Cambridge Civic Journal Forum

Kendall Square Urban Renewal Project: Initial Years, 1963 to 1982

By Thad Tercyak

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This narrative was submitted in response to the following invitation:
The November 28, 2011 edition of the Cambridge Civic Journal reported (a) that several informative documents regarding the history and background of the Cambridge Redevelopment Authority were made available and entered into the record and (b) “Any additional information on the Cambridge Redevelopment Authority or the history of urban renewal in Cambridge are also welcome…. – Robert Winters, Editor.”

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The following narrative provides additional background information on the Cambridge Redevelopment Authority (CRA) and pertains to the history of urban renewal in the City of Cambridge during the initial 19 years of the Kendall Square Urban Renewal Project, from 1963 to 1981. It was during this period of time that the CRA initiated the Kendall Square Project, acquired, cleared and improved 43-acres of land which was an urban eyesore of underutilized and obsolete industrial and warehouse buildings and made the land available for construction of public improvements and private development in accordance with the Kendall Square Urban Renewal Plan. As a result of these activities, the CRA was in a position to undertake completion of the remaining pieces of the Kendall Square Urban Renewal Project, also known as Cambridge Center. The subsequent efforts of the CRA and its developer culminated in the development of the Cambridge Center Project.

This period of time coincides with the tenure of Mr. Robert F. Rowland as the CRA Executive Director who, among the many people and organizations involved in the Kendall Square Urban Renewal Project, provided leadership during the Project’s difficult and, at times, painful periods.

In 1968, as an economist-urban planner specializing in urban redevelopment projects and completing seven years as a director of two major urban renewal projects with the Boston Redevelopment Authority, I was hired by the CRA as an Associate Director. I left the CRA in 1990. I participated in virtually all of the events described in this narrative which occurred during my 22 years with the CRA, 1968 to 1990. Descriptions of the events which occurred between 1963 and 1968 before I joined the CRA and descriptions of the events after I left the CRA in 1990 are based on CRA records and reports, and conversations with CRA staff.

Initiation of the Kendall Square Urban Renewal Project

Before joining the CRA, Robert F. Rowland was a city planner with extensive urban redevelopment experience, and at various times served as Director of Community Development with the Boston Redevelopment Authority (BRA), Deputy Director of the Providence Redevelopment Authority, and as a partner in a consultant firm specializing in city planning and urban redevelopment projects.

In 1963, Rowland commuted to his job with the BRA, parking his car in the Massachusetts Bay Transportation Authority (MBTA) Kendall Square rapid transit station parking lot. He noticed that the area north of the rapid transition station was severely underdeveloped with underutilized, largely vacant, obsolete industrial and warehouse buildings, a blighting influence on the surrounding area. As a city planner, he visualized the land as an ideal site for urban redevelopment because of its unique locational advantages, including the rapid transit station, proximity to MIT, direct subway connections to Harvard University and downtown Boston, and easy connection to Logan Airport.

Rowland was also aware that there was competition in the Boston area to provide a site for the National Aeronautics and Space Administration (NASA) to develop a technologically sophisticated Electronic Research Center.

On their own time, Rowland and two associates sketched out a redevelopment plan for the Kendall Square area which would accommodate NASA and provide land for NASA-related private development. He presented his concept plan to the CRA Board which asked him to work with the CRA to move the plan through the redevelopment process. Rowland agreed, left his job with the BRA, was hired by the CRA and subsequently appointed CRA Executive Director.

In 1964 the CRA presented the concept plan to Cambridge City Council. The Council reacted favorably and voted to have the CRA prepare a redevelopment plan for the Kendall Square area with two general objectives:

1. to provide land for both NASA and private development which would generate needed tax revenues and employment opportunities for the City of Cambridge; and
2. to secure maximum federal funds to finance implementation of the redevelopment plan.

With respect to the first general objective, the City of Cambridge, with support for the project from local and congressional representatives, convinced NASA officials of the advantages of a Kendall Square location. After discussions and consultations among the CRA, NASA, Cambridge representatives and the U.S. Department of Housing and Urban Development (HUD), it was ascertained that development could be expedited through the use of the urban renewal process because of its unique advantages, including:

1. Preparation of a redevelopment plan sponsored and approved by the City of Cambridge.
2. Land assembly through the use of local “quick-taking” eminent domain powers.
3. Financing of most of the project costs by the Federal government.
4. CRA control over developer selection and approval of developers’ plans.

