Pop quiz, hot shot. The Innovation District is:
A. a slice of South Boston that best represents the wider city's economic future
B. a burgeoning tech and life-sciences hub to rival Cambridge's Kendall Square
C. whatever Tom Menino says it is
D. all of the above
The answer's D, of course, though B and C might be endangering A. That is, the way the Menino administration is going about the Innovation District—big, high-end and bold—may be backward. Why? Because the sorts of tech and life-sciences firms they hope to attract—young and scrappy and full of employees willing to inhabit micro-apartments—will not fill those big, high-end, bold developments. At least not until they have the money to pay those coming rents.
Take Vertex and Kendall Square. As Paul McMorrow of CommonWealth magazine explains in a Globe op-ed, Vertex could only afford to leave Kendall Square for its sleek new HQ in the Innovation District "because it had largely graduated from the research-heavy stage of a pharmaceutical company’s life cycle, which depends heavily on Cambridge’s academic talent."
This distinction is important, because the Innovation District really spans two would-be clusters operating side-by-side. They operate on distinct economic scales: The smaller companies that value cheap, funky office space aren’t the same companies that are going to fill the new office towers that will be built atop South Boston’s acres of parking lots. The future tenants of those new waterfront office towers will be paying about twice the rent as their smaller neighbors down the street. Like Vertex, those companies will be paying a premium price. They’ll be paying to be next to the waterfront. Geography—simple as that? Just maybe. The Innovation District doesn't look like it can grow organically, even though, right now, it's actually cheaper when it comes to renting office and research space than Kendall Square. That should change as new development continues apace. When it does—when the Innovation District becomes consistently more expensive—the Menino administration needs to be ready with a fresh angle for prospective tenants: waterfront vus!
· How to Make South Boston a Big Draw for Innovation [Globe]
· 6 Things You Should Realize About the Innovation District [Curbed Boston]
· Google, Rents and the Seeds of the Hub's Next Kendall Squares [Curbed Boston]