NAIOP Testifies in Support of Umbrella Liquor Licenses for Large Real Estate Development Projects

Earlier this month, NAIOP’s Government Affairs Associate, Anastasia Nicolaou, testified before the Joint Committee on Consumer Protection and Professional Licensure in support of H. 208, An Act Relative to Large Project Based Licenses. If passed, the bill would allow owners of large real estate development projects to apply for an “umbrella liquor license” with the local licensing authority, overseen by the State Alcoholic Beverages Control Commission. Under the “umbrella license” the local licensing authority would be able to issue restricted project-based liquor licenses for restaurants. These licenses would not be subject to the quota established in the Massachusetts General Laws. They would be tied to the property, not available for resale, and non-transferable.

Currently, liquor license quotas in a city or town in Massachusetts create a barrier for including restaurants in real estate development projects, weakening the project’s overall feasibility. In her testimony, Nicolaou underscored the importance of shop/work/live to the future of retail. Restaurants are critical components to the success of mixed use developments, which create jobs, tax revenue, and community centers for their residents and municipalities.

Nicolaou also focused on the important role of local government in the proposed process.

“This legislation allows the local government to participate in the decision-making process by requiring the adoption of a local ordinance or bylaw to allow this process within their jurisdiction,” said Nicolaou. “This encourages a partnership between the developers and local government as they work together for the future economic prosperity of the community.” NAIOP was pleased to testify in support of this legislation along with representatives from ICSC and will continue to advocate for passage of the bill so that future real estate development projects could benefit from the proposed change

The Science of Success: Bus Tour Recap

This post was written by BLDUP and originally appeared on their site.

Now in its 16th year, the NAIOP bus tour took several hundred CRE professionals on an info-packed trip through Waltham, Watertown, Newton, and Needham last week. The theme of the tour, the science of success, highlighted the continued growth of the 128 corridor as a hub of innovation in both the tech and life science fields. With the strong talent pool coming out of the areas many top colleges and universities, companies look to Boston to plant their flag. However, with extremely limited availability in Cambridge and rents continuing to rise, Boston’s tech highway is a more affordable option. All of these employees also need housing options, spurring development in the multi-family sector. Despite a few hiccups along the way (I survived the fabled orange bus) it was another enjoyable and educational NAIOP program.

Highlights of the Tour

225 Wyman
As part of the Hobbs Brook Office Park, 225 Wyman will be the largest contiguous Class A office building along the Route 128 “technology belt”. Currently, demo is wrapping up on the site and construction is set to be complete in 2021. The building, designed by Gensler, will include both office and lab space and the “H” shape of the allows for many leasing configurations.

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A rendering of the upcoming project at 225 Wyman Street.

828-830 Winter Street
Many life science companies in the market for space, need it ASAP! Looking to fill this type of demand King Street Properties has been building lab buildings like 828 Winter Street on spec. 828 Winter, completed in August 2018, is outfitted with a full MEP structure and column spacing to allow for an 11ft lab bench. The King Street team also discussed their upcoming project, Nexus Allston at the Allston Innovation Center. Currently, under review with the City of Boston, the development would include 3 buildings to feature office/lab, retail, and residential space. King Street expects to complete permitting by the end of this year and have first units/space ready for occupancy in Q1 2022.

Gauge
Hilco has completely renovated this 1940s-era brick-and-beam structure to provide creative office and R&D development space. Historic features of the building including high ceilings with expansive windows, skylights, and exposed brick interior walls. Utilities throughout the project were upgraded and a fitness center added to meet modern tenant expectations.

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Bus tour attendees arrive at The Gauge in Waltham.

Elan Union Market
Developed and Managed by Greystar, this 282 unit project welcomed residents in June of last year and is currently wrapping up construction on the final residences. The luxury development features numerous amenities including an art gallery, pool, and resident lounge. The project is currently 55% occupied and 75% leased.

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One of the resident lounge areas at Elan Union Market in Watertown.

