MassChallenge, the world renowned Boston-based start-up accelerator, is looking at expanding from Boston’s Innovation District into the former Health Department building in Newton Center
The Boston Globe’s Ellen Ishkanian reports here.
The Newton TAB’s Jenna Fisher reports here.
I really, really, really, like this idea.
A win-win
However, ten companies with about 4-5 employees each will need parking spaces. Not everyone will arrive on the green line.
I would love to see this work.
There are about 3 parking spaces.
Please come up with a good solution for parking, and bring MassChallenge to Newton Centre.
I’d love to see it happen.
The only thing that I didn’t understand was the article said that Mass Challenge would pay no rent, so I presume they would also be paying no property taxes either. Later in the article it said that it was an opportunity “to expand our tax base”. It’s not clear to me where the expanded tax base comes from unless they’re talking about young companies that later move up and out into other Newton premises.
This seems like a excellent use for the building and a great location for the transitioning startups, and I’m very happy the city will be retaining ownership. However, I have two questions:
1) I hope someone on the Community Preservation Committee can explain how CPA funds can be used to pay for repairs (including deferred maintenance?) to property the city already owns. I thought that was the opposite of the intent of the CPA.
2) Is rent-free really necessary? I can’t find actual financial statements for MassChallenge itself, but non-profit doesn’t necessarily mean hard up. BC is a non-profit. According to the MassChallenge website (masschallenge.org), the total current valuation of MassChallenge alumni (Classes of 2010 through 2014) is over $2.5 billion with a ‘B’, and their revenue generated was $405 million (almost half — 48% — from the oldest Class of 2010). Do they kick any of this money back to MassChallenge?
If we’re not going to charge rent, and the city is paying for the repairs, there may be other organizations, including some that had to leave the Carr School, who might want that deal. I do see how this might interest more of these companies to locate longer-term in Newton, but how confident are we that this will actually happen?
Great idea! But why this location?
@Mike: These entrepreneurial communities require an echo system — coffee shops, restaurants, bars, shops — where people can meet, conduct business, ‘bump’ into like minded folks and refuel. They also need access to experts/mentors/venture capitalists, who as Hawthone notes, live in Newton. And they need public transportation. All of that exists in Newton Centre.
And we own a building that’s currently vacant which Hawthorne says meets their needs and vision.
We’re not selling the building either, so we really need to do these repairs anyway.
@Julia: CPA dollars can be used for historic preservation. The mayor is proposing using CPA dollars to fix the roof and other exterior issues. MassChallenge will fund the build out as well as the cost of running the programs, including the programming for Newton high school students.
@Jerry: They’re a non-profit. But the economic upside for Newton can be tremendous. Program participants and their mentors will spend money in Newton Center. But the real upside comes when these young companies complete the program and look for a location to launch their own company, fresh with funding that they’ve raised that’s a major part of this program’s mission.
Is there a guarantee that they will choose Newton? No. It’s really up to us as a community to show any prospective business that were a great place to set up shop. We have a wide mix office/commercial space. We have restaurants, bars, shops, hotels, talent, colleges for interns, recreation space, culture, etc. Yes, we will need to ease our regulatory/permitting environment and we will need to create friendly housing options. But we need to do that anyway.
This is great news!
I truly do want to see a start up small business incubator in Newton, but I question whether this is the appropriate location. The business and law schools at Suffolk University prepared a report for the Economic Development Commission making recommendations for an creating and locating an incubator in Newton, which cause me to question the wisdom of investing municipal funds to fix up the old Newton Centre Library/Health Department–which is in terrible condition–and basically giving it away rent free.
I was able to obtain a copy of the Suffolk Report, which has now been distributed to the aldermen, but it is not currently available online. There is a PowerPoint presentation, however, which hihglights a number of legitimate questions about this plan. Without listing all of them, the ones that jump out at me are:
1. The report list pros and cons for a Newton owned or leased incubator. At the top of the list of cons is the “[n]eed to find enough suitable space (size, location, etc.) to house a sufficient sized incubator.” The report says that 20,000 to 30,000 square feet are required to make the incubator successful. The building in Newton Centre is only 6800 square feet, the “effective area” of which is only 4,208 square feet.
2. The second con is that the “[s]pace could potentially need extensive renovations/build out.” The aldermen have been given conflicting information as to how much the renovations will cost, but the current range just to make the building usable is between $500,000 and $1.6 million.
