Seaport Developers Promote Market-Driven, Organic Fixes To Neighborhood Affordability Challenge
Boston’s Seaport gets chided for its rapid pace of development and lack of affordability, but developers stress the market is responding on its own to the call for lower points of entry across multiple sectors.
“[Affordability] is a little bit of the elephant in the room in conversations,” WS Development Senior Vice President Yanni Tsipis said Tuesday at Bisnow’s The Rise of the Seaport event. “This isn’t only a topic of interest in the residential space. It applies to the other food groups as well.”
Boston’s Seaport District is the epicenter of the region’s ongoing development boom, but it is often criticized for unaffordability, inaccessibility and lack of character.
While there have been calls for government intervention to make the neighborhood akin to more mature ones like Back Bay and Fenway, Tsipis and other real estate players in the area stress enabling the Seaport to respond to market demands organically has been, and will continue to be, more rewarding in the long term.
Calls for affordability have resonated loudest in the housing sector. Boston’s Inclusionary Development Policy has created nearly 1,800 affordable housing units in the city since 2000. One Seaport includes 96 traditional affordable housing units, but Tsipis added it also includes 96 micro-units. These apartments still have access to their luxury siblings' amenities, but they offer lower price points thanks to their smaller configurations.
WS is now responding to criticism that the price point of entry for Seaport retail is too high for businesses beyond well-funded, national chains. One Seaport’s ground-floor retail includes For Now, a retail incubator that enables a variety of online retailers and rising brands to have a short-term pop-up shop and test the waters of the traditional brick-and-mortar experience.
“Some of these brands can be the next Bonobos or Warby Parker or some of the other real success stories we’ve seen coming out of the online world,” Tsipis said.
Across the neighborhood in the Raymond L. Flynn Industrial Park, the life science and tech communities are flocking to repurposed warehouses and new construction in what Arrowstreet principal Amy Korté described as a “march to the edges.”
While nobody would describe lab rents in the neighborhood as cheap, the ability to scale up is giving the neighborhood a reputation as a relief valve to the perpetually tight East Cambridge submarket.
“At about 20M SF of life science real estate, we are certainly the envy of every major city,” Related Beal Executive Vice President Stephen Faber said. “Cambridge is the center of activity; however, Cambridge is only so large. We believe that as a secondary alternative to Cambridge, an urban location such as the Seaport is a great option.”
Related Beal broke ground in December on the 375K SF Innovation Square, or iSQ, at 6 Tide St. The $73M project has biotech accelerator Mass Innovation Labs as an anchor tenant, which addresses affordability challenges in its own way by providing smaller biotech firms the resources they need to scale up.
While the industrially zoned area might seem like a strange place for Boston’s next life science hub, the less dense usage enables biotech to work alongside food purveyors and other traditional industrial tenants in the Flynn complex.
“The reason we’re able to do life science is because R&D is an allowed use in industrial zones, and, the fact is, it does fit because the volume of people in a typical office may be six or seven people per 1K SF. A typical lab is less than half of that,” Faber said. “By adding those kinds of uses, you aren’t adding the traffic and requirements for mitigation a more office-type use would.”
The Traffic Conundrum
Millennium Partners’ Boston branch, MP Boston, and its Cargo Ventures subsidiary are other developers in the Flynn complex, and their potential to develop in the neighborhood is locally famous for a proposed $100M aerial gondola network to help solve the market’s notorious traffic.
The two entities are pursuing as much as 1.8M SF of development on the eastern edge of the neighborhood, but it comes at a time when other neighborhood players are tackling what to do with congestion, as it is causing its own affordability issues.
The national average for ground transportation for a convention is $12K. The average price for planners to shuttle convention attendees from the Boston Convention & Exhibition Center to hotels in other parts of the city is between $350K and $450K.
“I’m not sure if the gondola is a good idea or not, but I do think it should be explored,” The Davis Cos. founder and CEO Jonathan Davis said. “A dimension of it that is really interesting is it gets traffic off the streets, and it enhances the neighborhood’s position as a tourist destination, which is important for our well-being.”
While Millennium Partners and Cargo Ventures have remained largely quiet on the Seaport gondola front, neighbors and area developers have weighed in on the potential $100M transit solution that would whisk commuters from South Station to the BCEC and Davis’ soon-to-break-ground Omni Hotel and terminate at the Millennium/Cargo Ventures property.
“We hear the words ‘creative solutions’ frequently, and I really think the gondola is a creative idea, so I’d love to see it explored in more detail,” Epsilon Associates Managing Principal Peggy Briggs said.
But not everyone is convinced. Bus Rapid Transit advocates have said the sky-high transit pitch is limited in scope and almost certain to balloon in cost when dedicated bus lanes with short headways would be a more economical way to tackle the neighborhood’s rush hour traffic. Others say the city should weigh all options before moving ahead with a fix.
“Innovative ideas are absolutely appropriate for the discussion, but you have to take into account what that means,” Howard Stein Hudson Institutional and Private Markets Director Tom Tinlin said. “If you go forward with one, what does that mean to the others?”