Kendrick
At The Kendrick in Needham, the development team at Toll Brothers set out to create a not-so-typical apartment community. Their goal was to design a building with a high-end residential hotel feel that “made you look” with unique artwork, amenities, and finishes. Amenities at the Kendrick include an outdoor beer garden, fitness center with climbing walls, and a revolutionary coffee maker that allows residents to order coffee from their phones (said to cost around $10,000!).

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One of the many unique common spaces at The Kendrick.

Northland Newton Development
Our final stop of the day was at the historic Saco-Pettee Mill building to hear more about Northland’s vision to create a vibrant live, work, play gateway in Newton’s Upper Falls.  The proposed project calls for 800 residential units, 173,000 square feet of office space, and 115,000 square feet of retail. 9.8 acres of open space within the development including 7 parks will provide ample green space for residents and visitors and a new streetscape will allow for easy access for pedestrians and bicyclists. By converting an aging, obsolete industrial complex into a dynamic community, Northland aims to promote smart growth within Newton.

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A rendering of the proposed Northland Newton Project.

NAIOP Joins Mass. Municipal Association, Housing Advocates and Business Leaders in Support of Housing Choice Legislation

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On May 14, NAIOP’s CEO Tamara Small testified before the Joint Committee on Housing in support of H.3507, An Act to Promote Housing Choices. If passed, the bill would enable cities and towns to adopt certain zoning best practices related to housing development by a simple majority vote, rather than the current two-thirds supermajority.

Small testified on a panel with representatives from a coalition of groups responsible for permitting and building housing throughout the Commonwealth including Jon Robertson, Legislative Director at the Mass Municipal Association; Benjamin Fierro III, Counsel to the Home Builders and Remodelers Association of MA; Greg Vasil, CEO of the Greater Boston Real Estate Board; Robert Brennan, President of CapeBuilt Development; and Kathleen Franco, CEO of Trinity Management. The group expressed their strong support for the bill, which would make it easier for communities to enact local zoning changes that encourage housing development.

In her testimony, Small underscored the importance of partnerships between developers and the communities. “Any successful housing development requires a partnership between the developer and the community to ensure that the project addresses local needs,” said Small. “The legislation preserves that partnership by requiring a majority vote, while making it easier for communities to rezone property to encourage more housing production.”

Throughout the hearing, mayors, housing advocates, and business leaders, including Mayor Kim Driscoll of Salem, Mayor Joseph Curtatone of Somerville, the Metropolitan Area Planning Council, the Smart Growth Alliance, CHAPA, and the Massachusetts Business Roundtable testified in support of the bill and called on the Joint Committee to report H. 3507 out favorably.  

NAIOP will continue to advocate for passage of the bill as soon as possible. Because communities enact zoning changes at annual Town Meetings, quick passage of this bill is needed to ensure that implementation of these important reforms is not delayed another cycle.

NAIOP Files Amicus Brief in Marchese v. BRA: Brief Urges SJC to Uphold Superior Court’s Decision in Favor of BPDA

Law firm WilmerHale recently filed an amicus brief on behalf of NAIOP Massachusetts, The Commercial Real Estate Development Association, in the case of Joseph Marchese vs. BRA.  The amicus brief urged the Supreme Judicial Court to affirm the Superior Court’s decision in favor of the Boston Planning and Development Agency (BPDA), formerly known as the Boston Redevelopment Authority (BRA).

NAIOP chose to pursue this opportunity because the case addresses the “demonstrations clause” of the urban renewal statute, a critical economic development tool, which is often used for artistic, cultural and historical preservation in the City of Boston.  NAIOP believes that if the BPDA and similar agencies cannot use their statutorily granted powers of eminent domain to carry out demonstration projects and plans, it could chill development throughout the Commonwealth.

