The city is giving a California company nearly $3 million to move to Brooklyn on the hopes it creates jobs.
TechShop — a membership-based workshop that lets people use industrial power tools, similar to how a gym lets members use exercise equipment — is opening a facility in the Brooklyn Army Terminal. The company, which operates in a dozen cities worldwide and has had recent financial difficulties, has wanted to open in Brooklyn for years, but never had the money to make it happen. But the Economic Development Corporation, which runs the terminal, is giving the company reduced rent and $2.8 million to move — the only reason TechShop can come here, a company rep said.
“It’s unbelievably helpful — it’s the whole reason we’re gonna be there,” spokesman Michael Catterlin. “The first time we announced our desire to come to Brooklyn or New York in general was 2011. We’ve never had the capital to make it a success.”
The city hopes the company’s very presence will “create more than 500 jobs in the first five years, attract $200 million in investment, and help launch more than 200 new industrial businesses,” because borough entrepreneurs who can afford memberships will get access to industrial machinery such as lathes, drill presses and laser cutters, as well as 3D printers and other new manufacturing technology, according to a press release.
“Our new partnership with Tech Shop will democratize access to the state-of-the-art tools, equipment, and work spaces necessary to not just support our city’s manufacturers but also position New York City at the forefront of advancing manufacturing,” said Economic Development Corporation head Maria Torres-Springer.
TechShop will have some role in the corporation’s Futureworks NYC program — which gives money to start-ups to manufacture prototypes, do market research, and generally grow their businesses — but officials have not worked out any specifics, according to Catterlin and a spokeswoman from the city.
Otherwise, the company will operate as a for-profit entity, officials said.
An annual pass to TechShop’s San Francisco tool library costs $1,650, not including the price of certification classes members must take to use equipment. The company will likely offer some sort of membership subsidy in exchange for the taxpayer support it is receiving, Catterlin said.
“The idea is that part of the [$2.8 million] grant covers X number of individuals to access the space,” he said, declining to talk specifics because TechShop is still negotiating with the city.
Much of the dough will go to upgrading the space and outfitting it with more than $1 million in equipment, officials said.
The city is also giving the company a break on its rent. Appraisers say TechShop’s 15,000-square-foot Brooklyn Army Terminal space is worth $11 per square foot, but the city is only charging $9.14 per square foot for the first year of the company’s 10-year lease, a city spokeswoman said.
The news comes at a critical time for TechShop, which is struggling to rase the $1 million it needs to move its flagship San Jose store after its landlord terminated its lease. The company has had trouble paying its bills in the past, mostly due to rapid expansion, founder Jim Newton told SanJo
TechShop plans to open by 2017.