Recently, I posted about the closing of Wendy’s on Route 9. That is just a drop in the bucket for the commercial vacancy issue in Southborough.
This month, the Town reported that office vacancies are at a record high, with only 1/3 occupied. At a recent meeting of the Economic Development Committee, it was referred to as the highest rate in Greater Boston.
Worth pointing out, one large vacant building at 250 Turnpike Road (formerly the site of Kaz), is a factor in those figures which are based on square footage.
Earlier this year, critics of the Town’s efforts to revitalize downtown through zoning changes said that the focus should be on the Route 9 corridor. The issues there weren’t an unknown to the Economic Development Committee. In addition to efforts to improve downtown, they have been pursuing funding to make Route 9 more attractive to businesses.
EDC’s Coordinator Marijke Munsiff-Vegting shared:
Over the Summer of 2021, the committee submitted grant applications for 3 different projects that all focus on solving issues that were identified as negatively impacting Business Development along Route 9:
- One-Stop for Community Growth: to conduct a review of the current zoning code of Southborough’s Business Highway and Industrial zoned areas along Route 9, Provide recommendations for a zoning update for these areas, provide recommendations for implementing specific Economic Development tools, provide recommendations to improve traffic patterns that will facilitate access to businesses along Route 9.
- Executive Office of Energy Affairs: Review and Update “Wastewater Disposal Alternatives” for Route 9 sites.
- MassDevelopment Real Estate Technical Assistance: Recommend Economic Development tools and/or District Improvement Financing options for Southborough’s Route 9 Business Corridor including concrete steps for implementation.
The EDC didn’t receive the One-Stop grant for zoning, but will continue pursuing the opportunity in future rounds.
Zoning was among the issues covered in a discussion the EDC had with a guest speaker on December 6th. Commercial realtor Gary Holmes discussed the likelihood that the pandemic had forever changed the number of parking spaces that will be needed per desk in office buildings. Another issue he referred to was the need to increase the vibrancy of downtown to make it more attractive for workers of potential tenants. Upon questioning, he also confirmed that mixed-use on Route 9 could be attractive to employers.
But the main issue he highlighted was the need for sewer infrastructure. He referred to it as a long known factor that restricts commercial development in Southborough.
That ties into the grant that the EDC did receive – $45,000 from EEA for Wastewater. Last week, selectmen discussed how to handle/budget for the $12,500 match the Town has to invest to take advantage of the opportunity. An announcement from the EDC explains the Town’s intent for the grant’s use:
The grant funding, along with a local match, will allow the town to proceed with an analysis of wastewater options along Route 9. Specifically, this grant will fund a comprehensive compilation of existing septic and wastewater systems and update a study that was done in 1981 (SEA Consultants, Inc. – Evaluation of Wastewater Disposal Alternatives for Selected Sites in Southborough, MA).
The lack of wastewater infrastructure has been identified as one of the hurdles for revitalization of Southborough’s Route 9 business corridor. The intended project aims to identify viable wastewater solutions for sustainable economic development as well as diversity in residential options along the primary commercial artery of the Town.
I was going to recap more highlights from Holme’s presentation, but Munsiff-Vegting did a better job. Scroll down for that.
But first some additional notes and highlights worth sharing on the topic:
- This morning, commenters on the blog were lamenting the condition of the old Andrea’s Restaurant (241 Turnpike Road). In Holmes’ presentation, he indicated that a colleague was in the process of selling that and the adjacent property at 245 Turnpike, with another vacant building. (The properties have been owned for years by the old Volvo dealership and just used for storing cars in the lots. Rad Enterprises purchased the dealership property, but apparently not the extra lots.) Holmes wasn’t sure the latest status of the sale, but if it goes through, he believed the intent is to knock down the buildings and build a warehouse.
- Earlier in the presentation, Holmes noted that warehouse properties, which Southborough doesn’t have much of, have gone up in value at the same time that office space value (especially “Class B”) has declined. He encouraged that if Southborough had land that could be earmarked for warehouses, it would be a good move.