“We are grateful to the incredible team at WilmerHale for their work,” said Tamara Small, CEO of NAIOP Massachusetts. “Joseph Marchese vs. BRA has wide reaching implications for our industry and all of Boston. The BPDA’s success in this matter will benefit Boston’s continued economic development, as well as positively impact the City’s communities and public spaces alike.”

The WilmerHale team involved in the matter was led by Partners Keith Barnett and Michael Bongiorno and included Senior Associate Arjun Jaikumar and Associates Matthew Costello and Julia Harvey.

Oral arguments began on Thursday, May 9.

BPDA Director Brian Golden Speaks on Boston’s Development Climate at NAIOP’s Government Affairs Luncheon

This guest blog post was written by Meghan Doherty of BLDUP.

At a recent NAIOP Government Affairs program, hosted at the office of Nutter McClennen & Fish, Boston Planning and Development Authority (BPDA) Director Brian Golden discussed Boston’s current development climate and the upcoming planning initiatives his office is pursuing.

Director Golden opened with a brief history of the BPDA crediting Mayor John B. Hynes for starting the office in the late 1950s. During that time, as the middle class was moving away from cities into the suburbs, Boston saw its population drastically declining, which led to the creation of the Boston Redevelopment Authority. The newly created entity was tasked with promoting development in order to attract economic investment in Boston. It worked. Between 1980 and 2010, Boston’s population grew at a rate of around 1,500 people each year. Since 2010, Boston’s population growth has skyrocketed gaining around 8,000 additional residents each year.

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In fact, Boston’s rapid growth in the past 10 years has led to the BPDA adjusting its population projections. In 2014, just over 709,000 citizens were projected in the City of Boston by 2030. Revised projections have increased that number to 759,000. This population growth is driving development and planning throughout the city. Since Mayor Walsh has taken office, around $50M new square feet of development have been approved. Mayor Walsh’s administration has also increased the city’s housing goals from 53,000 to 69,000 new units of housing. Currently, Boston is ahead of pace for this goal since much of the development in the past few years has been residential.

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Director Golden also discussed the importance of the IDP requirements currently in place to bring middle income and affordable housing to the city. Since the IDP program began in 2000, nearly 2,600 income-restricted housing units have been built and over $137M has been raised in the Inclusionary Housing Fund. When asked about the possibility of increasing the IDP requirement from the existing 13%, Director Golden cited two examples from recent trips to Seattle and San Francisco. In San Francisco, IDP requirements are high, around 20%, and this burden has halted many projects. This policy, Director Golden believes, is an overreach. As he said, “20% of nothing is nothing.”  In Seattle, however, the IDP requirement is 11% and working well. His goal for Boston is to ensure that projects can move forward while also providing for the maximum amount of housing the market will allow.

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Other highlights from Director Golden’s presentation included:

  • New projects are increasing property tax revenue for the city at a record pace, and these are benefits that flow to all Bostonians. For 2019, the BPDA estimates an additional $77M in tax revenue from new projects alone. These funds are crucial to the city budget to maintain the high quality of life Boston residents expect.
  • Diversity is top of mind for the BPDA’s actions in the city. All RFPs for public land will include criteria to promote diversity and inclusion. The BPDA expects to see a robust plan for diversity and inclusion through all phases of the development including the development/design team through the workforce building the project.
  • The BDPA’s  Resilient Boston Harbor initiative, which will kick off public engagement this month, will focus on how all different types of existing and new projects can deal with rising sea levels. The BPDA’s goal is to use this opportunity to elevate the public realm. Golden cited Moakley Park as an example. Plans here will rework Columbia Road and Day Boulevard to build a natural barrier to deal with the predicted sea level rise while also creating a world-class park. 10% of the city’s capital budget will be devoted to building out pieces of elevated public infrastructure like this project.
  • The BPDA currently is working on 16 major planning initiatives across the city. A full list can be found here http://www.bostonplans.org/planning/planning-initiatives

During the Q+A, when asked what the biggest hurdles are for Boson to reach its 2030 goals, Director Golden cited transportation and affordability. Currently, his office is working on the Go Boston mobility study and stressed that ensuring quality public transit will be key to ensuring continued growth.

