This article examines land use policy and real estate market activity in the 1990s in two mixed use industrial neighborhoods on New York City's East River. Based on case studies of Greenpoint-Williamsburg in Brooklyn and Long Island City in Queens, it finds that a strong adherence on the part of public officials to the principle of highest and best use, together with an incremental approach to planning and land use regulation, has contributed to opportunistic development and industrial displacement in these areas. The question of whether this trajectory is in the interests of the public as a whole remains the subject of fierce debate in the city's planning community and beyond. The article contributes to the literature on property-led economic development in central cities by engaging with the complex task of planners charged with regulating areas that not only are logical sites for commercial and residential expansion but which also serve as niches for lower yielding uses such as light industry.