk to or convince that these 

rates are not appropriate to the amount of risk that we have. 

Another issue has been with landlord-tenant relations. I feel like 

a landlord to provide a safe place for us to do business, to help facilitate business is just a given. I’ve had a lot of problems with 

landlords not having equipment that’s working properly, and it 

really, really hinders our business. I had a freight elevator in my 

last kitchen go down for 3 weeks with no attempt to get it fixed. 

I had a P.O. that was supposed to go out to Whole Foods. I mean, 

my business was pretty paralyzed for 3 weeks. Thousands and 

thousands of dollars of business was lost. 

When I attempted to negotiate a rent break from the landlord because of the loss in business, not only were we not helped out, but 

we were turned against. We were discriminated against as women, 

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being told that we didn’t know what we were doing because we’re 

women in business. He turned against us, he sued us, doubled our 

rent, and evicted us, and we had no power at all. 

I think the final thing beyond those struggles, obviously getting 

capital to buy bigger, save money, it’s very, very difficult. I acquired capital to build out the kitchen where I am now, and I just 

can’t have access to anymore because I have such a large amount 

that’s borrowed. We have excellent credit. We have excellent annual revenue. We just don’t have access to anything. We are trying 

to keep up and grow at the same time. It’s very a paralyzing feeling. Cash flow is growing smaller by the day. 

I want to thank you again, and say in these moments we have 

to zoom out and remember this is one moment in a long journey. 

To have the collaboration and the care from the three of you is very 

comforting. Again, I’m honored to be here today. 

Chairman CHABOT. Thank you very much. 

Mr. Jacobs, you are recognized for 5 minutes. 

STATEMENT OF EDWARD JACOBS 

Mr. JACOBS. Good morning, Ranking Member Ms. Vela ́zquez, 

Chairman Chabot, and other members of this Committee. 

My name is Edward Jacobs, a Pratt graduate with a focus on industrial design, architecture, and engineering. Most of my adult life 

has been spent living and working within New York City being a 

designer and working initially with smaller-scale products. One 

quickly recognizes the challenges of sourcing manufacturers locally 

while attempting to secure reasonable pricing affordability and access to product. 

I’m honored to be here with you today to talk about attempting 

to navigate the manufacturing community locally in New York 

City, nationally living in other States, and internationally sourcing 

to eventually manufacturers ourselves with FXE Industries. 

FXE is a startup focusing on transportation and, more specifically, advanced motorcycle design and engineering. Our approach 

is a holistic one that bridges the gap typically found between fields 

within the realm of manufacturing. This is a modular approach to 

large-scale manufacturing that allows us to circumvent some of the 

pitfalls of highly-specialized niche employment, and, in turn, allows 

us to train and foster greater technical manufacturing abilities in 

house. This approach will allow us to offer accessibility of product 

so we may open up the market to a significantly greater number 

of customers. 

We’re in the process of securing 50,000 square feet of design, engineering, and manufacturing space. This opportunity to grow to a 

100-plus team has ultimately been afforded to by the Brooklyn 

Navy Yard. I initially became a tenant of Brooklyn Navy Yard 

through New Lab. It’s where I grew my first design and engineering company, DNI. New Lab is a great example of an entity that 

is helping enable a very substantial evolution in specialized manufacturing. 

A good example of this is DNI’s design, engineering, and sourcing 

for the Lowline underground park to be located at the base of the 

Williamsburg Bridge that has many challenges in its initial stages 

to be completed. This is an example of a potential large-scale archiSBREP-219 with DISTILLER

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tectural project with global implications. The entire project has 

been designed, engineered, sourced, and manufactured all in New 

York City. 

The basis of this project being support of plant life and public 

space below the surface of the earth is a great example of the full 

spectrum of manufacturing and tremendous social impact New 

York can foster. This correlates directly with what FXE is attempting. Choosing to operate here in NYC with the sheer density and 

diversity will allow us a fantastic base of talent, younger, older, 

from all fields and walks of life to pull from. Being a new manufacturer and being supported and supporting establishments like the 

Brooklyn Navy Yard makes us very hopeful for the new positive 

city building manufacturing efforts growing within the 21st century 

in NYC. 

I think a lot of the challenges that we’ve had have been finding 

funding outside of private funding. It seems as though a lot of the 

funding or the establishments are treated more the same kind of 

treatment we get from a bank. I think there needs to be development of a different spirit in lending where maybe people can actually view a business plan, make competent decisions so that 

startups, smaller entities can actually get capital to grow. And 

there’s one other educational kind of gap that I see personally because of my background in industrial design and engineering. 

There isn’t an educational element that bridges this foundation gap 

that you’ve seen throughout the years. There’s definitely a rift. 

And so, I think there’s an opportunity there in New York to 

bridge this gap. I think what we have educational kind of institutional wise, bridging the gap between a few of them can really open 

up a whole new industry. 

Thank you very much. I’m totally honored to be here. I really appreciate the time. 

Chairman CHABOT. Thank you very much. I want to thank all 

the members of the panel for their testimony, really excellent testimony from each one. I would now like to turn to the ranking member. I am going to allow her to ask her questions first. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. Ms. Bland, why 

did you choose to locate your facility here in New York City? What 

advantage does your business have over others because of its location? 

Ms. BLAND. Well, we are located in Sunset Park at Liberty View 

Industrial Plaza, which is a development by Sumar Properties. The 

reason we are located there is because Sunset Park is a walk to 

work neighborhood that has many, many people who are already 

familiar with manufacturing. It is primarily a Latino and East 

Asian base, so a lot of these folks already have apparel manufacturing skills. It makes it much easier for us to hire people. 

The reason for New York is because the fashion industry is iconic 

to New York City, and there are already so many skilled people 

also closing the loop in having all the designers, all of the development, and then also the sampling, how they are making all of it 

right in New York makes so much sense for these brands. It is 

starting to make more and sense. For instance, we just picked up 

Calvin Klein as a client. That was not something that we were expecting to happen this soon, because they are starting to pay attenSBREP-219 with DISTILLER

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tion to, oh, we need to do our development closer to home. New 

York City has a really incredible opportunity there. 

For all of our startups, having the access to the major media outlets and having all of the really good press, it very much helps 

startups to get the word out about their new products and their 

new businesses, as well as Silicon Alley, the new fashion tech 

scene, the wearable tech scene. We are not seeing a lot of venture 

capital go into anything besides tech anymore. We have to take advantage of the fact that we are a fashion capital, and make sure 

that there is not a bunch of money being sunk into ugly products 

that do not make sense and do not work for the customer, and that 

no one in fashion has been consulted on them. 

Instead we work with companies and work with VCs to ensure 

that they are employing the local workforce, and that everyone can 

take advantage of this opportunity, and that is going to require a 

lot of STEM training. That is going to require a lot of engineering, 

science, and other training to be combined with commercial manufacturing. We see a next generation of jobs there. 

Ms. VELA ́ ZQUEZ. Thank you. Thank you. I am so proud that we 

worked to prevent that building from being sold—— 

Ms. BLAND. We are so grateful—— 

Ms. VELA ́ ZQUEZ.—and putting it up for auction. 

Ms. BLAND. Thank you for your support. 

Ms. VELA ́ ZQUEZ. Sure. Mr. Jacobs. 

Mr. JACOBS. Yes? 

Ms. VELA ́ ZQUEZ. There is a large and growing gap between 

idea conception and sustainable sales that every manufacturer 

must go through, the valley of death. Bridging that financial gap 

is critical for success, but often funding for companies at this stage 

is difficult to secure because of the inherent risk. Can you describe 

your difficulties in obtaining financing at this stage? 

Mr. JACOBS. Yeah, absolutely. A lot of the challenges have been 

since we do not have a lot of assets to leverage, that, you know, 

borrowing can be very difficult. We have actually tried multiple 

ways to secure financing. Most of it has been from independent private financing, but we also have gone the EB-5 route. But there 

seems to be a large challenge because EB-5 funding seems to focus 

more so on real estate endeavors because of their inherent lower 

risk. And also one of the other panel members mentioned tech investment. It seems that everyone through all of our meetings is always looking for a strictly tech angle, almost looking for a very 

quick return, like a Google or, you know, some type of explosion because of some tech industry thing. 

I do not know if it is because of a lack of understanding about 

some of the basic things in hard product design and manufacturing, but there seems to be, I guess, kind of just a rose-colored 

glasses effect on the tech industry that people are very much looking for a quick return. 

What we are doing is something that we believe, it is more of a 

long-term thing. Any large-scale manufacturing endeavor is not a 

1- or 2-year, you know, quick return things. It is a 10-, 15-year 

thing endeavor. I think sustained growth absolutely, but to find the 

people that are doing it, very difficult. 

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Ms. VELA ́ ZQUEZ. Thank you. Ms. Davis, pretty soon we are 

going to be voting on a trade agreement, and we know that small 

exporters, small businesses are the majority of exporters. Yet if 

they do business with just one country, they will have only one customer in that country. I would like to hear from you, can you discuss your efforts to export your goods, and what challenges you 

have faced in doing business internationally? 

Ms. DAVIS. Well, I think the biggest challenge is to try to get 

it to a place where they can sell it. There are so many costs that 

are involved in shipping. Me saying that we distribute to China, 

this is the first round of going to China. The taxes on goods that 

come in I think is something like 30 percent, and I don’t know 

where that can be minimized, but that is a huge, huge challenge 

is to get the goods, which are already very expensive. My profit 

margins are right where they need to be in order to keep going just 

to try to get pricing. 

When we do work with a distributor, it is really for kind of one 

place, and there does not seem to be a whole lot of expansion possible. I work with one distributor that sells to markets and dispensers in London, but that is the only person they sell to. 

Ms. VELA ́ ZQUEZ. And just tell me with a yes or no answer, 

have you contacted or used any of the programs through the federal Department of Commerce or the Small Business Administration—— 

Ms. DAVIS. No. 

Ms. VELA ́ ZQUEZ.—to help you in that regard? 

Ms. DAVIS. No. 

Ms. VELA ́ ZQUEZ. Thank you. 

Chairman CHABOT. Okay. The gentlelady’s time has expired. I 

will now recognize myself for 5 minutes. 

With the four of you from here to here, let me ask you, when you 

started out your business, was it just yourself? Did you have anybody else? How many employees do you have now? We will just go 

down the line so we can get a good idea of what size businesses 

we are talking. Mr. Jacobs? 