3. The third con on the list is “[d]ifficulties allotting taxpayer funded properties without extensive approvals/voting.” Presumably, the Mayor will need Community Preservation funds to fix up the building, which only the Board of Aldermen can approve. CPA funds can be used for historic preservation, but not for deferred maintenance. Whether CPA funds are requested, how much and for what purpose remains to be seen. There are many other competing applications for funding affordable housing, open space and historic preservation projects, and this project should be considered with the rest and not allowed to “jump the line.”
4. According to the report, access to the T is definitely a plus. Poorly situated vehicular access to the site, limited parking, small parcel size (16,000 s.f.), outdated infrastructure and significant structural deterioration, however, are all definite minuses.
5. When the building in Newton Centre was declared surplus, a Joint Advisory Planning Group (JAPG), comprised of city staff and Newton Centre residents, was convened to study the alternatives and make recommendations for the reuse of the building. The JAPG Report specifically recommended that the parcel be sold to someone who would preserve the historic building, for “a commercial/retail use … such as a restaurant, an educational center or a food/crafts market” which would also “enhance community life in Newton Centre” by, among other things, “enlivening the area,” providing “community access”, and improving “pedestrian connectivity.”
6. The JAPG specifically considered and rejected using the building for a small business incubator. The JAPG also rejected leasing the building, “because the City is not currently organized to manage commercial properties.” With respect to incubators, the JAPG Report states:
7. Last, but not least, a start up incubator only makes sense in the context of a comprehensive economic development plan, which, at present, Newton does not have. In this context, among other questions to ask is whether these start ups would have someplace to go (preferably located close to the incubator) after they “graduate” from the program. If a start up has prospects, but the only available space is across the Charles River in Needham, what benefit (i.e. return on investment) does Newton receive? And wouldn’t it make more sense to locate the incubator closer to other similar kinds of businesses, for example in or near the Chapel Street office buildings in Nonantum or almost anywhere in the N2 Corridor?
If anyone wants a copy of the Suffolk University report on start up incubators, please feel free to email me at [email protected] and I will email it to you.
Count me among those who welcome the possibility of having MassChallenge in Newton. They are an excellent organization, and we absolutely want them here. They can and will bring a new level of economic opportunity to the City, and will be a great addition.
I do however want to draw attention to Ted’s item #7 however. We now have several interesting tools in our economic development tool box (the EDIP incentive program, the possibility of an internationally recognized business incubator), but we absolutely require a robust framework and plan for economic development so so know when and how to make the most of these. We have recently lost both TripAdvisor and now Clarks due to the fact that we could not effectively find places where they could grow and reach their next goals – this at a time when the Wells Ave park is not what it could be.
The City of Marlborough recently went through an extensive economic development planning process, and their plan is a helpful template (and can be found at http://marlboroughedc.com/doing-business-in-marlborough/marlborough-economic-development-master-plan/). Part of their goal is to ensure that commercial and industrial development is doing its part to foot the City’s overall property tax bill (as well as provide regional jobs and support local business). We can do the same.
Especially when our City is facing so many other competing pressures for land, when we have not updated our zoning, and when we have conflicting visions for what the City can be in the future, we desperately need to plan for – and appropriately use – opportunities in order to maximize the benefits (or even obtain them in the first place.
So, let’s welcome MassChallenge – with open arms for the real opportunity that this is. But let’s also do so in a well thought out manner, and in a way that helps provide a meaningful foundation for other good economic development in the City.
Ted quoted the JAPG Report’s words:
“While we recognized that it would be nice to have residential, educational, small office, clean industrial, or start up incubator uses, we ultimately determined that the site was too small and many of these uses would not enliven the village after normal work hours.”
Whoever wrote those words never started a business. New businesses (and incubators, especially) full of entrepreneurs, have one characteristic in common: they spend inordinate numbers of hours working. The 9-5 concept is unknown to them. There is no such thing as “after normal working hours”, since all hours are available to them as normal working hours!
We would be well advised to allow this organization to sign a no-cost lease that would get the inside of the building fitted out with no cost to the taxpayer, while using taxpayer money to repair the historic shell of the building. After 5 years, the lease is up. Newton has a happy tenant who stays on and spins emerging businesses into Newton’s tax base or the “incubator” moves on and Newton has a refurbished building that it can rent (my preference) or sell at a higher market value because of the improvements.
And, I agree, we DEFINITELY need an Economic Development Plan to guide our efforts! NOW!
I was going to say, Sallee, read #7 and Chris Steele’s post. Then ask yourself why Needham keeps stealing and eating Newton’s lunch.
If a business incubator is supposed to have 20,000 to 30,000 Sq ft, why aren’t we promoting Rowe St? 109,000 Sq ft of land, near both West Newton Sq, Auburndale Sq, commuter rail, Mass Pike and 128. Already has a 6,000 Sq ft office building which could be used in the interim while Scott Oran or someone builds a more modern office building perhaps with those Greenstaxx modulars being proposed for Austin St. Plenty of parking onsite, and probably room for a second building that the growing companies could move into when they evolve from startup status.
