Barbara Vetell wasn't expecting garden parties when she and her husband moved to Greenpoint, Brooklyn, 30 years ago. Their new house may have been a few blocks from the heart of a quaint residential neighborhood and as close to the East River waterfront as you can get in Greenpoint, with great views of the Manhattan skyline. But it was also across the street from a large Gallo Wine distribution center and down the block from several small factories and two radio transmission towers. A steady stream of truck traffic, the buzz of manufacturing and an occasional unpleasant odor were all part of living in the heart of Greenpoint's working waterfront. "We are in a mixed-use neighborhood," says Vetell. "That's something that comes with the territory."

But in recent years, Vetell and other Greenpoint residents have come to view the industrial businesses that operate on their East River waterfront--and the industrial zoning that permits those businesses to be there--as a major threat to their quality of life. To them, the M-3 zone that stretches along the river, which designates land for heavy industry, doesn't just bring sewing shops and cabinetmakers as neighbors. They could just as easily be stuck with waste transfer stations and power plants.

Just look at Greenpoint's other waterfront, along the Newtown Creek. Also zoned M-3, this part of Greenpoint is a wasteland. It's home to 17 waste facilities, the largest sewage treatment plant in the state, a dozen toxic chemical companies, several gas storage facilities, a sanitation depot, an abandoned incinerator and an ever-present stench that makes one long for the olfactory pleasures of the New Jersey Turnpike.

This April, residents' mistrust of industry reached a new low. The community discovered that Con Edison and KeySpan Energy were planning to build an electric power plant on an abandoned factory site along the East River, a block away from Vetell's house and only a few minutes walk from the center of Greenpoint's historic residential district.

"In Greenpoint, our houses are mixed in with the industry. We're right next to welding companies and feather factories. No one's upset about that," says Vetell, who is a freelance producer of television documentaries. "We just don't want any more of the junk that's in the air from power plants and waste treatment facilities."

Greenpoint ultimately made enough noise to force Con Ed to pull the plug on the power plant project, but the utility still controls the site and is now looking to unload the property. At a recent meeting organized by Assemblymember Joe Lentol, a Con Ed official told Vetell that the power company could sell to an aluminum smelting plant if it so chose. Large waterfront sites like this one are so expensive--insiders say Con Ed expects to get $26 million to $38 million in the sale--that only a high-rise apartment developer or a multinational power or waste-management company could afford it.

But Greenpoint's frustration with unchecked industry has much deeper roots, and two years ago residents took matters into their own hands. The community submitted a formal proposal to the City Planning Commission--known as a 197-a plan after a provision in the city charter--calling for the rezoning of much of its East River waterfront. The plan outlines a balance between light manufacturing and residential uses on much of the area now zoned M-3.

The 197-a plan, though, like a half-dozen others submitted around the city, is really just a wish list. It's the Planning Commission that ultimately decides where power plants should sit, where New Yorkers should live, and where the two should exist side by side. And so far, city planning officials have resisted Greenpoint's plea for a saner coexistence with industry.

Greenpoint is far from the only place where city planners have been conspicuous in their absence. New York is currently revising its voluminous zoning codes for the first time since 1961. Decades ago, heavy industry-- like copper refiners, iron smelters and shipbuilders--accounted for the bulk of New York's manufacturing jobs, and the old zoning reflects that. As a result, heavy manufacturing zoning still accounts for a full third of the city's industrial space. But nowhere in its revisions is the Planning Commission attempting to change that zoning to reflect the new reality--that most of the 250,000 manufacturing jobs left in New York are with companies that are small, nonpolluting and, in theory at least, able to be good neighbors.

And so residents in industrial neighborhoods continue to stew amid a sea of M-3s--and increasingly, they are targeting manufacturing itself as the enemy. Since the power plant fight, Greenpoint's spirit of compromise has collapsed. At an August hearing on the 197-a plan, residents and elected officials called on the city to get rid of the manufacturing zone on the river. "Manufacturing zoning along the East River waterfront should be eliminated to the greatest extent possible," testified Joe Vance, an architect, who called instead for waterfront parks and a mix of residential and commercial space. "Please take this opportunity to help us put the green back in Greenpoint."