Mr. JACOBS. Yes, thank you. We started with two employees, 

myself and a co-founder, Francois Terney, and we have expanded 

now a very small amount. We only have four employees. We are 

looking to expand within 2017 up to 50,000 square feet, and probably—— 

Chairman CHABOT. So you have doubled two to four and maybe 

even further. 

Mr. JACOBS. Yeah. 

Chairman CHABOT. Over what period of time is that? 

Mr. JACOBS. Probably about a year and a half. 

Chairman CHABOT. Okay, thank you. 

Mr. JACOBS. Yeah. 

Chairman CHABOT. Okay. Ms. Davis? 

Ms. DAVIS. I started alone and was alone for several years. I 

now have a team of eight including me, and we have been in business for 7 years. 

Chairman CHABOT. Thank you very much. Mr. DiMarino? 

Mr. DIMARINO. Now we have 28. When I started working in the 

company in 1975 we were three. 

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Chairman CHABOT. 1975 did you say? 

Mr. DIMARINO. That is when I started working there, we were 

three. 

Chairman CHABOT. Yeah. 

Mr. DIMARINO. Now we are 28, but we also survived the recession and did not lay anybody off through all that, which was pretty 

difficult. But we are able to maintain our force and expand it a little bit. 

Chairman CHABOT. Absolutely, thank you. Ms. Bland? 

Ms. BLAND. We started with just me, and 3 and a half years 

we now have nine full-time W-2 employees, and then two part-time 

W-2 employees. We have 20 businesses on site, and they all have 

one or more employees. 

Chairman CHABOT. Excellent. You literally are the backbone of 

this economy, small businesses. Congratulations to each of you for 

what you have accomplished. It is very impressive, it really is. 

Mr. Friedman, let me ask you, you had mentioned the New Market Tax Credit Program. We use that pretty extensively in Cincinnati, especially in revitalizing the downtown area, and we have 

been pretty successful. In fact, the chairwoman at the time came 

there and saw a few years back what they are doing down there. 

Ms. VELA ́ ZQUEZ. Our committee, Small Business, while I was 

the chair was one that worked on the legislation. 

Chairman CHABOT. Yeah. We had a bunch of our colleagues 

came from other communities around the country to kind of learn 

about the New Market Tax Credit Program. Now, you mentioned 

there are some things that could be better. Could you tell the folks 

how that works in about a minute’s time, and what improvements 

you might make? 

Mr. FRIEDMAN. In determining whether or not a project is eligible for new market tax credits, they look at the Census tracts and 

the income population in the Census tracts, and I think it is increasingly targeted to highly distressed communities. 

Ms. VELA ́ ZQUEZ. Yes. 

Mr. FRIEDMAN. What has happened, in part because it is a reflection of the density in cities, if you have a small housing development that is market rate, it will skew the income for that neighborhood so that it knocks out the entire Census tract and everything 

sort of in proximity to it because there is a boundary. It is not only 

your Census tract. It is the adjacent tract. 

Chairman CHABOT. So would it be your recommendation that 

that is something that Congress ought to look at and maybe adjust 

accordingly? 

Mr. FRIEDMAN. Yes, for industrial projects. Our resources are 

scarce, and we recognize that, and we have to figure out how to use 

it more effectively. Certainly beyond the industrial development 

side, yes. 

Chairman CHABOT. I would yield. 

Ms. VELA ́ ZQUEZ. Thank you for yielding. The main mission of 

the market is to create jobs that will benefit low-income communities. Because of gentrification and displacement, we have an 

issue, but it is worth revisiting when we have to reauthorize. 

SBREP-219 with DISTILLER

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Chairman CHABOT. That is the kind of stuff that we have 

worked on in a bipartisan manner over the years. We will look at 

that as a result of this hearing. 

Let me ask the four of you again. I think you said no, but has 

anybody had occasion to use the services of the SBA in the past, 

the Small Business Administration, either alone or anything? Mr. 

Jacobs, what was your experience or what did you use them for? 

Mr. JACOBS. My experience was when the storm hit, initially 

before we started or before I started FXE, my business partner had 

another company, DNI. It was out on a pier in Red Hook, and the 

whole place got flooded, 65 inches. Everything was literally destroyed. I was able to get an SBA disaster loan to continue—— 

Chairman CHABOT. Speaking of that storm, by the way, Ms. 

Vela ́zquez was able to get some legislation passed through Congress that had a dramatic impact on that, you know. Did you want 

to talk about, Nydia? 

Mr. JACOBS. Thank you for that. 

Ms. VELA ́ ZQUEZ. What we found was the fact that the decline 

rate of disaster loans was extremely high, and I asked for the GAO 

to conduct an investigation that basically validated my worst fears, 

that too many loans were declined. Many small businesses on the 

Lower East Side, and in Red Hook were impacted, and did not 

have an opportunity to get the assistance that they needed. 

For the first time in the history of the program through my legislation, it was reopened. Any business that did not get a loan could 

reapply, and anyone who lost their business could also reapply. 

Mr. JACOBS. One thing. Thank you very much for the efforts 

you put forward in that. One thing I would just like to say maybe 

so you would know, they actually made me leverage my actual 

home, though, which if I did not own a property I would not have 

been able to get that loan. 

Ms. VELA ́ ZQUEZ. Well, now we changed it. 

Mr. JACOBS. Okay, fantastic. Thank you. 

Ms. VELA ́ ZQUEZ. Okay. 

Chairman CHABOT. Thank you very much. My time has expired. The gentleman, Mr. Meeks, is recognized for 5 minutes. 

Mr. MEEKS. Thank you, Mr. Chairman. Good morning. I just 

want to thank each and every one of these panelists. Extraordinary 

is what makes America America. You are stick-to-it, and I know it 

is difficult. Let me ask, I know Ms. Davis was asked, but let me 

ask Mr. Jacobs first. Have you utilized any, whether it is SBA, 

whether it is the U.S. Department of Commerce? You indicated 

that you were looking to do things internationally also. Is that correct? 

Mr. JACOBS. Yes. 

Mr. MEEKS. Whether it is the Ex-Im Bank or OPIC, have you 

utilized any of the government programs to try to help enhance 

your business? 

Mr. JACOBS. In FXE, there are a few things that have been 

done. I am basically behind the computer doing all the engineering 

and the components and everything. We have a different entity in 

our company that could probably speak a little bit more. 

I mainly do all the engineering and all the design work actually, 

so I am not the one to focus on the international kind of financing. 

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The only internationally that we have attempted to do is the EB5 Program, which it does not seem to be a program that is very 

stable, and there seems to be like a loopholes and a lot of strangeness to it. Again, it focuses more so on real estate and very lowrisk investment where we need that to be kind of be able to take 

a higher risk, you know, and invest in companies like ours. 

Mr. MEEKS. Ms. Davis, you indicated you are starting to go into 

China, et cetera. Have you looked toward, and I listened to your 

three problems. One, workers’ compensation insurance, two, landlord relations, three, access to capital, and breaking down barriers 

internationally. I think that is indicated by Ranking Member 

Vela ́zquez, trade agreements that we are looking at, whether or not 

they break down some of those barriers. 

My question, have you looked at Ex-Im Bank, for example, or 

OPIC, or any other government, you know, using the U.S. Commerce. They have a program or the Chamber of Commerce. I do not 

know if any of you are involved in the Chamber of Commerce, 

whether it is the Brooklyn Chamber or the U.S. Chamber. Have 

you utilized any of those entities to help you to grow and to move 

forward with reference to the company? 

Ms. DAVIS. I have not really, and honestly I am not too aware 

of what is available to me. I think that is simply because I spend 

most of my time chasing people for money to pay my Amex bill. To 

be completely honest, to even imagine spending enough time to devote to get into one of those systems or in one of the programs, it 

is seems overwhelming, and maybe it is not. But I have not ever 

because of that. 

Mr. MEEKS. I am sure it is overwhelming. You are trying to run 

a business, and you are trying to do a number of things. 

Ms. DAVIS. Yeah. 

Mr. MEEKS. Chasing and finding out what program is there or 

not there is not something that is your focus. 

Ms. DAVIS. No. 

Mr. MEEKS. Your focus is move your product on a day-to-day 

basis. But I do want to let you know that there are, especially 

internationally, some opportunities for financing and access to capital. We have been putting a very tough fight as far as the reauthorization of Ex-Im Bank to make sure that they are catering to 

small businesses to help them do exports. I wanted to bring that 

to your attention. 

Mr. DiMarino, let me ask you. You have been in business a long 

time. Have you utilized any of the government services or government programs that may be available to help you enhance and 

grow your business? 

Mr. DIMARINO. No loans through the SBA, but we were able to 

put our green roof through the good graces of Congressman 

Vela ́zquez on our facility with a Federal grant, which was quite a 

project. 

Mr. MEEKS. Ms. Bland, same question. 

Ms. BLAND. Yeah. We have won a couple of grants from the 

SBA to run our incubator program, and then to expand our incubator program to include contract manufacturers, so we are very 

grateful for that. Also we were asked to come down and talk with 

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22 

businesses. I was astonished when I found out originally what the 

definition of a ‘‘small business’’ was for the United States, and that 

is still something that completely vexes me. I consider 500 employees to be a huge business, you know. There are a lot of smaller 

businesses that are 25 people and under, and they deserve a specific type of support. I appreciate them having us talk about that. 

Mr. MEEKS. I think that we need to make sure that those agencies are getting back out to small business so that they know what 

is going on more. 

Ms. BLAND. Well, I think they need sector specific Web sites, 

that it is just like, hey, food businesses, here is what you can do. 

Hey, fashion, here is what you can do. And have it be completely 

separate and regimented and clear. 

Mr. MEEKS. Let me ask. I know I am out of time, but, Ms. 

Bland, you shook your head that you had worked with Chambers 

of Commerce, whether it was the Brooklyn Chamber. 

Ms. BLAND. Oh, yeah, I love the Brooklyn Chamber of Commerce. I cannot believe how well they have outreached to small 

business to hiring. Like I started, and it literally was like me and 

two other people, and already they were reaching out to us and 

seeing what they could do to help. I do not think we would be 

where we are at without the Brooklyn Chamber of Commerce. 

Mr. MEEKS. Thank you. I am out of time. 

