With Black-owned shops making up 2.5% in the health and beauty industry, Mayor Adams on Thursday announced a $25 million investment — which includes money he first allocated as Brooklyn borough president — for a business incubator hub geared toward spurring greater representation in the sector.
The AYO Labs hub, located in the Brooklyn Navy Yard, is meant to serve as a home for Black, indigenous, people of color and women-owned (BIPOC) companies, who are historically underrepresented in the health and beauty sectors. The aim is to encourage BIPOC entrepreneurs to use the space as an incubator to develop their products, with manufacturing and packaging resources on site, the mayor said.
“Your city is taking a stand, putting money back in the pockets of Black and Brown entrepreneurs, especially women of color,” Adams said in a press conference at the new space.
According to a 2022 study by McKinsey, only 2.5% of revenue in the health and beauty industries is being generated by Black-founded or owned companies.
The AYO Labs project will be completed in two phases.
The first leg, expected to be finished by 2025, will involve developing a 26,000-square-foot space to support over 100 entrepreneurs, costing about $12 million. The second phase will add another 14,000 square-feet to the space by 2026, according to City Hall.
City Hall said that project will create 900 “indirect and direct” jobs over the coming five years. An Adams spokeswoman said the “indirect” jobs are in construction required to finalize the space.
Planning around the project has been in the works for years, and funding for it will come from multiple different buckets.
As Brooklyn borough president, Adams allocated $1 million for AYO Labs, and the City Council provided another $5.5 million for it in 2019 and 2022, adding up to a total municipal investment of $6.5 million.
Yet another $4 million has been forked over by Lendistry, a minority-owned real estate lender based in California, according to City Hall. The remaining $14.5 million is being raised from private investors by R.F. Wilkins Consultants, a development and management firm tasked with operating the new AYO Labs space.
City Hall did not provide information on which private investors have contributed that money.
The only member of the City Council who joined Adams for Friday’s announcement was Farah Louis, chair of the Committee on Women and Gender Equity whose district doesn’t include the Brooklyn Navy Yard.
Brooklyn Councilman Lincoln Restler, a progressive Democrat who frequently criticizes the mayor, argued it was odd for the mayor to not invite him to the news conference, given he represents the neighborhood and helped provide some of the initial funding for the project.
“@crystalrhudson & I worked with the Speaker to invest $3.5M in this project 2 years ago. Brooklyn Navy Yard is in my district and across the street from her – yet he refuses to include us on the very projects we champion that serve our communities,” Restler wrote on X. “Quite a governing strategy…”
The Adams administration did not immediately respond to a question on why Restler was not invited.