This is not a happy time to be a manufacturer in New York City. Industrial vacancy rates are as low as they've ever been, thanks to the rapid conversion of millions of square feet of industrial space into more lucrative offices and apartments. In the feverish city economy, scores of niche manufacturing firms--from specialty food companies to furniture makers--have been flourishing and looking to expand into larger facilities. But New York has little to offer them. "I think this would be a good time for manufacturing in New York if not for the space squeeze," says Adam Friedman, executive director of the New York Industrial Retention Network, which helps manufacturers stay in the city. "We're working with 40 to 50 companies at any given time that are looking for space, and it's a difficult process right now."

The major disadvantage these businesses face is economic; they lack the clout that comes with corporate cash. But another barrier has become increasingly problematic. Waterfront neighborhoods, from Hunts Point to Red Hook to Sunset Park, are becoming hostile places for small manufacturers looking to set up shop or expand.

These areas play host to power plants, waste transfer stations (and the convoys of garbage trucks that come with them), sewage treatment facilities, and other noxious presences, all of them in tracts zoned for manufacturing. But people live in these neighborhoods, too--tens of thousands of them, often with a negligible buffer between their homes and heavy industry. Residents are angry, and scared that things are only getting worse. "There's a high rate of asthma. Little kids are being killed. These are things that we live with on a daily basis," says Majora Carter, who works with Bronx residents agitating for a cleaner environment.

Their fears are hardly unreasonable, and they have been exacerbated by an unrelenting sequence of actions by the Giuliani Administration. First came the city's late 1980s increase in its garbage-dumping fees and the subsequent decision to close Fresh Kills, which led to an eruption of new waste transfer stations in M-zones all over the city. Since 1995, the city has outlawed most sex shops--except in manufacturing zones, which also play host to attendant prostitution. M-zones have been designated areas for big-box retail and homeless shelters, too. And the latest threat to these neighborhoods comes from power companies, which, thanks to deregulation and a burgeoning demand for electricity, have been in a frenzy to build new generating plants [see "Power to the People," page 26]. In just a few years, the city's heavy manufacturing zones have become synonymous with some of the worst things a neighborhood could dread.

"Manufacturing zones have become a catchall for all sorts of other noxious uses," says David Sweeny, director of the Greenpoint Manufacturing and Design Center, a 400,000 square foot woodworking facility. "I hear a lot of people say that they are scared of preserving manufacturing zones because they fear that they'll be eaten up by waste management facilities."

While Sweeny's center employs a number of neighborhood residents among its 500 workers, that kind of relationship between manufacturers and the people who live next door is increasingly rare. Traditionally, the people who resided in these areas believed that the benefits of living near a manufacturing zone--jobs and cheap housing--outweighed the burdens. But as the city's housing crisis brings droves of young professionals who work in Manhattan, many newer residents view manufacturers as little more than nuisances--and favor new housing, shops and amenities.

In the last five years, residents living in or near a half-dozen neighborhoods zoned for heavy manufacturing have been aggressively pushing city officials to rezone large swaths of those areas for residential use, usually with local political support. Mounting pressure from voters--and small businesses' lack of clout--is likely to keep the political momentum going. Already, Public Advocate Mark Green and City Council Speaker Peter Vallone are playing to the crowd, promising that if elected mayor they will rezone manufacturing areas for residential development to help alleviate the city's housing crisis.

Urban planners warn that they are heading in a dangerous direction. Even in a city as dense as New York, they say, there is a place for residents, small manufacturers and essential noxious operations. But unless the city begins to figure out how to put all the pieces together, contends Eva Hanhardt, the director of the Municipal Art Society's Planning Center and a longtime staffer at the city planning department, businesses and residents will bring each other down. "If you don't plan to accommodate both, you're going to have a lose-lose situation," she observes. "The jobs and the industry sector will be gone."

Most New Yorkers are lucky enough to never have to think about the alphabet soup of city zoning laws. They live in areas zoned for housing, work in places zoned for offices, retail outlets, restaurants or factories, and occasionally take their kid to a ballgame in a stadium zoned for professional sports.

But to people who live next to manufacturing areas, zoning can make all the difference: whether or not 18-wheelers are allowed to barrel down their street or if they will wake up to find Home Depot looming around the corner. Frustrated residents can't do much to change the zoning they've got--at least not on their own. Proposed changes must go through a lengthy review process, and political backing is essential. The 197-a plans are merely advisory, and only one, in Chelsea, has resulted in significant action by the city.

In the end, the City Planning Commission and its 13 members, seven of whom are appointed by the mayor, must approve all changes to the zoning code. The Commission and its administrative apparatus, the Department of City Planning, can hardly be accused of being friends of neighborhoods. For the most part, big-buck real estate developers drive planning and land use decisions.