Director Golden’s presentation was a thorough overview of the state of development in Boston. It gave a positive view of the future of Boston’s economic and community-oriented future, and his comments gave attendees important insight into the goals of the BPDA over the next few years. It is clear that Director Golden has a holistic understanding of the landscape in Boston, and will continue to work with NAIOP members and other key stakeholders to plan for Boston’s future, while respecting its past.

The Time to Act on the Housing Crisis is Now

This post was originally published as an op-ed in Banker & Tradesman on 3/17/19.

Apartment-InteriorSometimes data can simplify even the most emotionally charged and complicated policy debates. Housing policy is no exception to this rule. Recent data may provide some clarity on how we got to where we are today, as well as how we can begin to address the current housing crisis 

Today there are more people working in Massachusetts than at any other time in the commonwealth’s history. According to the University of Massachusetts’ Donahue Instituteby the year 2040 the Massachusetts population is projected to increase by 600,000, with the fastest increase projected in Greater Boston’s inner core. Boston’s population is growing more quickly than previously expected, with 759,000 residents expected to live in Boston by 2030.  

As a result, the Metropolitan Area Planning Council (MAPC) projects Eastern Massachusetts will need 435,000 new units of housing by 2040However, according to the Massachusetts Housing Partnership’s Center for Housing Data, annual housing production is only about half of what it was in the 1960s, 70s and 80s. Massachusetts permitting is 36 percent less housing than the national average (based on new housing per capita), ranking us 38th in the nation 

Words Not Enough to Address Crisis 

At the current pace of housing construction, the commonwealth will be more than 90,000 units short of demand by 2030  

At the same time, permitting requirements have become more onerous with local rules and special bylaws, making the development process longer and more unpredictable. Appeals frequently delay the start of a project by one to two years or often kill the project altogether. To complicate matters, construction inflation is at 6.5 percent in the Boston market – higher than the rest of the nation.  

The lack of housing is now approaching crisis level. The number of communities with median prices above $1 million has doubled in the past decade. As a result, the shortage of workforce housing is now significant threat to our economic growth. Business leaders frequently struggle to attract the best talent when competing with other states that provide more affordable housing opportunities.   

While tackling this issue will require a multi-pronged approach, the data show that this is, in large part, a supply and demand issue. Without more housing production it is becoming very clear that the state’s potential to grow its skilled workforce will be at risk.  

Many Massachusetts communities are now recognizing, some for the first time, they need to do more to encourage growth. The 15 members of the Metro Mayors Coalition late last year announced a target to create 185,000 new housing units across the region by the year 2030. It is a laudable goal and these communities should be applauded for their leadership. However, simply saying you want housing does not create itActionable steps are needed to achieve this goal.   

Fortunately, An Act to Promote Housing Choices (House Bill 3507), recently filed by Gov. Charlie Baker, provides a clear framework for cities and town to encourage new housing production.   

 Bill Helps Communities That Want to Change 

The legislation, which is supported by a broad coalition including the Massachusetts Municipal Association, NAIOP – The Commercial Real Estate Development Association and the Smart Growth Alliance, among others, makes it easier for communities to work with developers to encourage sustainable growth.   

The legislation allows cities and towns to adopt certain zoning best practices by a simple majority vote, rather than the current two-thirds supermajority. This would be allowed in situations where the zoning change will encourage more concentrated development including the adoption of 40R “Smart Growth” districts or starter homes, reduced parking requirements, accessory dwelling units and/or reduced minimum lot sizes.  

This legislation also includes a provision, added during the last legislative session by the Joint Committee on Housing, that would reduce the voting threshold for a local special permit to a simple majority. This would apply to multifamily or mixed-use projects with at least 10 percent affordable units that are near transit or in commercial centers.  