Chairman CHABOT. Thank you. The gentleman’s time has expired. Before recognizing the gentlelady for her questions, I would 

like to recognize one of your members of Council here. Councilman 

Robert Cornegy is here, and he is the chairman of City Council’s 

Small Business Committee. 

You all here also in City Council have a small business committee as well, and Councilman Cornegy is the chairman of that 

committee. We appreciate him being here and showing his interest. 

Thank you very much. Thank you. Thank you. 

Mr. MEEKS. He is short, though. 

[Laughter.] 

Chairman CHABOT. I would now like to recognize the gentlelady 

from New York, although all my colleagues are gentlefolks from 

New York, Ms. Clarke, for 5 minutes. 

Ms. CLARKE. Thank you very much, Chairman Chabot, and to 

Ranking Member Vela ́zquez. To our witnesses, thank you for coming today to share your and lend your expertise to the subject matter. I, first of all, want to express my regret in being delayed this 

morning. I had a small business event in my district just prior to 

getting here, and so please excuse me. 

I wanted to ask a couple of questions of you, Ms. Davis in particular. We are intrigued, of course, by small businesses that take 

on sort of the entrepreneurial spirit that leads them to marketing 

overseas and to capturing those markets. As we know, more than 

95 percent of the world’s consumers live abroad, but more than half 

of small exporters post sales to only one foreign market. It is our 

goal to make exporting more attainable for small businesses, and 

your business is available throughout Europe and Japan. 

In your experience, which countries are generally easiest to export to, and what makes breaking into more than one foreign market so challenging? 

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23 

Ms. DAVIS. I think it is difficult to answer that question because 

I work with distributors that handle a lot of the exportation, and 

the people that I export to have come to me as most of our accounts 

have. I am like a business unicorn in that way. We are really, really lucky. I do not have a good answer for you. 

Ms. CLARKE. So we would probably have to take a look at the 

whole distribution network and the relationships. 

Ms. DAVIS. I would hit up the international distributors for that 

information because they are really the ones that are going back 

and forth and dealing with taxes, and laws, and tariffs, and transportation. I just have to get my pallets down to them in a container, and then they take it from there. 

Ms. CLARKE. Very well. Ms. Bland, MANUFACTURE New York 

facilitates relationships between designers and a production team, 

and you act as a type of mentor to budding fashion designers, and 

encourage them to not only produce their brand, but grow their 

business. Can you discuss some of the challenges that you face in 

making these connections between production teams and the designers? 

Ms. BLAND. That is actually one of our strengths because everyone on my team comes from the fashion industry, and we have all 

been marketing locally for decades. So I would say that it is a more 

general challenge for designers in New York City before they find 

MANUFACTURE New York because most manufacturers do not 

want to be contacted by unvetted designers or new businesses that 

do not understand how to manufacture and how to speak with 

manufacturers. 

One thing that we have worked very hard on is to create fashion 

design boot camps where designers get to learn the entire manufacturing process in a weekend. At that point they are not coming to 

all of these contract manufacturers who are all individually all over 

the city and all five boroughs, and asking for things that are impossible, things that cannot be done in timelines that are not feasible 

at prices that sound ridiculous because they are thinking that they 

are going to get the same price as China. 

We try to provide some background around that, and I would say 

that those sort of programs, we want to work with local schools, including high schools, to help get people more educated earlier in 

the process because nationally fashion designers as a career has 

doubled in terms of the Census over the last decade. It is astonishing how many people want to be fashion entrepreneurs, and we 

want to help them to have access to it, but in a way that makes 

sense for manufacturers. 

I would add that the garment district is a place where everyone 

was co-located together in a very high concentration, that idea still 

needs to remain. Having contract manufacturers spread out 

throughout the city in a way that they are not able to access the 

same support structures and the same infrastructure as each other 

and networks is unfortunate. That goes for everything from hiring, 

to equipment, to systems, to grants, to you name it. 

The idea of co-locating them all on site in one place, which is 

what we are working towards at Liberty View Industrial Plaza, 

that is a 21st century model for garment manufacturing. 

SBREP-219 with DISTILLER

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Ms. CLARKE. And, Mr. Friedman, many small manufacturers 

with growth potential may not seek assistance with operations, 

marketing, and finance because they are simply unware that resources are available. However, the SBA has many entrepreneurial 

development programs, including SBDCs and women’s business 

center. What can we do to increase the awareness among small 

manufacturers of the SBA’s business counseling services? 

Mr. FRIEDMAN. I think there is a tremendous network of economic development organizations and professionals out there. I 

think Mike is on the board of—— 

Mr. DIMARINO. Yes. 

Mr. FRIEDMAN.—of South Brooklyn Development Corporation, 

so that is one example of an intermediary that generally does not 

get Federal funding, but their job is to make those connections. So 

Bob may be doing it in one particular sector, but just building the 

basic economic development infrastructure so that those connections can be made. Maybe there is a Federal funding opportunity 

or just some acknowledgement about the need for that strata of 

intermediary. 

Ms. CLARKE. Very well. Thank you, Mr. Friedman. I wanted to 

acknowledge very quickly Mr. Meeks and, of course, our councilman, Robert Cornegy and thank them for being a part of today’s 

proceedings. I yield back, Mr. Chairman. 

Chairman CHABOT. Thank you very much. The gentlelady 

yields back. We are going to into one more round of questions here, 

and I would like to recognize Ranking Member, Ms. Vela ́zquez, for 

5 minutes first. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. Mr. DiMarino, as 

more manufacturing work moves toward automation, workers need 

advance education to operate the machinery that produces highly 

technical goods, like computers and aerospace parts. And these jobs 

also command higher pay. What are the challenges you are facing 

today in that regard? 

Mr. DIMARINO. The challenges are really the training. I do not 

think it is so much of a higher education. It is one’s ambition or 

willingness to learn and apply themselves to it. Like I said in my 

testimony, we hired two young people from City Tech, and the first 

young lady came in and she wanted to program my CNC machines. 

She never did it in her life. I interviewed her, and I could just see 

the fire burning in her belly. It was staring at me right in my face. 

So I called my foreman. I said, Dave, you know, take Anna 

around and show her. He said, what do you want to hire somebody 

else in the office for? It is too much overhead. Just take her around 

and talk to her. He came back in a half an hour, he says, hire her. 

You could see she had a hunger for it, and we sent her for training, 

and now she is programming five-axis machines. It is unbelievable. 

It was tremendous. 

Someone does not need years of education. I mean, we put her 

in education, but not advanced education. But it is the willingness 

to learn, and you have to have an interest in it. 

Ms. VELA ́ ZQUEZ. Mr. Friedman, so many times we meet with 

businesses, and when we ask them the biggest challenge they are 

facing, it is the lack of trained workers. What kind of role do you 

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see for the federal government and at the state level that we could 

be doing more in terms of learning opportunities for our workforce? 

Mr. FRIEDMAN. One is an expansion of something you are already doing now having to do with support community colleges. 

Mr. FRIEDMAN. Not just growing support for community colleges, but also shifting to an apprenticeship model or providing additional funding for apprenticeships. One of the things that companies often say to me is that they would prefer to do the training 

themselves. Because manufacturing is essentially small business, 

the diversity of skills is tremendous. If we move towards kind of 

a lifelong learning model using apprenticeships, I think that would, 

you know, allow for the diversity in the sector, and yet create, you 

know, a stream of skilled workers. 

Ms. VELA ́ ZQUEZ. Let us talk for a second about how our country needs to encourage more students to pursue degrees in science, 

technology, engineering, and math, you know, the STEM subjects. 

What do you think? In terms of your organization and your relationship with the public school system in New York City, do you 

have any type of interaction? Do you have any type of conversation? Are there any type of meetings that take place to assess how 

can we encourage more, especially in places like New York City 

where the face is changing? You have more Latinos, more women, 

more African-Americans, more Asians. 

What can we do to narrow the gap that exists between what is 

going on in terms of the marketplace and the curriculum that we 

have in place these days? 

Mr. FRIEDMAN. Sure. I am not sure I can offer the big answer 

there. 

Ms. VELA ́ ZQUEZ. Sure. 

Mr. FRIEDMAN. But to bring something together that I think a 

bunch of us have talked about is how to co-locate different types 

of services. Workforce development and education is always the odd 

man out, and maybe that is a function of funding streams that is 

distinct from economic development. There is a tremendous silo between our economic development organizations and our workforce 

and labor organizations. 

One of the things that Pratt is working on with the Brooklyn 

Navy Yard, with City Tech, with the Board of Ed, Department of 

Education, is to co-locate a whole bunch of those facilities in the 

Brooklyn Navy Yard. We are in proximity to a number of NYCHA 

developments. So the idea is to make it as absolutely seamless as 

possible. 

Businesses, residents, they do not know who they are getting 

services from half the time, nor should they, you know. They 

should not have to have that skill. We want them to be good at 

their business. We want them to be good in high school. Pratt Institute already brings about 200 students to campus every Saturday to do STEAM education, and we are trying to link that moving 

forward with a CTE school that would be located at the Brooklyn 

Navy Yard so that you can get a real seamless integration of training, and resident employment, and business development. 

Chairman CHABOT. Okay. Thank you very much. The 

gentlelady’s time has expired. I recognize myself for 5 minutes. 

SBREP-219 with DISTILLER

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One of the things, and I think, Mr. Friedman, you had mentioned 

that tax policy is not the primary concern that business folks have, 

you know, but it certainly is one of the things that they have to 

consider. I was wondering if any of the members on the panel were 

aware that towards the end of last year, Congress passed some legislation relative to the Tax Code that was supposed to help especially small businesses that did a couple of things. 

One thing, there is Section 179 expensing that you could buy a 

piece of equipment and take it off all in that year. There are limitations to it, but overall rather than depreciating this over 15 years 

or a long time, you could take it all off that year right off your 

taxes. So the incentives, the argument was people would buy that 

piece of equipment, and put it into service, and become more productive, and be able to take it right off their taxes that year. That 

would help both that company that bought it, plus the company 

that made that thing, hopefully made here in the United States. 

We cannot control that, but hopefully made here, and the people 

that worked in that factory. That would help the economy. That 

was the idea. 

Also the research and development tax credit, and we made 

these things, we made them permanent. Let us see. Is that the one 

was permanent? There is one that was not. Bonus appreciation was 

the other one. That one is until 2019, I believe, and that is a credit. 