But neighborhood alliances have begun to alter the landscape. In recent years, the commission has voted to rezone manufacturing areas in Vinegar Hill, Mill Basin and Chelsea, all of them in response to residents' pleas and the political pressure backing them up. That was certainly the case in Vinegar Hill. At most recent count, there were about 52 homes and 12 businesses employing roughly 650 people in this tiny neighborhood sandwiched between DUMBO and the Brooklyn Navy Yard. Residents and manufacturers managed to coexist for decades; while the area was long zoned M-3, clusters of 19th century rowhouses were allowed to stand amid the industry as a "nonconforming use."

But a hundred years of coexistence ended with the 1990s boom in the private garbage business. First, a waste treatment company demolished a vintage church and began using the lot to park trucks. Then the city announced the closing of Fresh Kills. Residents feared that the truck lot and another vacant industrial site were likely locations for new waste transfer stations. It was also increasingly clear that their status as exceptions to the rule was not comfortable--as residents in a manufacturing zone, they faced serious bureaucratic hassles when they wanted to alter anything on their properties.

It's unlikely that anything would have happened without the help of Councilmember Ken Fisher. As head of the City Council's landmarks committee, Fisher sought to make Vinegar Hill a city-sanctioned historical district. He believed the designation would convince Joseph Rose, the chair of the Planning Commission, to rezone the manufacturing area into a residential one. And he was right: Vinegar Hill was landmarked in 1997, and it officially became a residential neighborhood the following year.

Looking back, Jerry Pressner, the owner of a company that distributes toys and novelties, says that there's one simple reason the city got involved in Vinegar Hill: "They had the politicians' ear." Pressner and other business owners in Vinegar Hill say the residents' gain was their loss. Though the businesses are grandfathered in under the old zoning, they now need special permits to expand.

The change may ultimately force Damascus Bakery to move out of the city. Edward Mafoud, the president of the pita bread manufacturer, which employs 50 workers, has for been looking to double the size of the firm's current operation, but can't add the 20,000 square feet he needs because of the zoning switch. "It's really shaved off a large piece of this area for the manufacturing sector," he complains.

In 1996, southeast Brooklyn's Mill Basin was backed into the same corner. Alarmed that the city's plan to site megastores in M-zones would result in a new Home Depot and more traffic in their neighborhood, residents and their elected officials convinced the Planning Commission to rezone 70 acres of industrial land, in an area that is home to several active businesses.

To Bette Stoltz, who heads the South Brooklyn Local Development Corporation, it all comes down to real estate, political power, and, as much as anything, people's perceptions of manufacturing. At a community board meeting last year, she was one of only two people to testify against a housing developer's ultimately successful request to rezone a former accordion file factory near the Gowanus Canal. And throughout the area, she's seen manufacturers harassed by residents. One, a vacuum cleaner bag maker on 12th Street that employs more than 100 people from the area, nearly moved to South Carolina--where officials offered 700,000 square feet of cheap space and electricity at 3 cents a kilowatt--after residents and the local community board rallied against a planned expansion.

"People don't want to feel like they live in an industrial area. They are paying so much for brownstones and rowhouses in lower Park Slope now; they want their property values to go up," rues Stoltz. "And business people unfortunately don't vote where their business is."

Given their own problems with industrial zones, it's not surprising that Greenpoint residents recommended doing away with many of the M-3 sites along the East River. But their 197-a plan also recognizes that housing and industry can coexist under the right conditions.

The community recommends two new zoning categories to balance the space needs of industry with the environmental concerns of residents. First, the plan suggests a special mixed-use district along the East River that permits only those businesses deemed to be compatible with the nearby residential area--including biotech firms as well as food, apparel and printing manufacturers that don't pollute or generate a lot of truck traffic.

In addition, it proposes a "high performance" zoning district in the areas along the Newtown Creek that are now zoned M-3. Under this framework--inspired by regulations used in Vancouver and other cities--new power plants, sewage treatment centers and waste management facilities can locate in this area, but only if they vow to be good neighbors and live up to that promise. They won't be accepted there simply because it is an M-3 zone and they are operations that have traditionally gone in M-3s; they would have to meet specific pollution-prevention criteria before they could get a permit to move in, and they'd have to continue to meet performance standards for as long as they operated.

