In his final State of the City address after 12 years as mayor, Michael Bloomberg stood on a stage at the Barclays Center and touted billions of dollars of investments that would allow the city “to lead the innovation economy of tomorrow.” 

“Is there anyone here who still believes that New York City can’t get big things done?” Bloomberg said in 2013. “Since we’re here in Brooklyn, I’ll say it again. Fuhgeddaboudit!” 

Among the projects Bloomberg rattled off was his plan to open a 486K SF bioscience center out of a decommissioned Army base. But 13 years later, the New York City Economic Development Corp. has all but abandoned it. Only 44K SF of lab space has been delivered. 

It is just one of a series of huge investments the EDC has made in recent years that have fallen far short of their goals, clouding the agency’s financial future. 

“Especially since we're changing administrations right now and we've got a relatively young, possibly not a very sophisticated administration coming in, I think the board should understand when [EDC] is forced to make political decisions, this is the outcome 20 years later,” EDC board member and former President and CEO of Partnership for New York Kathryn Wylde said of the project at a board meeting in September 2025. 

Under Mayor Zohran Mamdani, EDC has a long list of to-dos: grow the workforce, establish city-run grocery stores, strengthen the city’s infrastructure, solve the housing crisis. 

The public benefit corporation manages New York City's $1.3T real estate portfolio and is one of the most powerful forces driving private investment and job creation in the ninth-largest economy in the world.

But EDC has been weakened after costly real estate bets by past administrations on nascent industries have left projects languishing and operating losses widening.

The agency expects to run deficits every year for the next four years, according to budget projections shared with its board in June. Its net position — calculated broadly as its assets minus liabilities — is expected to be drained from roughly $715M as of the end of fiscal year 2025 to $587M by the end of fiscal year 2030. 

Bisnow examined several years of EDC’s financial documents and annual reports, reviewed dozens of board and committee meeting recordings and minutes, and interviewed insiders involved in the agency’s projects under the condition of anonymity. The reporting reveals developments catered to fledgling industries that have led to hundreds of millions of dollars in losses.

EDC's property rental, lease and interest revenue fell by $29.3M, or 10%, in fiscal year 2025, while property operating expenses increased by $22.3M, or 22%. It reported an operating loss of $73.4M for the year.

“It doesn't seem like a lot of the projects that they're working on actually have any real demand,” a former EDC official who was involved in its South Brooklyn portfolio told Bisnow, speaking on the condition of anonymity.

Bisnow sent EDC a detailed list of questions, which officials didn’t respond to. Seth Schuster, a spokesperson for the organization, stopped responding to multiple requests for comment for this story, including via email, text message and phone call. 

Even though the agency gets some funding from taxpayers, its main source of cash is its real estate, whether that be leasing city-owned buildings and land or selling them.

Some of its biggest holdings are along the Brooklyn waterfront, where EDC has spent more than a decade attempting to revive obsolete industrial campuses into life sciences and manufacturing hubs, only to be met with leasing pitfalls, ballooning budgets and forced pivots. 

EDC has been left holding the bag on smaller projects, too.

On the Upper East Side, the city recently reacquired a site where Hunter College planned to develop a nursing school — another project initiated under Bloomberg. The college ultimately never followed through.

Fourteen years after selling the lot, EDC was forced to buy it back. The transaction occurred in December, though a deed wasn’t filed publicly until Oct. 7, after Bisnow inquired about the project in seeking comment for this story.

The project is now back to square one, yet EDC continues to double down on the idea. Hunter College is now slated to build a nursing school at the city's Science Park and Research Campus at Kips Bay with $474M in EDC funds. Meanwhile, the still-vacant Upper East Side site deteriorated in value from $253M in 2011 to $149M in 2024.

In a city where land is scarce, the administration is trying to find the highest and best use for the assets it has collected over the years. Mamdani aims to build more than 50,000 housing units on more than 100 city-owned sites, building on efforts by former Mayor Eric Adams.

In the past, EDC would lease those sites and collect rent from ground leases that bolster its balance sheet. But more recently, the city has been offering its land as a subsidy to spur development. Under the strategy, affordable housing developers can use the funds saved from land purchases to help foot the construction bill, while the city can avoid longer-term subsidies.

For EDC, that potentially means cutting off a core revenue stream. 

“If you're going to shift your strategy towards that, then you have to shift the way EDC is funded, and maybe even the way EDC works,” New York University Schack Institute of Real Estate Associate Dean Marc Norman said. “Something has to give.”

The Forty-Deuce

EDC was born from a merger between the city’s land and capital in 1991. Prior to its founding, two separate groups managed government-owned property and project financing.

With the two functions under one roof, EDC has reshaped neighborhoods and nurtured industries. Its efforts revitalized Coney Island’s amusement parks, modernized one of the world’s largest food markets in Hunts Point, built sports stadiums and expanded greenways. 