Three things:
1) This is not a “regular” incubator. It is really a neo-natal unit. The proposal is for a post-graduate year for MassChallenge first-year-graduate businesses that need more time to mature to successful launching. They need extra mentoring and the mentors live in Newton!
2) MassChallenge likes the spot. They believe it suits their needs. (Maybe they would pay a little rent? Can the Mayor negotiate harder? Maybe rent can be returned for every business that launches here and stays in Newton for at least 3 years?)
3) It has been said that Newton will look deservedly foolish to every other Massachusetts town all of whom are slobbering (dribbling) to get this baby on board. We should carefully consider pampering (intended pun)MassChallenge!
Sallee, I am shocked that you of all people would be so dismissive of the recommendations of the Joint Advisory Planning Group that was specifically put together with people from the village, who presumably also know a thing or two about their own neighborhood.
Julia, I suspect it is because the city neither owns nor controls the property on Rowe Street.
@Ted and Julia: The Suffolk study and this MassChallenge proposal are apples and oranges. First, Suffolk evaluated what it would take for the city to start its own incubator, which including hiring a director and staff and the size of program/facility that would justify those expenses. MassChallenge has all that structure in place and the ability to raise money for its programming and staffing.
MassChallenge, just to be clear is an accelerator, which is to say it takes on people with specific business ideas and helps make it a reality by “accelerating” or connecting entrepreneurs with mentors. Your idea is screened by MassChallenge judges to decided if you can participate. MassChallenge has no ownership share of the these companies.
The kind of incubator the Suffolk study seemed to be talking about is more of a co-working space model, where small business owners/sole proprietors rent space to work and benefit from sharing ideas with their fellow renters and in some instances offer workshops. Rowe Street might be perfect.
Both types of faculties/programs have advantages and a healthy entrepreneurial ecosystem has both.
But, like I said, apples and oranges
Greg, just saying “apples and oranges” is about as persuasive as calling something a “red herring.” I am a member of the Real Property Reuse committee, and it will take some convincing to get me to support this at the proposed location, given all of the limitations of that site and the cost of doing the bare minimum to fix the roof when the rest of the building is disintegrating.
MassChallenge is a world renowned operation. They’ve been repeatedly been held upby the Obama administration as one of the nation’s top organizations for supporting high-growth entrepreneurs.
If MassChallenge says the size of the former library in Newton Center works for this program, who are we to um, challenge that?
Ted: (I can just hear you snarking: SHOCKED, SHOCKED, SHOCKED!)
That JAPG study/recommendation is 2 1/2 years old and nothing has transpired to see its implementation. Perhaps a Comprehensive Economic Plan could have pushed the plan along. But now we have a deteriorating asset that requires prudent attention to prevent economic and historic loss. We have a reputable company that desires to expand to Newton where they have clear assets (mentors). They will fix the inside if we fix the outside. They will commit to stay 5 years (rent-free). If they spin businesses and business into Newton, we win. If they don’t, we have the same asset, improved and sheltered from the elements, to lease at market value to another prospect. We still win. I don’t see any snake oil here. I do see the Newton achieving something very positive here. And we’re being watched as witnessed by The Globe Article!
What Sallee said…plus the JAPG study may have reflected the neighborhood’s views back then but go talk to the business owners there now. They’ll tell you they’ve been hammered by both online advertising as well as the malls along Route 9. This is an opportunity to bring energy, foot traffic and frankly, a little, hipness to revitalize Newton Centre. The Chamber organized a meeting with businesses owners to share this idea last week. They were, in the words of Karen Masterson, co-owner of Johnny’s “over the moon.”
ALSO: Here’s a link to the Suffolk Study Ted referred to
A reading of the above commentary may be an indication of why businesses looking for a place to settle find Newton to be too much of a headache. Why would any business not look beyond the Rte 95 overpass to a welcoming community literally half a mile away that doesn’t nitpick you to death?
Actually, Jane, only Ted has picked nits here. The rest of the comments are welcoming of the idea and vetting the pros and cons never hurts. Transparency and all that! We just do it online…not behind closed doors or without saying why. As an example, A certain Needham Selectman didn’t want the rail bridge replaced by MassDOT and called Newton people to tell them that. No discussion. No open blogging. Makes one wonder what his motives were/are. I’d rather meet thinkers online and duke it out in English where the only weapon is your wit and willingness to share.