But we did those things. A lot of times we had done these in the 

past, but we just kind of extended it from one year to other, and 

we did it towards the end of the year, and so you could not plan 

for it, and so it did not do a lot of good. Well, finally Congress got 

its act together sort of in a bipartisan manner and got this thing 

passed, and it should help you to take advantage of the Tax Code 

out into the future. 

First of all, were you aware that this happened, and did anybody 

get a chance to take advantage of it yet or whatever? Mr. 

DiMarino? 

Mr. DIMARINO. I have been fortunate. I have a lifelong friend 

and my tax attorney. I have been doing the R&D credit since it 

first came out, so that it is in the 1980s. I think it was 1986 when 

it first was implemented. But it is a wonderful tool, and everybody 

here at this table should take great advantage of it. It is tremendous. Really a tremendous tool. 

Chairman CHABOT. I will yield to the gentlelady. 

Ms. VELA ́ ZQUEZ. You need to have good accountants so that 

they could provide information to you in a timely—— 

Mr. DIMARINO. He is one of the Nation’s leading experts in tax 

and R&D credit. 

Chairman CHABOT. Yeah. But, to me that would be one criticism of Congress that a lot of times we did this stuff, but we did 

it towards the end of the year in some gigantic omnibus bill that 

you throw everything but the kitchen sink in. By the time your accountant has got to go through it and figure out what the heck was 

in there, it was too late to take advantage of it, and you could not 

depend on it. But now the stuff that we made, those in particular 

were permanent. 

I would urge all of you to take a look at it because you could buy 

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tage, and I would advise all small businesses who may not know 

about that to look into it. 

Another question, and I was going to follow up on something that 

the ranking member talked about, job training and the skills that 

you need when you are trying to hire something. I talk to a lot of 

small businesses in my district, and one complaint that I get is 

that, you know, we obviously want to have a safety net. If people 

have been laid off or they have not had employment for a while, 

something to make sure they can take care of themselves and survive. But sometimes what I hear is unemployment or other things 

make it such that people will not take the job, you know, at something that the small business could actually afford to pay somebody. 

Do you hear this? Is this an experience that you had or want to 

comment on? Ms. Bland? 

Ms. BLAND. I have definitely never had that experience. 

Chairman CHABOT. You have not had that experience. 

Ms. BLAND. No. 

Chairman CHABOT. Okay. 

Ms. BLAND. I have had some employees who have been coming, 

but they ran out of unemployment, and now it is just like, oh, my 

god, what am I going to do, and then they come to us. Most of the 

people that I have talked to, I have never personally been on unemployment before, but most of the folks in my community, it is 

very typical in the freelancer and creative community for people to 

spend some time on unemployment at some point during their career. And it has nothing to do with laziness. 

Chairman CHABOT. Okay. 

Ms. BLAND. I would say that until we have a social safety net 

for freelancers that is a little bit more coherent than now, we are 

not going to have that truly flexible talent pool that all businesses 

can take advantage of. Right now it is a little wooden where I have 

to keep people as full time, part time, or I am probably going to 

risk losing them as opposed to if we had a little bit more play with 

it, we could have people on a more hourly basis as opposed to either full time or part time. 

Chairman CHABOT. Okay. Thank you. My time is just about 

ready to expire, so I will not ask another question. I will now yield 

to the gentlelady for 5 minutes, Ms. Clarke. 

Ms. CLARKE. Thanks again. Thanks once again, Mr. Chairman. 

I wanted to just out of curiosity ask Mr. Friedman if your experience in working with emerging manufacturers, is there a role that 

you see sort of the social media landscape playing in helping those 

entrepreneurs to access information and maybe to network and 

connect with others that are in similar predicaments, or that can 

be helpful in terms of resource and support? I want to also extend 

that to the rest of the panel to discuss. 

Mr. FRIEDMAN. Let everyone know that we did not conspire before this meeting in any way to answer that question. There is a 

tremendous role, and we are at the very, very beginning. It is sort 

of like the shared economy comes to manufacturing. There is under 

capacity in a lot of factories, and so the issue is how can we begin 

to have different companies use the same factory. That is an app, 

SBREP-219 with DISTILLER

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you know. That is what Uber does. That is RB&B does. So there 

are those opportunities. 

Beyond that, we also run the Made in NYC initiative, which is 

a local branding campaign to drive consumer traffic to local manufacturers. To be honest, it is has been a shoestring operation. We 

got funding for the first time from the New York City Council, 

which is really allowing us to ramp that up. What we will be having is a social media campaign to attract consumers, to educate 

them about what is made locally, and then to get them to go to everyone’s websites and buy directly from local manufacturers. 

Ms. CLARKE. I heard in particular Ms. Bland speak of the need 

to sort of distill information by industry. And it would seem to me 

that that maybe one of the vehicles that can be helpful in doing 

so that, you know, at one click if you manufacture motorcycles, you 

know who is in that space, what types of government assistance or 

programs are tailored towards that industry. I was just wondering 

whether you thought that would be helpful given that it is such a 

utility, but whether we have reached that space yet. 

Ms. BLAND. Are you talking in reference to Made in NYC, or 

just in general? 

Mr. FRIEDMAN. Or fashion in general. 

Ms. CLARKE. It could be—— 

Mr. FRIEDMAN. We are not there yet. 

Ms. CLARKE. Okay, we are not there yet. 

Mr. FRIEDMAN. The honest answer is over the next year and 

a half, we hope to be doing a lot of that in New York City. We are 

one city, you know. San Francisco is very advanced in that, and if 

you go to sfa.org, they have a real inventory of what is available. 

There is still much more opportunity for networking. 

Ms. BLAND. Yeah, and I think it also starts with public awareness campaigns here in New York City that are in the languages 

of the people that are being targeted, you know, because we see 

that it is more effective for us to go out in Sunset Park with a 

printed out sign in either Mandarin or Spanish and put it directly 

in the neighborhood than it is for us to try to post something on 

Craigslist or anything like that. We also have to contextualize it for 

the sector, and the neighborhood, and the language. 

Ms. CLARKE. Very well. Anyone else want to add anything? 

Ms. DAVIS. Just a small thing. When you said bring it into the 

language of the people who it needs to apply to, I actually thought 

you meant the difference in governmental language and the language of most people. 

Ms. BLAND. That is a good point. 

Ms. CLARKE. Right. 

Ms. DAVIS. I am not in government. I am not anyone that is involved in government. Any time things are simplified, bullet points, 

to bring us into programs is so easy. A good example of this I think 

Oscar Health Insurance. It is a health insurance company that basically makes things click, click, click easy. There is a picture. 

There is a big button. There is an app. It is so easily accessible. 

I feel like you would just attract a lot more people to these programs if it were simple. 

Ms. CLARKE. What they call plain English. 

SBREP-219 with DISTILLER

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Ms. DAVIS. Yeah. I mean, make it like a kid, whatever you need 

to do. 

[Laughter.] 

Ms. CLARKE. Very well. Very well. If there are no other answers, Mr. Chairman, I yield back. 

Chairman CHABOT. Thank you. Before coming to Congress, I 

was a lawyer, and if we made it too plain and simple, we would 

put them all out of work, though. I am sure you would not want 

to see that, right? No. I am sure we probably would. 

But I can just say this has been extremely helpful, I think, to all 

members that we were able to be here today. I would like to yield 

to my colleague, Ms. Vela ́zquez, if she would like to make a closing 

statement or a closing point or two. 

Ms. VELA ́ ZQUEZ. Sure. Thank you, Mr. Chairman. I really appreciate your taking time to come and listen to the people, the 

businesses that are creating jobs, and to see what the challenges 

are, what is working and what is not working. Mr. Friedman, you 

have raised the issue of the tax credits, which we will revisit. 

Mr. FRIEDMAN. Thank you. 

Ms. VELA ́ ZQUEZ. Mr. Jacobs, I am working on legislation that 

would allow for private capital equity to invest in startups like 

yours, but to structure that type of investment in a way where you 

do not have to start paying back right away until, you know, you 

have reached or you have put your product into commercialization. 

That will be a federal program geared towards manufacturers in 

the United States that lack the kind of liquidity and capital that 

will enable you to continue to work on your business, especially 

emerging businesses. So how can we, the federal government, 

incentivize with matching funds to create those type of companies 

like SBIC, but where you do not have to pay back immediately as 

is the case if you have a traditional loan. 

This has been very helpful. I really appreciate you all taking 

time out of your busy companies and businesses to be here with us. 

Mr. Chairman, I yield back. 

Chairman CHABOT. Thank you very much. The gentlelady 

yields back. I want to, as chair of the Committee, thank the Council of New York City for opening up their chambers to us today to 

let the United States Congress come here and use these fine historic facilities. We do appreciate it. We appreciate the folks here in 

the audience, and especially the panel members here for their testimony. This has been very helpful to us. We will take what we learn 

here back to our colleagues in the Congress, and hopefully we will 

do whatever we can to help to improve the climate for especially 

small business manufacturers in the United States, so thank you 

very much. 

And if there is no further business to come before the Committee, 

we are adjourned. Thank you. 

Ms. DAVIS. Thank you. 

Mr. JACOBS. Thank you. 

[Whereupon, at 11:17 a.m., the Committee was adjourned.] 

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A P P E N D I X 

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The State Of Urban Manufacturing 

Presented to the Small Business Committee, 

U.S. House of Representatives 

February 22, 2016 

Good morning. I am Adam Friedman, Director of the Pratt Center for Community 

Development and I thank you for the opportunity to testify regarding the 

challenges and opportunities presented by urban manufacturing, both nationwide 

and in New York City. The Pratt Center is a department within Pratt Institute and 

the Center provides technical assistance to community groups and small 

businesses in low income communities to build a more sustainable and equitable 

New York. Prior to Pratt Center, I was Director of the New York Industrial 

Retention Network and the Garment Industry Development Corporation. 

I am also Chairman of the Urban Manufacturing Alliance, a network of 

approximately 350 economic development professionals in more than 100 cities. 

The UMA is committed to strengthening urban manufacturing and creating wellpaying manufacturing jobs by helping cities to share research, collaborate in 

program, and providing an urban perspective in economic development policy. 1 

1 The positions expressed here are that of the Pratt Center and not Pratt Institute or the Urban Manufacturing 

Alliance. 
31 

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We've all probably felt some pride when listening to Frank Sinatra belt out about 

New York "if you can make it here, you can make it anywhere." But when you 

think about it, he's saying New York is a crazy place to do business, and what he's 

saying is particularly true about manufacturing: The infrastructure is crumbling. 

