NEW YORK — Developers are pulling their proposal to rezone Industry City — a mega project that would have transformed part of the Brooklyn waterfront and brought thousands of jobs, according to developers — after the local councilman and some community members opposed it.

Andrew Kimball, CEO of Industry City, announced Tuesday night that developers will lease out office space and buildings at the location instead of continuing to pursue expansion, which would have required rezoning.

In a statement, Kimball blamed a lack of leadership for the end of rezoning efforts.

"Over and over, we have heard from key decision makers that while the substance of the project is strong, the politics of the moment do not allow them to support any private development project. Even the historic nature of our commitments - which significantly elevated the bar for future development projects - and a seven-year record of creating jobs and opportunity weren't enough to overcome purely political considerations,” he said. “Sadly, in the context of one in five New Yorkers losing their jobs and the City's fiscal crisis spiraling out of control, the leadership needed to approve this development failed to emerge.”

In the announcement, Industry City said it began to reconsider the rezoning bid in late July.

The Industry City site is a complex of warehouse-style buildings once known as Bush Terminal. The complex has been renovated, building by building, to attract retail outlets, tech companies, food manufacturers, and the Brooklyn Nets training center. 

Industry City wanted to expand beyond its 16 buildings and needed a city approval to make that happen. The developers argued their plan would have resulted in 20,000 jobs and partnerships with colleges.

“We hope at some point in the future when the economy starts to come back we can build ground up buildings that would be similar in size and shape and height of the existing buildings today and take us from 8,000 jobs to over 20,000 jobs," Kimball said last month.

But the plan started to crumble after the local councilman, Carlos Menchaca, announced in July he opposed the rezoning.

"This is not the time for a luxury mall to rise up and grow on the working waterfront in an industrial zone,” Menchaca said.

Progressives argued the plan for retail and hotels in the working-class neighborhood is outdated, particularly with the coronavirus pandemic, and that similar economic development promises made by other mega projects like Atlantic Yards and Hudson Yards were never realized. The community group UPROSE opposed the project. It said jobs related to climate change should be created there.

"The future of offices and retail and high-end luxury hotels shouldn't exist in an industrial sector," Elizabeth Yeampierre, the executive director of UPROSE, said in August. “That should be happening in other parts of the city. And our industrial sector really should be building for that climate future."

The City Council's approval was required under the city's land-use review process. Industry City said that given the job losses in the pandemic, the project was too important to die. It submitted letters to Council Speaker Corey Johnson urging his support.

"The corporate playbook is always going to disrespect local community interests," Menchaca said. “That's why they're going out and talking to the speaker and other City Council members to get them on board. Not only is it disrespectful, it's also undemocratic."

Under Council custom, members can kill rezoning proposals in their districts. But as speaker, Johnson can override a local council member's opposition.

But there were questions whether Johnson, eyeing a run for mayor, would be willing to anger progressive Democrats by pushing the project through.

The City Council's Land Use Subcommittee held a virtual public hearing on the plan last week. Industry City presented its rezoning plan to the subcommittee as part of the land-use review process. Hundreds of people, both for and against the mega project, turned out to testify.

The rezoning proposal could have reached the full Council as early as next month.

Industry City had implored City Council leaders to overrule Menchaca’s opposition, and contacted Johnson and other elected officials outside the district for support, arguing the project is necessary, especially during the pandemic.

“We’re ready to get to the table. I think that most folks in Sunset Park really care about the future, they care about jobs, they care about opportunities for their children, and they want to see growth. They think that a deal is better than no deal. And so we’re hopeful there will be leadership,” Kimball said in an interview with Inside City Hall Anchor Errol Louis last month. “But we’re also hardened that people across the city, Council members like Robert Cornegy and Ritchie Torres and Donovan Richards, have stepped up and said, ‘We can’t just defer this decision. We need as a body to debate this.’”

Rezonings and large development projects in New York City have come under heavy scrutiny in recent years, with (ultimately scrapped) plans for Amazon to take part of its new headquarters to Long Island City serving as a major recent flash point. Supporters cite economic benefits, while community members who are opposed to big development projects say they exacerbate gentrification.

Earlier Tuesday, Reps. Jerry Nadler, Nydia Velázquez, Yvette Clarke, and Hakeem Jeffries denounced the rezoning plan, arguing it would lead to increased rents and would “accelerate the gentrification that is eroding Sunset Park's affordability.” They called on the City Council to deny the rezoning proposal.

Several state lawmakers, including State Sens. Julia Salazar and Zellnor Myrie, also signed the letter.

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This story includes reporting from Jeanine Ramirez..

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