But perhaps the best example of EDC’s ability to organize private investment for public good is its very first major project.

By the time EDC was formed, Times Square’s reputation had descended from the city’s glittering theater district to one more closely resembling Gotham. In the 1980s, the area was riddled with sex work and drugs. Dozens of X-rated shops clustered in the neighborhood, and more than 2,300 crimes were committed every year in a one-block radius.

That’s when the city and state stepped in, condemning a string of properties, many of which were historic theaters. The land was then leased to private developers, who were granted payment-in-lieu-of-taxes agreements.

Under at least several of the agreements, once the PILOT expires, the developer can opt to buy back the land. 

RXR, Apollo Global Management and SL Green did just that last year. The partners paid $8M for the fee interest at 5 Times Square, a sale that cut EDC’s future collections by $238M, or 10%, according to financial documents. 

Tishman Speyer negotiated an end to the ground lease tied to The Westin hotel at 270 W. 43rd St. in 2014. Other sites, including BXP’s 7 Times Square and The New York Times Building, have agreements that have already expired or will soon, according to property records and filings with the Securities and Exchange Commission.

Altogether, 12 Times Square ground leases generated more than $83M in revenue for EDC in FY 2025, a large chunk of its $186M total, according to a list of leases.

The clock is ticking, the Citizen Budget Commission warned in 2024. The Times Square portfolio is used to maintain and subsidize the city’s ferry system — although the government watchdog has also advocated for using those funds elsewhere.

“If not for subsidizing the NYC Ferry, EDC would have more resources to devote to boosting economic growth,” Director of Housing and Economic Development Studies Sean Campion said in his 2024 testimony to the city council.  

'A Very Expensive Mess'

On the South Brooklyn waterfront, EDC operates 200 acres across four historic industrial campuses, including the Brooklyn Army Terminal.

Built over 17 months in 1918 and 1919, the project broke records for the amount of concrete poured and mixed in a day. It became the country’s largest military supply center, employing 56,000 personnel at its World War II peak. Three million troops, including Elvis Presley, and 37 million tons of supplies traveled through the Sunset Park site.

But the military base closed in 1966, and the terminal became a shell of what it once was. 

The warehouses underwent several renovations throughout the years, but the largest adaptive reuse efforts came in 2007 in the form of BioBAT, a life sciences campus created in partnership with the State University of New York.

The plans for a 486K SF bioscience center were ambitious, and early signs pointed to success. The International AIDS Vaccine Initiative signed a 15-year lease, occupying 36K SF as the facility’s anchor tenant. The city provided $12.5M to build out IAVI’s space, in addition to $54.5M in government funding for BioBAT. 

But after 12 years, just over 23K SF of turnkey and 12K SF of white-box space was delivered. BioBAT's leasing struggles were persistent, according to an EDC board meeting presentation on Sept. 30, 2025. A course correction was needed.

EDC “dramatically downsized BioBAT’s premises and sought to reset the relationship around more realistic leasing milestones,” Jamie Horton, who now serves as EDC’s deputy chief operating officer, told the board. 

The facility was cut in half to 206K SF. BioBAT's lease was amended in 2019, with a requirement that it would need to find tenants to fill 38K SF within three years and an additional 38K SF within five years, or else it would default on the deal.

To help spur leasing activity, EDC said it would inject another $50M into the project in 2021, part of a $1B investment into the life sciences sector the city pledged that year. Despite BioBAT’s slow start, the city was determined to grow the industry into one that could rival Boston and San Francisco. 

Instead, BioBAT lost several of its tenants and failed to meet its first subleasing requirement. Capital began vanishing from the life sciences industry nationwide as the pandemic moved to the rearview.

“It became fairly obvious that the check wasn't going to be written, if you know what I mean,” a BioBAT staffer, who isn’t authorized to speak publicly, told Bisnow.  

Last year, EDC and SUNY restructured their arrangement. BioBAT was reduced again to 44K SF — a sliver of what was originally proposed. 

EDC pulled out as a member of the scientific joint venture and shifted solely to a landlord role. It withdrew its $50M commitment. That “started a cascade” that also led BioBAT to lose federal funding, the source said.

EDC agreed to provide a “12-plus-month” rent abatement and fund $5M of tenant improvements, according to the 2025 presentation. The organization also waived any claim to BioBAT’s reserve, allowing the facility to fund operating losses with the remaining $3.4M of cash on hand.

“This is an illustration of what happens when EDC is forced to make a bad political deal that had nothing to do with substance,” Wylde said during the September 2025 meeting, adding that the project has been “a 20-year mess that has been a very expensive mess.”

Brooklyn Army Terminal is now covered in scaffolding as the city aims to target sustainability and climate change companies in its next iteration. The construction makes it even more difficult for BioBAT, down to just one floor, to attract tenants. 