Utilities, labor, and transportation all cost more, and not only is the cost of real 

estate extraordinarily high, there is the risk that your space is going to get 

converted to a condo, coffee bar or used clothing store. There have been 

moments over the past 30 years when I've been talking to a manufacturer and 

suddenly feel like saying "you need to run, save yourself!" 

But here's the thing: New York, and cities across the United States, are actually 

great places to do business, and we're now seeing a resurgence in our urban 

manufacturing sector. Districts in New York, San Francisco and Los Angeles, three 

of the most expensive cities in the United States, are all seeing new small 

manufacturing businesses open. 

A healthy manufacturing sector 

must be part of any 

comprehensive strategy to 

address the growth in income 

disparity and expand the 

middle class. A job in 

production is one of the best 

ways to secure a well-paying 

job, particularly for people with 

limited educational attainment. 

2 
32 

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Expanding urban manufacturers is a realistic strategy. are focusing on high value 

added products, as opposed to commodity products. New York was once home 

to Farberware which made pots and pans, and Swingline which made staplers, 

and until recently Sweet & Low which makes sugar substitute. And while we're 

may be saddened by their loss and challenged by the need to find new jobs for 

their workers, moving forward we need to focus on companies with high value 

added products that benefit from being in an urban location. As you'll hear 

today, urban manufacturers take advantage of proximity to market, design talent, 

highly skilled labor and, perhaps in the future, the wealth of resources that we 

now throw away and that could be recycled. 

In addition, we are seeing dramatic changes in technology that are essentially 

shrinking factories. 3D printers, CNC machines, and very powerful software that 

facilitates design but has a very simple interface are making it possible for a vast 

array of products to be made in smaller spaces. This shift translates into more 

efficient use of real estate, which makes cities more competitive. 

Even more efficiency is achieved through co-working spaces where separate 

companies are sharing equipment and production capacity. Manufacture New 

York is a great illustration of this, as is TechShop, a company that provides factory 

space based on a gym-membership model: you pay a monthly fee to use 

sophisticated manufacturing equipment so that you can launch a manufacturing 

company without the huge startup costs of a factory. 

While these changes in technology are helpful, technology is not the issue or the 

criterion that should guide economic policy. The defining characteristic for 

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economic development efforts should be "high value." High value reflects a 

market decision, the willingness of consumers to pay premium prices for a 

product- a premium that allows the entrepreneur to pay higher wages and bear 

the higher costs of doing business in urban areas. 

High value may come from advanced technology but not necessarily so, and it is 

important to remember this when designing programs to assist manufacturers. 

For example, a company may need loans and grants to purchase equipment, but 

vouchers or wage reimbursements may be more appropriate for companies 

which derive value from the skills of their workforce. 

One way of thinking about high value is the 'cultural content' embedded in a 

product. High value can be achieved not only by technology but also by good 

design, by innovation, by aesthetic quality, or by otherwise meeting the needs of 

consumers. This is why there is such strong synergy between universities and 

manufacturing in cities. More than 4,000 design and architecture degrees are 

awarded every year by universities in New York City, at FIT, Parsons, Pratt, SVA, 

Kent State and others, and that wealth of design talent is leading to new business 

formation and job creation. In addition, universities are making strategic decisions 

to help their graduates and their home cities by launching this talent into 

business. For example, First Batch at the University of Cincinnati selects graduates 

in design for an incubator that includes helping them scale up using local 

manufacturers. 

Cities have particular competitive advantages based on their density and the 

networks of specialized businesses made possible by density. Small 

manufacturers typically form networks with other manufacturers, each 

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contributing specialized skills and products as needed to produce a final product 

in an efficient flow of work, then disband and move onto the next team and 

product. The flexibility of these networks and temporary partnerships creates 

competitive advantages for small firms which do not have to carry the fixed 

overhead costs for all the equipment, space or labor needed for every product.3 

Neighborhoods filled with older loft buildings, such as Manhattan's Garment 

Center, Long Island City in Queens, and Greenpoint and Williamsburg in Brooklyn 

are ideal for nurturing these production networks. The extraordinary 

concentration of these production networks, consumers, producers, skilled labor 

and suppliers makes it possible for an entrepreneur with a new idea to get it 

designed, tested, financed, manufactured, marketed and onto retail shelves not 

only within a short distance but also within a short period of time. 

The shift to a low-carbon economy is leading to other new competitive 

advantages for urban manufacturing. Virtually since the invention of the wheel, 

the cost of transporting goods has been going down, making it possible if not 

inevitable for companies to engage in global sourcing strategies. But rising energy 

costs will inevitably lead to rising transportation costs, making cities more 

competitive- not for all but for more manufacturing. Shifting the transportation 

cost curve up will encourage more decentralized or regional markets and 

production. One way urban manufacturers may begin to capitalize on this 

opportunity is by creating cooperative distribution networks in which small 

manufacturers add products from other manufacturers to their delivery routes to 

ensure that their trucks are full and to share the costs. This is already beginning to 

happen with the release of Cargomatic, a smartphone app that allows users to 

share trucking transport for cargo. 

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Another shifting cost curve is waste disposal- an increasingly expensive service as 

the availability of dumpsites diminishes and as communities and governments 

become more alert to the dangers of dumping hazardous waste. One way to 

address this issue is to increase recycling. Recycling has been hampered by the 

small size of the manufacturers because their recyclable waste streams are 

likewise small and diverse, which makes collection, sorting, treatment and 

reselling less cost-effective. In New York City, a pilot project launched by the 

Industrial Technology Assistance Corporation (ITAC) aggregated the waste from 

twenty small manufacturers located in one building at the Brooklyn Navy Yard, an 

industrial park owned by the city government. The pilot has produced very 

impressive results, reducing waste removal costs by approximately 30% as their 

waste has become more attractive to recyclers and leading to a very dramatic 

90% reduction in trucking. Some of the companies have even been able to use the 

waste from their neighbors as raw materials. 

The forces supporting more micro-manufacturing in cities coincide with growing 

consumer interest in locally made products. The 'locavore' movement is most 

obvious, where consumers want to support local farms, reduce carbon emissions 

from trucking, show pride in their local cuisine and assure the safety of their food 

supply. Beyond food there is a growing consumer preference for locally made 

apparel, furnishings and other consumer goods, driven by both consumer and 

designer support for local sourcing to ensure quality, support the local economy 

and nurture new design talent that reflects distinction, in reaction to the 

homogeneity offered by national brands. An online survey of 240 consumers by 

BBDO, an internationally renowned marketing firm working on behalf of the Pratt 

Center, found that approximately 70% of consumers interviewed pay attention to 

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where the products they buy are made; 70% also said that they would be more 

likely to buy local if it created local jobs and/or supported small local businesses. 

Finally, there is the growing class of micro-manufacturers- entrepreneurs who 

have a passion for both design and production, sometimes on their own with no 

employees, but also growing up to 10 employees as their business matures.4 They 

want to turn their ideas into products, not just as an artistic expression or impulse 

but also as a commercial venture. Micro-manufacturing is well established in the 

food industry, and there are food incubators and shared kitchens scattered 

throughout the city. 

Micro-manufacturing is not 

confined to New York. 

Nationwide, between 1996 and 

2008 there was a dramatic 

increase in the number of firms 

with one employee (65.5%), a 

significant increase in firms 

with two to nine employees 

(33%), but decreases in all 

categories of firms employing 

more than ten people. 

Number of US Manufacturing 

Firms by Number of Employees 

Let me offer a couple of ways the federal government can be more supportive of 

the growth of urban manufacturing: 

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A particular focus of public intervention has to be to modernize older industrial 

buildings that were originally designed for large, single-tenant manufacturing 

companies, the types of companies like Farberware and Swingline discussed 

above that have largely left our urban areas. Today's small urban manufacturers 

need appropriately sized and designed space- often multi-tenant buildings that 

can achieve the density and diversity that stimulates innovation and the networks 

of small businesses which create competitive advantages for urban 

manufacturers. Manufacturing uses are unlikely to be able to afford rents that will 

incentivize such development. City, state and the federal government will have to 

reorient their development subsidies away from large new owner-occupied 

developments (often located in greenfields) and in favor of the renovation of 

older urban industrial buildings. 

One of the best ways to support this redevelopment is through non-profit 

organizations whose mission is to create industrial jobs. The non-profits can 

either partner with developers, acquire some equity and participate in 

management or become developers themselves. There are a growing number of 

organizations across the country that are doing this: 

1. In New York, the Brooklyn Navy Yard Development Corporation manages a 

300-acre Industrial Park which was formerly a military base. Their 

commitment to preserving affordable space for production has given their 

industrial tenants the security they need to reinvest and develop strong 

relationships with the surrounding community resulting in jobs for 

residents; 

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2. In San Francisco, PlaceMade, with the support of the City, will be acquiring 

56,000 sq. ft. of newly constructed industrial space in exchange for the 

developer receiving permission to building offices in an industrial area; and 

3. In Indianapolis, the Riley Area Development Corporation will have equity in 

a redeveloped industrial building that will have a mix of offices, maker 

spaces and legacy manufacturers. 

A major challenge to this redevelopment is that it has been very difficult to use 

IDA financing or New Market Tax Credits, two of the primary financing tools 

offered by the federal government. While EDA funding has generally been 

flexible enough to support multi-tenant redevelopment, including where the 

owner is a non-profit, IDA and NMTC have been much more problematic. 

NMTC are restricted to projects in distressed census tracts but a very modest 

amount of residential gentrification in a neighborhood adjacent to an industrial 

project can make that project ineligible. I strongly believe NMTC and other 

economic development benefits should be targeted to areas where they are 

needed the most, but the current mechanism is not fine grained enough to work 

properly in urban areas where neighborhoods can change dramatically in just a 

block. In fact, retaining manufacturing and blue-collar jobs in the face of 

residential gentrification should be a high priority for NMTC. 

In New York, IDA bond financing has been hampered by the cap on both 

individual project cost and the provisions that limit capital investment over a 3-

year period. The costs of real estate and equipment are not going down and need 

to be adjusted to reflect urban markets. In addition, the definition for eligible 

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expenses may be too narrow in limiting financing to the factory floor but not 

ancillary uses such as a locker room or kitchen/cafeteria area or offices (which are 

used by managers, administrators, etc. ofthe primary manufacturing user.) 