Ron Shiffman, the director of the Pratt Institute Center for Community and Environmental Development and author of the Greenpoint 197-a plan, says their zoning proposals came about largely because community leaders in Greenpoint wanted to retain industry in their neighborhoods. He says they just felt that the existing, anything-goes zoning rules just didn't give them the protections they needed. "We need to develop a zoning that will require the industry in these areas to perform in a certain way," says Shiffman, who previously served as a member of the Planning Commission. "Their pollution must be kept below a certain level. Their noise from production must be kept below a certain level, and they must limit the number of diesel trucks they use."

Unfortunately, according to Shiffman and others who have worked on the 197-a plan, the Planning Department has not embraced any of their recommendations. Agency staff have told the community that parks don't belong into manufacturing zones, and that performance zoning would require a fundamental change in city regulations. A 197-a plan currently in the works in Williamsburg--and specifically, its proposals for creating special areas designated for waste transfer stations and megastores as well as sanctuaries where light industry could thrive--has likewise met with resistance in the form of a warning from Planning Commissioner Joe Rose that it is not likely to survive the review process.

No one knows for sure why the Planning Department has been so inflexible. Spokesperson Jennifer Chait emphasizes that the Brooklyn plans are "still under review," and that residents are "welcome to call the Department." Meanwhile, theories abound. Some planners say that the Commission is motivated by a desire to reserve potential sites for essential services that can't be located outside the city, like garbage transfer stations and sewage treatment plants. Many other observers attribute it to the agency's coziness with real estate industry, which they say results in a bias toward zoning land for the most profitable uses possible.

The Planning Department has been as unfriendly to manufacturers as it has been to community residents. A 1993 Planning Department study concluded that the city had too much excess manufacturing land, and that these areas should be rezoned. But urban planners and economic development experts have widely questioned the accuracy of this study, pointing out that most of the surplus land referred to in the study was contaminated or otherwise off-limits for development. That study continues to fuel a mistaken belief that industrial areas can be rezoned without hurting existing industry.

"City leaders don't really look at manufacturing as the future of the city," says Hanhardt. Plus, she says, from the top on down, the agency just doesn't understand that residents in Greenpoint, Red Hook, Hunts Point and other areas are actually willing to live near an M-zone as long as they can get access to its waterfront and have some basic environmental protections. "[The department] believes that manufacturing is intrinsically dirty and noxious and assumes that you can't have a high quality of life in manufacturing areas. Their assumption is that the only way you can have a higher quality of life is to get rid of manufacturing zoning. But in fact, you can have both a higher quality of life and manufacturing businesses. We just have to create land use policies and financial incentives to help businesses become better neighbors."

Advocates for manufacturers concede that there are some places where M-zones should be converted to allow other kinds of development. But they say that there has to be room for manufacturers, even in increasingly desirable waterfront neighborhoods. "We need to create viable mixed-use neighborhoods, and we need to create industrial sanctuaries isolated from noxious uses," says Adam Friedman. Manufacturers don't need to be on the waterfront, he acknowledges, but they do need to be close enough to Manhattan that they can easily service their clients--like hotels and restaurants for bakeries, financial companies and advertisers for printers, and Broadway theaters for set-makers.

If they want to be anywhere near Manhattan, it's clear that manufacturers will have to clean up their act. Environmental advocates say the city needs to offer incentives to help companies run clean--to do things like convert diesel trucks to cleaner fuels, or use low-toxicity solvents and other supplies. "We'd like to see job-generating industry, as long as it's not polluting. But we need a real effort to keep and attract industries that are good neighbors," says Omar Freilla of the New York City Environmental Justice Alliance. "It's the only way to avoid getting existing manufacturers thrown in with the same boat as waste treatment facilities and power plants."

But the responsibility for showing that they are, in fact, "good neighbors" rests with the manufacturers themselves. Along the East River in Greenpoint, for example, businesses hulk behind unsightly metal fences and brick walls, and several of them don't even have signs. It adds up to a major image problem, says David Sweeny. "A lot of time, the community only sees a brick wall and they have no idea what goes on in there," observes Sweeny. "They don't know that many of these factories make beautiful things." He suggests that industrial landlords could begin to be better neighbors just by trying to make their buildings look better.

Barbara Vetell, the Greenpoint resident-turned-community-activist, believes it would certainly help. But after the power plant episode, she isn't so sure that spruced-up factories would change what she and her neighbors fear most. "At this point, we've been in such a defensive mode with the threat of power plants or transfer stations," she says. "Thinking about the way a building looks is one of the last things on our minds."