After losing its anchor tenant in the mid-1980s, the Brooklyn Navy Yard struggled to be a viable center for manufacturing and industrial jobs. The number of tenants dwindled, and the physical plant declined. In the late 1990s, after years of neglect, one of the piers collapsed into the East River, a rare loss of waterfront property in a city where space is typically added, not subtracted.

Like many of the Brooklyn neighborhoods surrounding the facility, the Navy Yard is experiencing a turnaround. The development corporation that controls the city-owned property reports about a 1% vacancy rate for the area’s 4 million square feet of manufacturing space. The Bloomberg administration is sinking $200 million in infrastructure improvements into the 300-acre plant in the next three years, and there is a long-term plan to expand space by 50%. Last week, Mayor Bloomberg attended a groundbreaking for 400,000 square feet of space in six new buildings.

The president of the Brooklyn Navy Yard Development Corporation, Andrew Kimball, calls the city’s investment “deferred maintenance from the last 50 years.”

He said public investment to repair the piers, roads, sewers, windows, roofs, and electric supply, as well as for “greening the yard,” would attract private investment in new buildings. Mr. Kimball said the planned expansion would supply a growing New York City population with certain goods and services that “just can’t be trucked in from the suburbs or shipped in from overseas.”

The 300-acre plant is still a rag-tag mixture of about 80 buildings, a loose collection of warehouses, docks, piles of raw materials, and abandoned, out-of-date machinery. It houses the city’s tow pound, a packaging plant for Sweet’N Low, a landmarked Naval hospital dating back to the Civil War, and some newer additions, such as a wedding space with views of Manhattan inside the shiny, modern building belonging to Steiner Studios, and recently renovated offices equipped with state-of-the-art industrial design gear.

First established as a shipbuilding facility in 1801, the Brooklyn Navy Yard reached its peak during World War II, employing 70,000 people, the largest employer in the borough. The Missouri, the ship on which the Japanese formally surrendered, was built there, as was the iron-sided Civil War vessel the Monitor, and the Maine, whose sinking off Havana led to the start of the Spanish-American War.

In 1970, the city bought most of the property for about $22 million from the federal government as the Navy moved its operations elsewhere. The city turned the area into an industrial park, but it struggled to preserve a critical mass of tenants, as industrial and manufacturing jobs fled the city for cheaper rents and lower wages in the suburbs and overseas. In 1986, the city’s largest tenant, the Coastal Dry Dock and Repair Company, declared bankruptcy, costing the city about 8,000 jobs. At a low point, about 40 habitable buildings contained as few as 35 tenants and about 1,000 jobs.

The Navy Yard’s new tenants are not the heavy industrial jobs or small-time textile or hand tools trade that were once prominent. Now, there is a higher concentration of industrial design firms, food processing businesses, and artisans, along with a growing film and television production industry. There are now about 230 private-sector firms providing 4,000 full-time jobs, with about half belonging to Brooklyn residents.

The owner of Pierless Fish Corporation, a fish processing and wholesaling operation, Marc Agger, has been a tenant at the Brooklyn Navy Yard for 19 years. In the early years, he said his truck tires went flat on a weekly basis due to a virtual carpet of rusty nails on the industrial park’s roads. Mr. Agger now has an agreement with the city to take on an additional 20,000 square feet in a vast, vacant factory that will serve as a food processing facility.

“They couldn’t really get their hands around this place. It is a monster,” Mr. Agger said, gesturing to the vacant space his business would someday occupy. “Either a monster problem or a monster opportunity.”

He said his business, which collects and processes fish caught between Florida and Newfoundland, needs to be close to New York City, home to about half of his clients, including some high-end Manhattan restaurants.

Some of the newer tenants talk about the benefits of cheaper space, tax incentives, proximity to Manhattan, and good parking.

The director of finance for Crye Precision, an industrial design firm that makes Kevlar vests for the Department of Defense, Karen Chen, said the rent is about half of what it was in its former location at the Chelsea Market building. The company has expanded within the Navy Yard two times. Ms. Chen said she received tax credits worth about $50,000 a year.

Some critics of the administration have said the city should give bigger subsidies to preserve manufacturing businesses, which are under stress with rents rising citywide amid a wave of residential conversions and new construction. A strict separation of industrial and residential uses, they say, deprives the city of colorful mixed-use areas, which have traditionally been popular with the city’s artistic community.

The director of the mayor’s office of industrial and manufacturing businesses, Carl Hum, said the number of manufacturing and industrial jobs in New York has shrunk to about 500,000 from about 1.7 million in 1960, but he expects that number has stabilized. The city and state offer incentives for the some of the businesses in the form of relocation grants and credits based on the number of employees. In addition, the city has set aside 16 industrial areas where it has agreed not to seek residential rezoning.

The executive director of the New York Industrial Retention Network, Adam Friedman, said much of the loss of industrial and manufacturing jobs has been inevitable.

“Every industrial company in New York City would save money by moving out, but they can’t,” he said. “If these companies couldn’t locate in New York City, they would probably be out of business. They need to be in the center of their market, and they are willing to pay a premium for that.”

Mr. Friedman applauded the city’s investment towards improving the Brooklyn Navy Yard, but said the problem is that the model can not be duplicated elsewhere, where the land is privately owned.

“The owners would get more money from residential conversion,” he said.