Reread the posts. Most people wrote a one liner expressing support, followed by several paragraphs picking some nits. Ted’s another matter. If Ted’s opposed to something, then I immediately assume the mayor supports it. I have no idea whatsoever if that’s the case with this issue, but it’s his history.
Newton residents can continue to shoot themselves in the foot about commercial development in commercially zoned areas, but they then need to expect businesses to settle in nearby communities are more welcoming . I’m not opposed to the questions, but let’s be honest about who makes it difficult to attract businesses to Newton. In large part, it’s us – the residents.
Nah…I think asking the questions and informing the decision makers about what is important to the people who live here is OK. If we just said “come on in”, we wouldn’t be doing our due diligence. I think the problem is the morass of regulations that new businesses trying to come to Newton face. That’s where we can become more business-friendly!
Sallee-I am also not opposed to the questions.
While I think this is an exciting proposition, I can’t help but wonder how we would get past the fact that the “report says that 20,000 to 30,000 square feet are required to make the incubator successful. The building in Newton Centre is only 6800 square feet, the ‘effective area’ of which is only 4,208 square feet.” That’s a pretty big size descrepancy!
I believe the report was based on a standalone incubator. Mass Challenge has a base location, and I think one could safely assume that a satellite location would be smaller. The report studied something totally different than what is being proposed.
Let’s see if I have this straight – MassChallenge, an established, world renowned start-up *accelerator*, thinks the space and location are right for them. But people here are saying they’re wrong about what’s right for them. Because of what was said in a 2 1/2 year-old study on Newton owned or leased start-up *incubators*. Only in Newton.
What Tricia and Randy said.
Greg, I think the NNCC should play a role in bringing some of these companies into Newton. Do you meet with any of the Owners?
Go Pats!!
@Tom: The Newton-Needham Chamber meets regularly with companies considering a move here. So does Nancy Hyde, the city’s Economic Development Director.
Randy’s statement is correct. The EDC (who commissioned the Suffolk work) did not include accelerators in the scope. The initial scope was to examine more traditional stand-alone incubators.
Greg,
What happens in your meetings…do you go out and send major corporations a tape about Newton and Needham to try to entice them? Each community brings something different. Do you meet with corporations before they leave as well??
Must this Historic building continue to deteriorate while all this debate and negotiation carries on ? Will the city only repair the leaks if there is a deal ? Sounds like our school maintenance program. Angier ? Zervas? Cabot ? Let it rot until its too expensive or declared dangerous and then tear it down. Is it only about bean counting ?!!
“I believe the report was based on a standalone incubator. Mass Challenge has a base location, and I think one could safely assume that a satellite location would be smaller.” – that makes perfect sense, Randy. Thank you. Nice reasonable answer. I love when people seek to educate rather than denegrate!
I can see why Greg Reibman really, really, really, likes this idea.
Mayor Warren will spend at least $500,000 to repair a city-owned building on behalf of MassChallenge. Newton’s not going to get any rent nor are we going to get any tax revenue.
Why exactly is Newton taxpayers money being used to subsidize sweetheart deals for the business community?
Massachusetts taxpayers already spent $57 Million on fad industries like Evergreen Solar. No more corporate welfare for rich businessmen.
@Joshua, As best I can tell this building has remained empty for more than 2 years. Tax dollars being spent on since then it for what purpose? Since then, nobody has found a sustainable plan for it’s use. Now Mayor Warren comes up with a plan for a short term use that has huge upside, and we balk at it? The dollars invested either increase, or at least, maintain the buildings capital asset value, and this is a bad idea? Let’s say we sell this building. Set aside that we would be permanently selling off an asset in Newton Center, what would be the financial gain be from this? Let’s say that even a couple of these start-ups stay in Newton. What would be the gain for commercial property owners, taxpayers, and other businesses be? Then, in the end, if this doesn’t work out the city continues to own the building in a condition that makes it much more usable, and if so desired, much more marketable for sale. This is not my area of expertise, but am I missing something?
And Newton gets financial gain from MassChallenge fixing up the inside of the building (currently unusable), which could be considered a form of rent.
Or if the potential value added by the start-ups is not enough… What about the tie-in to the Newton Schools? Exposing our students to entrepreneurs and start-ups is not only good for Newton, but it’s good for our country. I believe that small business makes up close to 50 percent of our GDP, over 50% of our workforce, and over 99.7% of US employer firms. Would we not be wise to welcome advancement in this area with open arms? I see the win/win investment as an investment in our children, and our future…
Why is this building, a former city library, and a former City Public Health Department building falling apart ? Under whose ownership ? Is this city unable to maintain its properties?