In addition to these program-specific suggestions, there has to be a shift in 

perspective away from the obsession with cutting taxes to be replaced by a 

strategy that encourages investment in public goods like infrastructure and 

education that make companies more competitive over the long term. I have 

personally met with more than a thousand small manufacturers over the past 

thirty years, and less than a dozen have said they could create jobs if only their 

taxes were cut. The issue is sales, or more precisely the anticipated return on 

investment, not taxes which have a marginal impact. When sales are strong and 

business is confident, they will invest in new equipment and training because they 

expect a good return. Taxes pay for the improvements that manufacturers need 

to be competitive, such as maintaining the infrastructure so companies can get 

their products to market, rebuilding the electric grid to support decentralized 

clean energy production, and creating a highly educated workforce that has the 

skills to make high value products. 

One last, perhaps unexpected, perspective: We cannot have an entrepreneurial 

economy if we still tie health care and health insurance to the workplace. An 

entrepreneur should not have to put his or her family's health at risk to leave a 

job to start a business. I have had Etsy "shop keepers" say to me they want to 

grow their fledgling businesses but cannot devote the time because they cannot 

leave their old jobs and lose their insurance. I've also had furniture makers and 

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woodworkers say to me they cannot compete against their Canadian colleagues 

because the Canadian government pays for the workers' health care. 

let me wrap up by saying how much I appreciate your efforts to reach out to us in 

New York. New York is no longer thought of as an important manufacturing 

center. However, with more than 70,000 manufacturing jobs there are more than 

70,000 New York families for whom a healthy manufacturing sector remains of 

tremendous importance. 

Thank you. 

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Thank you, Chairman Chabot, Ranking Member Velazquez, and 

members of this committee for the opportunity to testify at this 

hearing. And thanks to all of our local Representatives for your 

tireless commitment to retaining equitable opportunities for working and middle-class New Yorkers and their families. 

My name is Bob Bland, and I am the CEO and Founder of Manufacture New York. Founded in 2012, we are rethinking the fashion 

ecosystem and creating a new, vertically integrated 21st century 

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business model that serves the industry’s domestic urban manufacturing needs of today and the future. Our mission is to reawaken 

and rebuild America’s fashion industry, foster the next wave of 

businesses, and create a transparent, sustainable global supply 

chain. 

Fashion design & manufacturing jobs are more than just jobs— 

they are an inclusive pathway to meaningful careers and the potential for business ownership, regardless of previous educational 

background or socioeconomic status. Typically paying 20–30% more 

than equivalent service or retail positions with an average salary 

of $59,750 nationally, they are more likely to include benefits and 

have a clear path for growth, both in terms of skills training and 

opportunities to advance. The New York City fashion ecosystem is 

a unique creative and dynamic cultural powerhouse that touches 

lives internationally on a daily basis, whether we consider ourselves to be ‘‘fashionable’ or not. 

Massive outsourcing of American jobs in the 1980’s & 1990’s resulted in an 86% decline in US apparel manufacturing employment, from almost 940,000 in 1990 to about 136,000 nationally in 

2015. While in 1931, New York City’s iconic Garment District was 

home to the highest concentration of apparel manufacturers’ in the 

world, employing 1 million locals at its height, it has since contracted to 15,000 total apparel manufacturing jobs in the city, 

which contextually, still accounts for 30% of all New York City 

manufacturers. This can look like a bleak picture, but we are sitting on several global opportunities for significant job growth in 

NYC at the intersection of fashions, sustainability and technology 

if we seize the moment. 

New York City is home to 900 fashion company headquarters, 

employs 180,000 people and pays $11B in wages and $2B in tax 

revenue annually. According to a report by the U.S. Congress Joint 

Economic Committee, spearheaded by U.S. Representative Carolyn 

Maloney in 2015, our New York Fashion Week alone generates 

$887M in economic impact locally per year. And yet, we are a $4T 

global industry at an inflection point—we cannot go forward as the 

#2 world polluter (behind oil) with systemic human rights violations throughout the supply chain, generating more than 200,000 

tons of textile waste in NYC alone and 12.4M tons on a national 

scale annually. From the smallest emerging design startup to the 

largest department stores and luxury conglomerates, over the past 

3.5 years we have experienced significant national & international 

interest in the conceptualization, research, development and commercialization of a shared set of resources and best practices to 

capture value and provide accountability at all stages of our supply 

chain. And we are not alone. 

New York City’s unique proximity to a talented, experienced and 

passionate workforce; the headquarters of major brands and media 

outlets in web, print, television and radio; and the emergence of 

Silicon Alley as a hotbed for VC funding of related technology companies from biomaterials (Modern Meadow) to wearable technology 

(Ringly) to the coming connected devices revolution known as the 

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turing opportunities for New York City will be where fashion (apparel, textiles, footwear, jewelry, home goods) collides with previously distant sectors like consumer electronics, health care, transportation and defense. 

Anticipating this great need and in partnership with Salmar 

Properties, and thanks to the support of the New York City Economic Development Corporation (NYCEDC), Deputy Mayor Alicia 

Glen, City Hall and our local representatives, Manufacture New 

York has been awarded a $3.5M Construction Grant to build our 

1st Manufacturing Innovation Hub for Apparel, Textiles & Wearable Technology at Liberty View Industrial Plaza in Sunset Park, 

Brooklyn. 

Sunset Park is a rarity in 21st century New York City: a bluecollar walk-to-work neighborhood. Downhill from the residential 

area is a 30 plus block industrial zone anchored by the Brooklyn 

Army Terminal, Industry City, Liberty View and the future South 

Brooklyn Marine Terminal, where companies employ many neighborhood residents. Many more small factories and warehouses 

intermingle with housing on the area’s many mixed-used blocks. 

More than one-third of Sunset Park residents work in some form 

of manufacturing. Relatively affordable housing stock and well-established Latino and East Asian communities reinforce Sunset 

Park’s status as a haven for small businesses, manufacturers and 

their families. The neighboring industrial neighborhood of Red 

Hook, where I live with my family and young daughter, shares a 

similar character, and a great need for similar support, particularly 

as economic recovery of local small businesses and residents has 

stretched out for years since Superstorm Sandy decimated our 

working waterfront. 

Unemployment, under-employment and lack or sector-specific 

training resources remain a major barrier for economic prosperity 

in South Brooklyn, particularly among 18–24 year olds who are 

just entering into their professional lives. We are committed to 

working with community stakeholders including local schools, community organizations, non-profits and trade or business associations to develop entirely new types of internships, apprenticeships 

and workforce training programs that blend STEM training in 

wearable technology and material science with traditional, 

artisanal apparel and textile manufacturing so that New York City 

and US domestic manufacturing can regain its foothold as leaders 

in entrepreneurship & innovation. We want to be sure that these 

opportunities are designed to attract the marginalized and underserved communities that can most benefit from them, particularly 

given fashion design and manufacturing’s historical inclusivity, 

where stars can emerge and prosper from the most unlikely places. 

We applaud The Obama Administration’s efforts to establish a 

national network of Manufacturing Innovation Institutes (‘‘MII’’), 

and are proud to be teamed locally with the Fashion Institute of 

Technology (‘‘FIT’’) in our bid for the Revolutionary Textile and 

Fiber Manufacturing Innovation Institute (‘‘RTF-MII’’). We look forward to participating in future institutes, as these sort of publicprivate partnerships are essential to long term innovation and job 

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opportunities in advanced manufacturing. The United States lost 

40% of our middle class jobs nationally during the 30-year exodus 

of domestic manufacturing, and after a catastrophic National Recession that gutted my generation’s chance at The American 

Dream, the jobs that came in their place are not comparable, or 

even enough to provide us with security that we will be able to afford to establish careers and raise our families in New York City 

for the long term. It is going to take significant, sustained public 

and private investments across administrations, with all key stakeholders working together, to restore our middle class. 

Manufacture New York also advocates for a healthy domestic 

manufacturing sector at large. Not only do manufacturing jobs pay 

better than comparable service jobs, but they currently provide 

skilled work for roughly 12 million Americans. 

Domestic manufacturers object to NAFTA-style trade agreements 

that not only outsource American manufacturing jobs to low-wage, 

unregulated countries, but they offer little in way of oversight for 

overseas labor conditions. Because of this Manufacture New York 

opposes the Trans-Pacific Partnership (TPP). 

Our objections to this trade deal include the fact that TPP countries like Vietnam are known for ongoing labor and human rights 

abuses. It’s questionable whether TPP labor standards can actually 

be verified or enforced in such countries. 

Additionally, TPP does not include enforceable provisions to prohibit currency manipulation. Deliberate currency undervaluation 

by America’s trading partners has cost the U.S. millions of jobs 

over the last two decades. TPP also guts Buy America provisions 

in U.S. law by allowing firms in any TPP country to bid on U.S. 

procurement, including Chinese state-owned firms located in Vietnam. Thus, U.S. tax dollars for apparel and textiles could go to 

China instead of to U.S. producers. 

Thank you for the opportunity to discuss the issues & opportunities around 21st century manufacturing in New York City. 

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‘‘The Empire Strikes Back’’ 

Good morning and thank you to all for inviting me to testify before this committee. I am Mike DiMarino, President of Linda Tool. 

We are a second generation family owned manufacturer of precision machined components and assemblies located in Brooklyn, NY. 

Linda Tool has been located in Brooklyn NY since its inception in 

1952. Manufacturing in New York has always been as much of a 

challenge as it has been a blessing. New York has always enjoyed 

a rich history of manufacturing and cutting edge technology. Most 

people don’t realize that New York is the proud owner of the Coleman gas lamp mantle. It was invented on Canal Street NYC. The 

company today, Navis-Global, is still a major customer of Linda 

Tool and has been since 1964. It produces high tech cloth processing equipment and Linda Tool makes components that no other 

company has made. NY was also home to the largest manufacturer 

of window envelope machinery in the world, FL Smithe located on 

West 44th through 48th Street in Manhattan a cutting edge technology in its day. The Bommer Hinge Co., AMF, maker of bowling 

alley equipment, Mergenthaler Linotype, CorrectoType. Even EXLax belongs to NYC. These were all companies with cutting edge 

technology at the time. 