With respect to the second general objective, the CRA advised the City of Cambridge to take advantage of a complex urban renewal financing formula which could be used “to secure maximum federal funds to finance implementation of the redevelopment plan”. The formula, based on Section 112 of the Housing Act of 1949 as amended in 1954 and 1955, provided that expenditures by educational institutions and hospitals located within a mile of an urban renewal project and conducting activities that contribute to the objectives of the urban renewal project can be used as credits (“Section 112 credits”) to cover the local share of the cost to carry out the project. The CRA took the lead in contacting MIT officials and congressional representatives in working out the details required to secure federal approval of the Section 112 credits financing plan. Consequently, the City and MIT entered into an agreement which provided that MIT submit to the City for its approval a Development Plan which included MIT property located within a mile of the redevelopment area to be used exclusively for educational purposes. Then the expenditures incurred by MIT to acquire land and buildings in accordance with the Agreement could be used as Section 112 credits. Subsequently, when the Kendall Square Urban Renewal Project was approved, MIT provided $6.5 million dollars in Section 112 credits to cover the City of Cambridge’s entire share of the net project cost.

In 1965, the Kendall Square Urban Renewal Project prepared by the CRA was approved by the City of Cambridge, Commonwealth of Massachusetts and the Federal government. The project covered a 43-acre site in and around Kendall Square, comprised of four parcels: Parcel 1
(19 acres) and Parcel 2, (10 acres), both designated for use by NASA; Parcels 3 and 4 (14 acres combined) designated for private development.

In 1966, NASA signed a Land Disposition Contract with the CRA which provided that the CRA transfer, as soon as possible, ownership to NASA of 19 acres of land (Parcel 1) ready for construction of improvements by NASA. The CRA immediately started land preparation activities, delivered the land on schedule and NASA constructed a 14-story office tower and five low rise buildings. A particularly difficult task for the CRA was securing permission to fill the Broad Canal, which ran through the middle of the project area. The CRA had to deal with the nightmare of resolving the bureaucratic requirements of a multitude of agencies involved in relocating the Canal to an underground pipe system.

NASA Quits; DOT Releases Land

Then in 1969, without warning, NASA announced the closing of its facility in Cambridge and its intent to withdraw from the project, in spite of bitter objections and protests by the City of Cambridge. Subsequently, NASA’s interest in the site was transferred to the U.S. Department of Transportation (DOT). In 1970, the DOT established on Parcel 1 the National Transportation System Center, later named after John A. Volpe, Secretary of DOT and former governor of Massachusetts.

Since Parcel 2, the 10-acre site originally designated for NASA’s use under the terms of the original Kendall square Urban Renewal Plan was still undeveloped and in CRA possession, the CRA recognized an opportunity to expand the area of land which could be developed for private uses which would be likely to benefit Cambridge more than if the land were to be developed by the federal government. The CRA met with DOT Secretary Volpe, and made the case that DOT should relinquish its rights to Parcel 2 because NASA’s withdrawal from the project was a breach of its contractual obligation with the CRA, a flagrant disregard of its commitment to the community and it undermined the City’s program to effectively market the rest of the project area for private development.

On November 23, 1971, almost 2 years after NASA announced it was quitting its obligations to the City of Cambridge regarding development in the Kendall Square Project and after prolonged negotiations among the CRA, DOT, U.S. General Services Administration, and HUD, DOT Secretary Volpe released DOT’s rights to Parcel 2 to the CRA.

Amending the Redevelopment Plan

Retrieving the rights to Parcel 2’s 10 undeveloped acres required that the CRA amend the Kendall Square Urban Renewal Plan in order to designate new reuses for the land. The 10 acres plus the 14 acres originally designated for development by NASA became a 24-acre site for private development and had a tremendous impact on the development potential of the Kendall Square Urban Renewal Project. Unfortunately, the atmosphere for carrying out a new planning effort came at a particularly inopportune time.

The Boston Area real estate market was in the doldrums for a good part of the 1970’s and new development was at virtual standstill. Turmoil created by the Vietnam War protests made for difficult conditions for rational land use planning as some protesters attended planning meetings for the main purpose of expressing their objections to the war. Locally, community groups proposed contradictory project objectives, including “quick-fix” land uses, such as a beer distribution warehouse, a soccer field, open space, even restoring the Broad Canal. Cambridge City Council created a task force comprised of representatives from a cross-section of Cambridge organizations to work with the CRA in a new planning effort. A number different
land use plans were developed, but the City could not arrive at a consensus on land uses for the project.