While there is no one silver bullet to solving the housing crisis, the supermajority threshold has long been a barrier for needed housing developments throughout the commonwealthThis legislation would make it easier for communities to rezone property to encourage more housing production  

During the legislative session that concluded in July 2018, the bill came close, but did not pass.  Since then, housing advocates, planners, developers and municipal officials have come together to support the passage of this legislation. On behalf of this remarkable coalition, we urge the legislature to pass this bill as quickly as possible. The time for action is now.  

CoWorking: Collaboration, Configuration and Considerations

This guest blog post was written by Meghan Doherty of BLDUP.

Elisif_20190130_3367The Coworking industry grew 50% between 2016 and 2018 and the variety of options within this market segment is staggering. Boston is no exception, currently, there are around 2.3 million square feet of coworking space in Boston and Cambridge. Last week NAIOP Massachusetts hosted a lively panel discussion covering all things coworking. The panel was moderated by Kristin Blount of Colliers with guests Jessica Hughes of Tishman Speyer, Bryan Koop of Boston Properties, Karina Silvester of Gensler, and Craig Robinson of WeWork.

Aaron Jodka, Chief Economist/Director of Research at Colliers International set the stage for the panel by providing some stats on coworking in Boston and around the globe. While Boston has one of the fastest coworking markets in the country, London and NYC have the largest total markets with WeWork as the single largest tenant in each market. Jodka and his research team certainly expect coworking to continue to grow while lenders in capital markets determine how best to handle deals involving coworking spaces.

As the market grows, traditional office landlords are finding ways to get into the coworking game. Jessica Hughes & Brian Koop discussed how their companies are moving into the coworking space by transforming some of their limited vacant space into a coworking option. Tishman Speyer’s coworking product, Studio, will focus on hospitality and tenant service. Their first foray into this space just opened at Rockefeller Center in NYC with the next location coming to 125 High Street in Boston. Tishman Speyer is working with Gensler on the fitouts for these spaces to ensure a high quality of design.

Boston Properties has transformed a floor of the Prudential Center into Flex – their version of coworking, which is less about shared space and more about more flexible lease terms and ready-to-occupy space. Koop told the crowd the new space has been very popular, being fully leased in its first 1-2 months. As Koop mentioned, the average lifespan of a company is getting shorter and the market is moving away from the “long and strong” leases of old. The goal of Flex is to cater to clients looking for leases in the 1-5 year range.

WeWork, now the We Companies, has been the leader in the space and continues to grow their brand across the globe with locations now in 100 cities. Craig Robinson, WeWork’s new Global Head of Powered by We Services, discussed some of the stats behind the company’s mission to “Create a world where people work to make a life, not just a living”. Generally, 85% of employees are not engaged and around 51% are on the lookout for another job. Employers are finally beginning to realize that the future of work is going to be measured by how people feel and not by the old standards of productivity. Many Fortune 500 companies are already getting ahead of this trend with over 150 of them signed on as WeWork Enterprise members. Enterprise services allow these large companies the ability to offer more creative environments, the flexibility to have offices in multiple cities and the freedom to grow to new markets.

From a design point of view, Karina Silvester of Gensler discussed the broad variations of coworking space. Within this spectrum, there are a few common factors including the need for lots of flexibility along with varied activity-based workstations.  Gensler has designed numerous coworking spaces both large and small including the new Reebok headquarters in Boston. For their new space, Reebok wanted a more open plan/flexible space instead of the numerous small offices they had in the past. As Karina also pointed out “the desire to cowork will extend to digital realms as people are working all the time.”

The panelists agreed the coworking model is here to stay and even in the event of a downturn flexibility will prove important. WeWork continues to diversify its portfolio and offerings and other commercial landlords are following suit as the market shifts. Employee expectations are changing and to attract and retain top talent, employers and in turn, landlords are moving to this flexible, community space.Podcast_Ep1

Can’t get enough coworking? Craig, Karina, and Kristin continue their discussion on The Big Dig, BLDUP & NAIOP’s new CRE podcast. Listen now!