“We now are just tenants of EDC as opposed to partners in a very strong way to build up life sciences,” the BioBAT source said. “Now we just rent from them.”

Fashion Victim

The Garment District once buzzed with the sound of sewing machines. Merchants would spend their days hauling racks of clothing up and down the streets.

In 1910, the Manhattan neighborhood produced 70% of the country's women's clothing and 40% of garments for men. But by the turn of the 21st century, those manufacturers could no longer afford the area and traveled south to seek refuge for their operations in Sunset Park. 

For EDC, this was an opportunity. Bush Terminal, a nucleus of factories in the early 1900s, had gradually declined in the years following WWII. Garment manufacturers were already moving into parts of the campus’s 15 industrial loft buildings.

Private developers operate the northern portion of the 200-acre campus, now known as Industry City. The city bought the southern portion for $8.5M in 1970.

When then-Mayor Bill de Blasio moved to rezone the Garment District, the city went all in on redeveloping the Sunset Park campus to rehouse the displaced fashion industry. EDC officials projected in 2017 that within three years, manufacturers would be offered five-to-10-year leases on 700K SF at $16 to $25 per SF.

But Bush Terminal has faced a series of delays, costing the city far more than what was originally budgeted, according to board meetings. A former EDC executive involved in the portfolio confirmed the issues in an interview with Bisnow. 

“While they had this grandiose idea, the market itself did not really call for additional flex space or light industrial space,” the executive said, requesting anonymity to avoid retaliation.

EDC hadn’t yet broken ground on what was originally planned to be a $136M redevelopment by late 2019. Construction and budget issues caused the organization to inject a total of $30M into the project in 2021 and 2022. 

EDC meeting minutes from 2023 show that the organization proposed changing the campus’s use to “many types of industrial space instead of just for garment manufacturing as previously contemplated.” Another $18.5M would be needed.

By September 2024, construction manager Gilbane’s contract alone had grown to nearly $234M. 

When asked about the budget increases, EDC Chief Infrastructure Officer Joshua Kraus told the board that the costs were due to “unforeseen conditions” and “additional work that's being done to make sure that we have the most attractive possible campus.” 

Brooklyn-based nArchitects' contract was enlarged by $6.5M to $15M. It also scored a $3.5M contract in April 2025 to create a venue for Public Records.

Public Records was publicly announced in December 2025, but meeting minutes as of April 28, 2026, say the operator still hadn’t entered into the agreement. To sweeten the deal, EDC increased its payment for preopening costs from $200K to $370K and funded a $400K reserve to be later repaid by Public Records. 

Bush Terminal has made additional progress since, signing 27K SF of leases in the first half of the year.

The former EDC executive said his hope and worries for Bush Terminal’s future hinge on how much of a priority it is for the Mamdani administration — and any administration that may follow.

“Because of the fact that you have a change of administration every four to eight years, the problem is that some of these projects, which are legacy projects, then fall by the wayside, which is what I'm going to assume is going to happen to Bush Terminal,” he said.

Philosophical Dilemma 

EDC's mission keeps expanding 35 years after its founding. Under the Mamdani administration, economic justice has become a mantra for the organization.

In addition to encouraging the construction of affordable housing, it has been tasked with policy goals big and small, from the installation of new public bathrooms to getting city-backed grocery stores off the ground.

The mayor has allocated $70M for the development and build-out of the five planned grocery stores alone. Under current discussions, EDC plans not to charge rent to allow operators to offer lower prices.

Prioritizing morality in economic development decisions isn’t a newfound principle for recently appointed EDC President and CEO Anthony Shorris.

Writing about a budget deficit facing then-Mayor David Dinkins in a 1990 New York Times op-ed, the veteran of city government posed a question that could now serve as the agency’s north star: What do the choices a city makes with limited resources say about its values?

During an event this month hosted by the Association for a Better New York, he acknowledged the challenge of finding where the pursuit of righteousness fits on a balance sheet as economic justice butts heads with economic growth.

“There will be moments when something is more one thing than the other, but I don’t think those are fundamental,” he said. “I think they’re actually both necessary to each other.”

Tanuja Adiani, an alternative investment expert who examined EDC’s financial documents at Bisnow’s request, said EDC has made shifts toward more venture capital-style impact lending, including through the NYC Catalyst Fund and the Cannabis NYC Loan Fund. 

But the potential pivot comes as core grant funding has decreased and many of EDC’s assets are locked up in highly illiquid long-term leases.

With hundreds of millions of taxpayer dollars already at play and ambitious plans in the works, the funding has to come from somewhere.

“NYCEDC will need a clear road map for how to balance these capital flows — essentially, ensuring that the high cost of developing affordable housing doesn't cannibalize the liquidity needed to bankroll grocery rollouts,” Adiani said. “The math will be the ultimate bottleneck.”