Over time, a cloud descended over the project’s development potential as efforts to resolve planning problems were frustrated and grumbles concerning the apparent lack of progress in redeveloping the site began to be heard.

During the time Cambridge City Council was struggling to settle on an acceptable Kendall Square Urban Renewal Plan, the CRA was busy completing land preparation activities and creating vacant land ready for new construction once the planning deadlock was resolved.

Land Preparation Activities

Land preparation activities executed by the CRA included roughly the acquisition of 100 parcels of land, relocation of 100 businesses, demolition of 50 buildings, clearance of 43 acres of land, construction of public improvements and creation of new traffic patterns.

Relocation is among the most difficult land preparation activity because the redevelopment authority must interface with the people who are disrupted by the project. Practically all of the relocation in the Kendall Square Urban Renewal Project involved businesses, as only a handful of families were affected. Some businesses did not object to being acquired or relocated because they were already planning to leave the area. However, most of the Kendall Square businesses endured various degrees of hardship by being required to move. There were understandable feelings of shock, anger, bewilderment, and vows to resist moving. Consequently, the CRA carefully selected staff for the relocation operation, making sure they had the sensitivity to patiently work with people who had to move, treating them with dignity, respect and courtesy. There were no forced legal evictions and the Kendall Square relocation operation required years to accomplish as some businesses took that long before they moved.

It is during the land preparation stage that a redevelopment agency experiences its most difficult time because of the problems associated with relocation operations and some of the other activities, such as demolition of buildings, site preparations, discontinuances of existing streets, and construction of new streets and utilities, are messy, noisy, dirty, unsightly, and often a public nuisance.

The land preparation activities phase is the nitty-gritty, heavy lifting period of the redevelopment process. Its purpose is to transform land containing outmoded, derelict buildings and blighting uses into vacant land ready for construction of improvements designated by the renewal plan. But if the real estate market is not receptive to the reuses designated by the renewal plan, the land remains vacant until market conditions favorable to the renewal plan’s reuses come into existence. The longer the time land remains vacant, the more complaints are heard about the lack of progress and the amount of time that has gone by since the start of the redevelopment project.

ULI Panel Helps To Break Deadlock

To help break the planning deadlock, the CRA retained the advisory panel services of the Urban Land Institute (ULI) to review the Kendall Square Urban Renewal Project and suggest ways to move the project in the right direction. ULI’s advisory panel services program approaches a project from all perspectives by assembling experts in the fields of market potential, land use and design, financing and development strategies, and organizing for implementation.

In carrying out the assignment for the CRA, panel members first spent two days reviewing comprehensive briefing materials prepared by the CRA staff; touring the project and surrounding area; and individually and in teams talking with nearly 100 community
spokespersons, citizens, business persons, government officials, members of the local real estate community, and others interested and concerned with the future revitalization of the Kendall Square area. Then the panel spent the next two days framing their recommendations and drafting a report which was presented to the public.

The ULI panel concluded that only a few properties in the country had a broader array of locational advantages as the Kendall Square area and the opportunities associated with the Kendall Square Urban Renewal Project suggested a sophisticated large, planned-unit development approach. The panel stated there were two approaches to redevelopment to consider:

1. Dispose of the land for an optimal type of development that will reflect the highest and best use of the land, thereby bringing the greatest long-range benefit to the Cambridge community.
2. Dispose of the land to take advantage of its short term marketability, enabling the CRA and Cambridge City Council to respond promptly to concerns being expressed respecting development delays.

The ULI panel’s preference was for the first approach: “Cambridge Center is a unique opportunity area, one that should be reserved to maximize its locational advantages”. The CRA adopted the ULI panel recommendations respecting an optimal type of development. The ULI panel’s professionalism and diligence in carrying out its mission impressed and gained the confidence of the Cambridge City Council. The Council sent a message to the real estate development community that it was ready to change the development climate in Cambridge by approving zoning for a mixed-use plan amendment to the Kendall Square Urban Renewal Area and urging the CRA to move forward with development.

Attracting Developers

The ULI panel also warned that attracting developers would not be easy: “Citizen concerns, political pressures, economic uncertainty, and the absence of a united and strong development process have combined to create a credibility problem with the real estate development community”. The Panel advised that the CRA could overcome developer skepticism concerning the development climate in Cambridge by establishing a track record for getting things done.

The CRA responded by removing all legal and technical impediments to development; completing an Environmental Impact Statement; securing plan and zoning amendments; and carrying out a $7 million public improvements program, such as infrastructure construction and improving the appearance of vacant land through dust control measures, fencing, etc.

