The developers behind an expansive rezoning planned for Sunset Park have decided to withdraw their proposal, blaming a hostile political environment and a "lack of leadership."

Industry City's decision to pull out of the rezoning comes days after ten Brooklyn lawmakers, including members of Congress, signed a letter opposing the project, arguing that ceding the rezoning to a private developer would result in the displacement of working class residents.

While Sunset Park's councilmember Carlos Menchaca had been rallying against the plan for months, arguing that soaring real estate costs and gentrification would counteract the benefit of new jobs, some of his colleagues in the council supported it, and urged the body to ignore the longstanding but unofficial precedent of deferring to the local councilmember on land use matters.

The city's planning commission had also approved the rezoning, but Mayor Bill de Blasio and City Council Speaker Corey Johnson repeatedly refused to endorse or oppose it before it went to the council for a vote.

Andrew Kimball, the CEO of Industry City, said in a statement that it had become "clear that the current political environment and a lack of leadership precludes a path forward for our rezoning proposal."

"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," Kimball said. "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."

New York City is projected to lose at least 500,000 jobs by the end of 2020 because of the pandemic, and the unemployment rate in New York City is at 16%, down from 19% earlier in the summer.

Industry City had promised that the rezoning of the 35-acre waterfront complex would lead to a huge expansion in retail, and 20,000 jobs in sectors that proponents described as "light manufacturing and tech." Industry City also pledged to build a public technical high school and a “manufacturing hub” managed by a “mission-driven nonprofit.”

Unlike the scuttled Amazon project in Long Island City, the developers—including Jamestown, Belvedere Capital, and Angelo Gordon—were not counting on massive public subsidies as part of the bargain. They first proposed the rezoning six years ago, and have faced a steady resistance from some community groups.

Yet Industry City's job projections were never broken down in detail, and they were calculated before the global pandemic hit New York and then the rest of the country, and were never revised. The pandemic has decimated the city's high-end residential and commercial real estate markets.

Representatives for Industry City did not respond to questions about how much the economic conditions of the pandemic itself affected their decision. According to Politico, Kimball told reporters last week in a call that if the rezoning failed, they would consider using the site for a "last-mile warehouse distribution facility." Kimball said in his statement that the developers will continue to pursue leasing options within the existing zoning.

Brooklyn Councilmember Robert Cornegy, one of the rezoning's supporters, said in a statement that he was "disappointed" by the decision.

"'Standing athwart history yelling stop,' is not a strategy for our communities to participate in the cutting edge of entrepreneurship and new jobs. Instead, we need to think in less adversarial, zero-sum terms and think in terms of the partnerships we can foster to increase economic opportunity for all Brooklynites."

In a phone conversation with Gothamist, Councilmember Menchaca said that Industry City's decision removes an "obstacle" to consider green jobs proposals that would maintain the industrial zoning of the site, like those submitted by the environmental justice group UPROSE.

"I'm going to be bringing ideas to the City Council for that. A lot of this is going to be connected to the capital budget, and what we do to utilize the capital budget of the city of New York to build our way through, with community driving that development," Menchaca said.

"This moment is incredibly important. This is the end of developer deference. This is the end of developers running projects through the City Council. Those days are over," he continued. "When you're looking a political trends and where politics is now, I think, showing communities want to have a role, a respectful role, and responsibility in the growth of their neighborhoods."

Menchaca added, "My message to developers is: community is where the power is at."