Whether it is 1950 or 2016 NYC still is a great place to manufacture and has so much to offer. NY now boasts a robust 3D Printer 

Industry, a rapidly growing Drone manufacturing sector, cutting 

edge technology in recycling and Bio-Fuel. Honeybee Robotics of 

Manhattan was instrumental in the Mars Rover. This is all made 

possible by the opportunities that NY has to offer. Most recently 

NYC schools have placed an emphasis on the development of manufacturing skills. Linda Tool recently hired 2 graduates from City 

Tech who went through their Mfg. Engineering Curriculum. These 

2 new employees have the skills necessary to help Linda Tool move 

forward in the next phase of manufacturing. Their skills acquired 

in school coupled with Linda Tools ‘‘old world’’ manufacturing skills 

is already paying off with some great advanced technology capabilities. The schools are on the right track but need more ‘‘hands on’’ 

training in their curriculum as this would make graduates much 

more job ready. I personally would love to see an apprenticeship 

program for the manufacturing sector in place in the future. 

The challenges are many. They are difficult but you can understand some of it. Trying to marry the urban life with industrial 

production is a challenge to anybody or any city that tries to do it. 

The NYC Industrial Business Zones are one aspect that helps those 

of us trying to maintain a viable business in NY. One of the main 

challenges going forward is the loss of commercial and industrial 

property. Gentrification is probably the biggest obstacle. As commercial and industrial areas are rezoned it drives the price of the 

real estate to such high levels that economics just fail when trying 

to maintain a business. The preservation of the IBZ’s will greatly 

help with this but they must be maintained. 

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The ability to move forward in this sector of technology can only 

have good benefits for all. Linda Tool itself was once an old world, 

smoky, under lit hazardous place to be employed. Today it is a 

modern, air conditioned, well lit, well equipped manufacturing facility that boasts and average employment stay of 15 years. We 

also are one of the few, if not the only, manufacturer in NYC that 

boasts a Green Roof on the entire roof of its facility. We also have 

a wage scale that meets or exceeds our industry. And personally it 

is very satisfying to see employees of the company thrive. The higher wage scale is because of our ability to introduce higher technology into our business. This may not result in the head counts 

of yesteryear but it most certainly lends itself to a higher paying 

job for those that acquire the skills to do so. 

So looking back New York has always been a technology leader 

in many aspects. Obviously the technology has changed drastically 

and many today have no idea of some of the things that were previously mentioned in this testimony. But regardless NY was always 

a leader in advanced technology in its day. Looking to the future 

I believe there is a bright spot for us in the manufacturing sector 

as long as we preserve our industrial zones and concentrate on 

educating and training our schooled in ‘‘hands on’’ and what to expect in the working world. A good part of that is the work that our 

local development organization are doing coupled with the work 

that NYC SBS is doing. 

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Introduction 

Good Morning Chairman Chabot and Ranking Member 

Vela ́zquez and also Congressman Meeks and Congresswoman 

Clark and thank you for inviting me here today to testify. My name 

is Nekisia Davis and I am the owner of Early Bird Foods & Co., 

LLC., located in Red Hook, Brooklyn. I am honored to present this 

testimony to you today on our experience and successes as a small 

manufacturing business in New York. 

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Early Bird Foods is a small manufacturer of granola and granola 

bars. I started the company in my kitchen while managing a restaurant in Brooklyn called franny’s. If you’re not familiar with this 

wonderful place, you are missing something very special. I would 

bring granola to my coworkers and regulars, and very quickly a 

cult-like following was born. The demand was so intense that within a year ‘‘granola maker’’ was my full time job. We now have six 

full time employees and two part time employees and are currently 

adding to the team. We have many selling channels; several distributors who sell our products in the Northeast region of the US, 

Texas, Japan, the United Kingdom, and China, we sell direct to 

hundreds of stores throughout the US, and sell quite a bit direct 

through our website. 

Successes 

We have had success first and foremost because we tapped into 

something familiar in a unique way. Granola, at least to my knowledge at the time, was made with oils that I wouldn’t want in my 

kitchen, was undercooked and underseasoned. Through my 7 years 

working in some of the best restaurants in New York, I developed 

a pallet with which to approach granola in a new way. I also developed an incredible community of people during that time that 

would be integral to my launch and success, from food shop owners, 

to members of the media, and owners of small batch flea markets. 

Within the first 3 months of business, I was on the Martha Stewart 

show making granola with Martha herself, featured in the New 

York Times by friend and food writer Melissa Clark, featured in 

New York Magazine by food writers Rob and Robin, and on the 

shelves of Whole Foods Markets in Manhattan. 

At that time, small batch food manufacturing felt like it was in 

its infancy in New York, and making food in the city was quite difficult. I went from my kitchen at home to a small office cooperative 

in Brooklyn with a tiny oven where I could make about 12 bags at 

a time. I then moved to a kitchen incubator in Coney Island where 

I had to haul 50 pound bags of oats and sunflower seeds from my 

car, and then (1-2-3-GO!) bake as fast and hard as I could, package 

everything I baked, clean, pack it all back up and into my car in 

an 8 hours period. Several days later, I would do the same thing 

again. In 2011, my friend and colleague Betsy Devine of Salvatore 

Bklyn Ricotta and I got investments from friends and built a commercial kitchen in a 900 sq ft space in the Brooklyn Navy Yards. 

Within a week, we realized the space didn’t have enough power to 

run my oven and her cheese vat at the same time, so the cheese 

and granola dance began. Fast forward through 4 years of that, 

and we were able to take out business loans to build out our current commercial kitchen and warehouse where we have been for a 

little over two years. We have a lease secured for another 8 years, 

but I fear we will outgrow the space in another 2. 

Our next expansion will be continued growth, and hopefully increased cash flow to allow for purchase of materials in larger quantities at lower costs, therefore raising our profit margin. In the 

plans are health care for employees, funding transportation for employees, and a regular partnership with charities. I look toward 

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2016 and hope for reduction of waste, increased efficiency, and continuing to spread the Early Bird love as many places as we can. 

We have always been a business that people love. In our 7 years, 

we have had to do very very little reaching out for accounts, they 

come to us because of the product, because of our network, because 

of the customers who are loyal and have been since day one. We 

have never had to put money into marketing, and have just this 

year started investing a bit into PR. We are a business that has 

always been highly magnetized, and for that I feel grateful and 

blessed every day. I was raised in the Danny Meyer philosophy in 

my New York restaurant upbringing, and that is to lead with care, 

empathy, and compassion. It’s all about how you make people feel, 

most importantly the people that work for you, and then your customers. We operate from such an empowered place, we’re highly 

compassionate, stand true to our values, our mission, are dedicated 

to the brand, and want to make as many people happy as possible. 

This world is a tough one. If we can do anything to bring a moment 

of positivity into someone’s life, I feel like we’re doing a good thing. 

Challenges 

Now in all this sweet hippie granola love fest of ours, we have 

had a unbelievable amount of challenges. The first one that comes 

to mind is workers compensation insurance. The classification system in place for this seems extremely outdated when it comes to 

small batch food manufacturers. We have to pay a rate that is over 

three times the rate of a cook in a restaurant kitchen, which is a 

high risk job, because our classification is considered ‘‘manufacturing’’. I can only assume this was created to cover the risk level 

of industrial manufacturing where you could potentially lose a finger at work. Our biggest risk in the kitchen is a burn from the 

oven door. This over and over makes my head feel like it’s going 

to pop off because there’s nothing I can do and no one I can convince that our risk level in this kitchen is very low. And even if 

I could convince someone, the rules are the rules. The numbers we 

pay for workers comp are astronomical. 

Another challenge in the past has been with landlord/tenant relations. I assume that when renting an industrial property from 

someone, the basic benefits of operating in a space that is free of 

danger, maintained at least minimally, and from someone who 

cares that we survive in business, are just a given. Our space in 

the Brooklyn Navy Yards, on the seventh floor, had one freight elevator that was broken at least once a week. This put a huge damper in our business seeing as we constantly have goods moving in 

and out. There was one period of three weeks that the freight elevator was broken completely, with no communication from our 

landlord, no explanation as to what was going on, and zero concern 

about the fact that it was massively hindering our business. I had 

a purchase order from Whole Foods held up that entire time, so essentially I lost thousands and thousands of dollars in business, and 

my direct shipping was impacted as well. FedEx, as lovely as they 

are, will not walk up and down 6 enormous flights of stairs a dozen 

times so you can get all your online shipping out for the day. We 

also had to hire several people from Task Rabbit to help us bring 

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dry goods up those 6 flights to the kitchen so we could continue 

baking, every day loads of over 4000 lbs were lugged up all those 

stairs. When we attempted to negotiate a temporary break in rent 

from our landlord to balance the huge losses we faced, not only did 

he refuse, but he turned against us. We were called out by him as 

incapable business people because of our gender, and called ‘‘silly 

little girls that didn’t know what the hell we were doing’’. He eventually threatened to sue us, ruin our credit, he then doubled our 

rent, took us to court, and evicted us. I have never felt more discriminated as a woman and less respected as a business owner. We 

had no protection and nowhere near enough funds to properly fight 

him in court. This man, this landlord, who was to simply provide 

shelter and safety to help facilitate our business, was actually attempting to drive us and our businesses into the ground. 

Beyond those struggles, we always have a hard time gaining capital to make changes that would save us enormous amounts of 

money. If I could, I would invest in small equipment that would 

cause a drastic reduction in labor costs and increase my overall 

output immensely. There are much more efficient ways of doing everything we’re doing, but we just can’t afford to make that leap. I 

have taken out a loan to build our current kitchen in order to keep 

up with business, and am unable to acquire any more capital to 

continue growth, despite our stellar business credit rating and impressive annual revenue. Cash flow is growing tighter by the day, 

we are trying to keep up and grow at the same time. It’s a paralyzing feeling. I think of moving production to a co-packer all the 

time, but look into the window of my kitchen and can’t imagine losing my team. 

Conclusion 

The future of Early Bird looks so incredibly bright, despite the 

challenges we have faced and, no doubt, will continue to face. We 

are right on the cusp of what I believe is our next big growth spurt 

and to tell you that there are growing pains would be an understatement. At these times, I have to zoom out and remember this 

is one moment on a long journey for us. We are here, not in spite 

of those moments of struggle, but because of them. I look forward 

to continuing to grow our little granola company to something that 

can employ more and more, feed more and more, and carry on making the food world and my life a little richer. 