- Last year, Trivedi Advanced Technologies made news by buying 200 Turnpike Road for $1.4M to expand its headquarters in Southborough. They are in the news again. This time for relocating to Northborough to expand even more. In July, they sold the building to JC Grounds Management. It is currently going through a permitting process with the Planning Board to renovate and use the site for their commercial snowplowing business.
- For those of you who aren’t sure why to be concerned about vacancy rates, remember that they impact the tax burden for residents. A decline in commercial properties’ assessed values due to vacancy rates is a big factor as to why residents’ tax bills will significantly increase this coming year.
Now here’s Munsiff-Vegting’s message to the Board of Selectmen, Planning Board, and Advisory Committee about the presentation. In addition to a recap of Holmes’ points, it includes her thoughts to them on other context and necessary actions:
Most of you were unable to attend the EDC meeting [on December 6th] where Mr. Holmes was invited to speak on commercial real estate challenges and opportunities for Southborough. Mr. Holmes (a former but long-time Southborough resident) is president of R.W. Holmes Realty. His 35 years of professional experience in the Greater Boston area and more specifically Southborough, makes him a valuable resource on the current trends of commercial real estate market developments. [In the meeting] he gave a very insightful evaluation of Southborough’s Route 9, from his commercial realtor’s perspective.
I have taken the liberty to send this summary to all of you (and not just the EDC) because I believe this information and insight is important for all that work for the Town.
A summary of Mr. Holmes comments:
- Southborough’s office vacancy rate is at an all-time high: Southborough has 900,000 sq ft of vacant office space. At a current 35.6% vacancy rate it is the highest it has ever been and the highest office vacancy rate in the area. This high vacancy rate, translates to one in three buildings being empty.
- Office space has to be repurposed: Southborough has an abundance of Class B offices for which there is a low demand. In order for companies (clients) to get people back into the buildings, offices need to be upgraded with improved ventilation, outdoor spaces, and amenities.
- The Life Sciences sector is the biggest growth market in the region: The Life Sciences industry is well funded and will continue to grow. Neighboring communities are converting office space to lab space (Natick, Framingham, Marlborough, Westborough). As laboratories increase in size and their operations mature, office space will be required. (Note, companies want their office space to be contiguous with their existing laboratory location.)
- Southborough is missing out on the Life Sciences boom: Lab space needs wastewater infrastructure. Southborough does not have sewer along Route 9.The Town will subsequently miss out on any office space demand by laboratory firms. Southborough will not be considered due to proximity and desire for campus style locations.
- Mixed use housing is a must: Companies need to have viable housing options to attract employees. Corporate housing (more high-end apartments) should be looked at as well.
Communities are reconsidering their parking requirements for several reasons:
- Employers want people back in the office – but hybrid work is going to continue.
- “hoteling” – While workers are showing a preference for working from home, when they do go to their office, they want their own space and not a cubicle reservation system. This will increase the number of cubicles needed but should not drive up the number of parking spaces = more space for less employees.
- Green space has become a requirement, not just an amenity.
3 PRIORITIES TO ATTRACT BUSINESS TO ROUTE 9:
- Sewer on Rt 9 – there are no viable solutions to tie into surrounding communities. Sam Stivers (MWRA advisory member) confirmed this at the meeting.
- A vibrant Downtown is important! Southborough has great schools and a great location but potential home buyers go to Sudbury because they want walkability and vibrant places to visit, eat and shop.
- The right zoning has to be in place. Developers are averse to go through a lengthy rezoning process with municipalities. They will find an alternative location in a community where the zoning is in place.
This fact was also highlighted during a discussion I attended on the e-commerce boom in the region: Warehousing space is becoming more and more valuable (and worth more than the office building space). The boom in e-commerce has fueled the demand in various types and scale of warehousing. Southborough has the ideal location but zoning needs to be in place for any developer to come in.
This is a brief summary of the discussion that is worth watching. You can find the EDC meeting recording here. Please fast forward to 30 minutes into the meeting.
For Southborough to be effective in keeping and attracting businesses along Route 9, and seeing some significant growth in commercial/industrial tax revenues, strategic decisions and investments are needed.
Any potential Route 9 revenue will not be realized within the next year. It will only be realized when a well thought-out, project plan is developed and supported by all of the Town’s elected boards.