Commercial Development, Business, & Arts

Commercial development plays an important role in the future of Somerville as it provides revenue to support City services, brings jobs to residents that can reduce commutes, and provides a larger daytime population for existing retail and service businesses. Currently, only 17% of the city’s property tax is commercial, and only 15% of the city’s working residents work in Somerville. However, additional development to increase these ratios will require policies that optimize the city’s strengths and effectively manage its challenges.

STRENGTHS

Somerville’s workforce is one of its major strengths. One of the most important location criteria for new-economy employers is to be where the talent is. Somerville has the second-highest proportion of residents with advanced degrees among the Commonwealth’s 351 municipalities. With its wealth of artistic, musical, and culinary amenities, the city has been a magnet for millennial workers and students who provide a ready workforce for business expansion.

Somerville has emerged as a leader among cities of its size in mobilizing community, industry, and government partners to analyze and further develop this impressive workforce. The recently published Somerville Talent Equity Playbook articulates a coordinated strategy for preparing its residents for the jobs of today and tomorrow. Investment in the new Somerville High School promises to bring state-of-the-art facilities to support its lauded Career and Technical Education program. Jobs linkage – an impact fee paid by commercial developments – provides resources to fund impactful programs to prepare residents for new jobs. In addition, Somerville’s close proximity to the region’s preeminent commercial centers, research and educational institutions, and capital sources provide further incentive for workers to locate in the region as well as a proximity advantage to businesses who locate within the city. Somerville’s transit access through the Red Line, Orange Line, and the Green Line Extension reinforces this advantage. Somerville’s renaissance over the last generation has been sparked by artists, musicians, students, and other creative types transforming abandoned factories into vital centers for innovation, ideas, and weirdness. Artistic initiatives like Open Studios, Art Beat, the Nibble Kitchen, and Honk! Fest help promote and preserve this spirit of creation that has become the cornerstone of Somerville’s emerging economy. This helps to build Somerville’s national reputation as a city of innovation – another strength of our community. Wise management of the City’s commercial development will protect and extend these creative, innovative, and entrepreneurial forces.These strengths have facilitated an ecosystem of assets that provide additional incentive for businesses and artists to work in Somerville. For example, Somerville boasts the largest cleantech incubator in North America, Greentown Labs; New England’s oldest and largest makerspace, Artisan’s Asylum; and a variety of other artist studios, entrepreneurial startups, and creative initiatives. This spirit is contagious and creates a competitive advantage in a world that increasingly values new ideas and creative problem-solving.With these kinds of strengths, Somerville is poised for strong initiatives around commercial development, business growth, and further support of the arts.

OPPORTUNITIES & CHALLENGES

Commercial development provides opportunities to improve our community. By creating new tax revenue, commercial development can shift tax burden away from homeowners. Shifting this revenue would allow the City to provide high-quality services while keeping residential tax rates low.

Another opportunity commercial development offers is to increase the number of jobs in the community. Commercial development would increase the chance that more residents work in the city in which they live. This could reduce vehicle trips, strengthen community, and improve family life by reducing commute times. More commercial development would also produce a daytime population sufficient enough to support existing and new small businesses.To take advantage of the opportunities commercial development brings, a number of challenges must be overcome. Uncertainty is one obstacle that has always existed; historically, this was the concern that Somerville was not a desirable enough location to sustain commercial uses. Today, Somerville is increasingly attractive to biotech and digital technology employers, but some commercial developers remain skeptical. This can be due to the unpredictability of zoning requirements, fee structures, approval processes, environmental contamination, and community-benefit obligations. However, the advantages of Somerville may continue to outweigh these uncertainties. Somerville’s increasing desirability as a place to live and work is creating new challenges for those who wish to promote commercial development. As discussed in the Housing chapter, housing costs are rising, resulting in the displacement of many residents and a shortage of available housing stock. This causes problems for large employers looking to attract talent as well as small retail and restaurant businesses who are facing increasing challenges finding staff. Rising commercial rents are also affecting our small businesses that contribute to the very soul of Somerville neighborhoods. Smart policymaking can mitigate the role commercial development plays in these rising costs and protect the existing squares and main streets that are an important part of the Somerville community.Another challenge is preserving the artistic community in the City. Rising costs and affordability are the biggest challenges artists cite in continuing to work in Somerville and have resulted in the displacement of some artistic nstitutions already. Although there are many art events throughout the year, there are fewer permanent spaces to allow artists to display and sell their work year-round, in part because of the expense of space. The fabrication district has started to address this issue in zoning but it’s not a panacea. Somerville businesses are also dependent on larger social, economic, and consumer dynamics. Minority-owned and immigrant-owned businesses face particular obstacles in securing necessary startup capital and may require additional support to overcome these barriers. Changes in shopping behavior mean that retailers and other small businesses need to be more creative in how they attract and retain customers, but they are still typically working within more traditional permitting and licensing structures. Commercial development in some ways is a keystone. It provides direct benefits but also creates revenue that could be applied toward designated social programs to bolster community objectives like housing, workforce development programs, open space, and small business support. It could create a market for and produce sufficient municipal surplus to support the creative economy.