Thank you to everyone again for inviting me here today, and I 

genuinely say that I am honored. 

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TESTIMONY 

Mr. Edward Jacobs 

CTO AND CO-COFOUNDER, FXE INDUSTRIES 

U.S. Congressional Panel to Examine NYC Manufacturing 

Good Morning Ranking Member Velazquez, Chairman Chabot 

and other members of this committee. My name is Edward Jacobs 

a Pratt Graduate with a focus on Industrial Design, Architecture 

and Engineering. Most of my adult life has been spent living and 

working within New York City. Being a designer and working initially with smaller scale products one quickly recognizes the challenges of sourcing manufactures locally while attempting to secure 

reasonable pricing to allow affordability and access to product. I am 

honored to be with you today to talk about attempting to navigate 

the manufacturing community locally in NYC, nationally living in 

other states and internationally sourcing to eventually to become 

manufactures ourselves with Fxe-Industries. 

FXE is a start up focusing on transportation, and more specifically advanced motorcycle design and engineering. Our approach is 

a holistic one that bridges the gap typically found between fields 

within the realm of manufacturing. This is a modular approach to 

large scale manufacturing that will allow us to circumvent some of 

the pitfalls of highly specialized niche employment and in turn 

allow us to train and foster greater technical manufacturing abilities in house. This approach will allow us to offer accessibility of 

product so that we may open up the market to a significantly 

greater number of customers. 

We are in the process of securing 50,000 sqft of design engineering and manufacturing space. This opportunity to grow to a 100+ 

team has ultimately been afforded to us by the Brooklyn Navy 

Yard. I initially became a tenant of the Brooklyn Navy Yard 

through New Lab and it’s where I grew my first Design and Engineering company D.N.I. New Lab is a great example of an entity 

that is helping enable a very substantial evolution in specialized 

manufacturing. 

A good example of this is D.N.I’s design, engineering and 

sourcing for the Lowline. An underground park to be located at the 

base of the Williamsburg bridge that had many challenges for its 

initial stages to be completed. This is an example of a potential 

large scale architectural project with global implications. The entire project has been designed, engineered, sourced and manufactured all within New York City. The basis of this project being the 

support of plant life and public space below the surface of the earth 

is a great example of the full spectrum of manufacturing and tremendous social impact New York City can foster. 

This correlates directly with what FXE is attempting. Choosing 

to operate here in NYC with the sheer density of diversity will 

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allow us a fantastic base of talent young and older from all fields 

and walks of life to pull from. 

Being a new manufacturer and being supported by and supporting the establishments like the Brooklyn Navy Yard makes us 

very hopeful for the new positive city building manufacturing efforts growing within the 21st century in NYC. 

Sincere thanks, 

Edward Jacobs 

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‘Made in NY’ Expansion to Fashion Industry 

New ‘Made in NY’ programs catalyze growth of independent designers, production facilities, aim to build future 

pipeline of industry talent 

We are Made in NY is an economic development initiative that 

supports the City’s digital, film, theatre and broadcasting sectors, 

and last year expanded to support fashion companies as well. Made 

in NY highlights job opportunities in the various sectors, celebrates 

the growing number of New York City-based companies, provides 

access to resources and programs to help companies grow, and 

helps novices learn how to become part of the innovation system. 

NYCEDC announced significant achievements for the ‘Made in 

NY’ suite of initiatives. Over the past twelve months, the new and 

expanded programs supported by ‘Made in NY,’ including retail 

partnerships, competitions, fellowships, marketing, and financing 

initiatives, have directly strengthened the fashion community in 

the following ways: 

• Connected emerging businesses with more than 75 industry-leading mentors 

• Showcased over 150 local fashion brands to 650 million 

people 

• Generated over 450K in sales for NYC-based established 

and emerging designers 

• Awarded more than 4.5M in financing and prizes to 

emerging and small businesses 

In addition, NYCEDC and the Council of Fashion Designers of 

America (CFDA) announced the third round of winners of the 

Fashion Manufacturing Initiative grant program, a $6 million public-private partnership designed to support the City’s fashion manufacturing businesses and promote growth and innovation in the 

fashion sector. Seven fashion production companies will receive 

grants ranging from $8,000 to $250,000 to upgrade equipment and 

technology, and provide workforce training to increase business capacity, and create and preserve jobs with the City’s fashion industry. 

For 2016, NYCEDC announced the inception of new initiatives, 

aimed at further bolstering the city’s pipeline of creative talent: 

• The Made in NY Showcase, which will directly support 

the presence of local designers at trade shows. The program 

will offer a selected group of fashion designers a series of Made 

in New York-branded and fully subsidized booths and display 

spaces at the Designers & Agents industry trade show in early 

fall 2016, providing them with the opportunity to exhibit a collection of locally designed and produced apparel and accessories. The Showcase Program will also implement a series of 

exclusive workshops and seminars on various topics critical for 

successful trade show participation to Program participants in 

the weeks leading up to the industry trade show. 

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Throughout 2015, NYCEDC kicked off an array of new ‘Made in 

NY’ programs, designed to celebrate the city’s fashion legacy and 

endow the next generation of creative entrepreneurs with the resources necessary to succeed: 

Citywide Marketing Campaign 

From August through September of 2015, NYCEDC highlighted 

the ‘Made in NY’ initiative’s expansion to the fashion community 

via a citywide consumer-focused & awareness-building campaign 

showcasing nine local fashion brands, including Prabal Gurung, 

Rosie Assoulin, Alexis Bittar, Chromat, and Public School. The 

campaign spanned print and digital media outlets, including Women’s Wear Daily, Vogue, and New York Magazine, as well as outof-home media throughout the five boroughs, such as billboards, 

buses, taxi stops and street pole banners throughout the five boroughs. 

Barneys New York x CFDA: Made in New York Collection 

In September 2015 and in partnership with Barneys New York 

and the Council of Fashion Designers of America (CFDA), 

NYCEDC unveiled the Made in New York Collection, a curated 

compilation of limited-edition pieces produced entirely within 

NYC’s five boroughs and designed by seven prominent New Yorkbased brands, including Thom Browne, Narcisco Rodriguez, and 

The Row. The Collection is retailed in 18 Barneys New York stores 

nationwide through May 2016. 

Designer Certification Program 

In September 2015, NYCEDC launched the Made in NY designer 

certification, which endows qualifying NYC fashion brands with 

use of the ‘Made in NY’ logo in order to help generate visibility, 

cache, and demand for their businesses. 

Made in NY Fashion Award Presentation 

In October 2015, NYCEDC honored Andrew Rosen, CEO of Theory, with the City’s inaugural Made in NY Fashion Award. Commemorating an individual’s extraordinary impact on NYC fashion 

industry, the Award was presented during the Women’s Wear Daily’s Apparel & Retail CEO Summit, a two-day conference attracting 

the industry’s most prominent executives from around the world. 

Not Just A Label x Made in NY 

In December 2015, NYCEDC partnered with Not Just A Label 

(NJAL), a global e-commerce platform, and the Waldorf Astoria 

New York to crate a temporary retail space featuring a rotating 

collection of over 1,000 locally designed and produced apparel, jewelry, and accessory items. More than 100 emerging designers participated in the retail pop-up, which attracted an estimated 1,500 

visitors over the 10-day period. 

In addition to its newly implemented ‘Made in NY’ programs, 

NYCEDC has significantly expanded its investment in the following fashion programs: 

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Fashion Manufacturing Initiative 

In 2015, the Fashion Manufacturing Initiative (FMI), which provides grants to local production facilities to upgrade equipment and 

technology, offer employees skills training, and cover costs of relocating within NYC, doubled funding commitments to $6M, with 

support from the program’s two Premier Underwriters Ralph 

Lauren and The Coach Foundation. FMI also launched new business development opportunities for grant recipients, such as free 

industry trade show participation, CFDA designer open houses, 

and consumer-focused retail partnerships. To date, FMI has awarded $2M in grants to 19 of the City’s fashion production companies. 

Made in NY Retail Activation 

Retail activation offered a curated, rotating collection of locally 

manufactured fashion items designed by 125 emerging designers. 

This program was open to the public at the Waldorf Astoria’s 

ground floor retail space for 10 days from December 3rd to December 13th, 2015. The program aims to increase sales of NYC-produced goods, raise the profile of NYC-based designers, and create 

sales opportunities otherwise inaccessible to emerging NYC brands. 

NYC Fashion Production Fund 

In 2015, the Fashion Production Fund awarded 24 loans, totaling 

over $1.5M in financing. To date, the Fund has provided 30 loans, 

a total of $2.5M in financing at below-interest rates to emerging 

NYC-based designers in order to locally manufacture their collections. The Fund was launched in partnership with Capital Business Credit in June 2014 and provides emerging designers with 

production financing at below-market rates and flexible terms to 

cover the costs of purchase orders. Loans are awarded between 

$50,000 and $300,000 in size, with terms of 30–120 days. 

NYC Fashion Fellows 

In 2015, the New York City Fashion Fellows program announced 

its fourth class of 25 fellows, comprised of the industry’s most 

promising emerging leaders. Building on the program’s foundation 

of mentorship, networking, and educational opportunities, 

NYCEDC further incorporated professional development and skillbased workshops in 2015. To date, the program has directly supported the growth of 67 Fellows, in collaboration with 50 industryleading mentors. With strong industry support, the program is entering into its 4th year, with a new cohort of 25 Fellows for 2016. 

Design Entrepreneurs NYC 

In 2015, in collaboration with industry sponsor G-III Apparel 

Group, Design Entrepreneurs NYC (DENYC) entered its 5th year, 

with the military-inspired menswear Cadet earning the top prize. 

DENYC also increased its prize monies awarded to the competition’s winners nearly fivefold, from $35K to $150K. To date, the 

program has supported 130 emerging designers in building their 

businesses. In partnership with the Fashion Institute of Technology, DENYC is an intensive, ‘‘mini-MBA’’ program for fashion 

designers who have launched their own labels. Participants take 

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business and management modules over 3 workshop weekends and 

create and refine individualized business plans, with the aid of an 

assigned mentor. On the basis of their business plan, participants 

compete to win prize money at the program’s conclusion. 

Æ 

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