The CRA, working closely with Cambridge representatives and the local congressional delegation, intensified local efforts to secure federal funds needed to complete the project. As a result, in 1974 HUD agreed to reserve an additional $15-million for the project. Then in 1975 Congress passed and President Ford signed legislation limiting Cambridge’s share of the project cost to the initial $6.4 million, contributed in 1965, in the form of Section 112 credits. Consequently, Cambridge’s share of the project costs was negligible.

Selecting a Developer

In 1976, for marketing purposes the name Cambridge Center was adopted to refer to the 24 acres in the Kendall Square Urban Renewal Project outside of the land occupied by the DOT. The CRA established a Development Advisory Group comprised of experts in large-scale project financing and real estate negotiations to provide counsel in its negotiations with developers; and
a Design Advisory Group consisting of local independent architects to help evaluate large-scale design proposals.

In 1978, an invitation for proposals to develop 14 of the 24 acres comprising Cambridge Center based on the theme that “The Best Site to Develop in Boston is Not in Boston”, met with encouraging response from developers. Four well qualified finalists were selected from among the developers who submitted proposals. The CRA interviewed in depth each of the four finalists. The Development Advisory Group examined each developers finished projects, financial soundness and marketing performance. The Design Advisory Group evaluated each developers design team. After exhaustive interviews and analysis, it was determined that Boston Properties had two important advantages over its competition:

1. Boston Properties’ two principals had worked as a team for many years producing a number of successful real estate developments nationwide. In contrast, the other finalists had undergone changes or formed new teams, making evaluations of future performance difficult.
2. Boston Properties’ financial capabilities were impressive. It had demonstrated a net worth adequate to sustain a large and complex development such as Cambridge Center, including current assets sufficient to fund first-rate development planning; a willingness to invest those funds in Cambridge Center; a cash flow arising from a broad, geographically diverse base of real estate investments that could support start-up costs and sustain development during tough economic times; and a proven ability to manage investment property effectively while adjusting to economic changes.

Selecting Boston Properties as the developer of Cambridge Center was a difficult decision by the CRA because of pressure from supporters of the other finalists.

Building Construction Begins

In 1979 a development agreement between the CRA and Boston properties was executed, including conditions that the developer commence initial development activities by constructing a major building within seven months, and depositing $250,000 as security for the developer’s performance. Boston Properties met its obligation by starting construction of a 13-story office building as required by the agreement.

In 1981 Boston Properties commenced construction of a 12-story office building with ground floor retail and a 5-story, 863-space garage with an open space park built on the roof of the garage.

Subsequently, the CRA revised its development agreement with Boston Properties to include Parcel 2’s 10 acres, so that the area comprising Cambridge Center totaled 24 acres.

Summary

In 1963 Cambridge City Council designated the CRA as the lead agency with major responsibility for carrying out the Kendall Square Urban Renewal Project. In 1964 the CRA Board appointed Robert F, Rowland as its Executive Director. During Rowland’s tenure from 1964 to 1982, the CRA accomplished the following objectives:

1. Initiated the Kendall Square Urban Renewal Project after NASA chose Cambridge as the location for its Electronics Research Center;
2. Secured financing for the project;
3. Completed land preparation activities;
4. Persuaded U.S. Department of Transportation (DOT) to release its hold on ten acres of, land designated for development by NASA;
5. Prepared and secured approval of a revised Kendall Square Urban Renewal Plan;
6. Prepared development sites for new construction;
7. Selected Boston Properties as project developer and collaborated with Boston Properties to initiate development of Cambridge Center.

During Rowland’s 18-year tenure as the CRA Executive Director, what had once been a 43-acre urban eyesore was cleared and improved with infrastructure making the land immediately available for development of the reuses designated by the Kendall Square Urban Renewal Plan. The CRA guided the Kendall square Urban Renewal Project through difficult periods fulfilling Cambridge City Council’s original objectives: (1) to provide land for private development which would generate tax revenues and employment opportunities for the City of Cambridge and (2) to secure maximum federal funds to finance implementation of the redevelopment plan.

In 1982 Rowland left the CRA and Joseph F, Tulimieri was appointed the CRA Executive Director.

A Blessing in Disguise

When NASA decided to withdraw from the Kendall Square area, the feeling in the City of Cambridge was that the project had been delivered a tremendous setback because it had lost
its major developer. As it turned out, despite the development delays caused by the withdrawal, it was a blessing in disguise because an additional 10 acres of land could be disposed of as recommended by the ULI panel “for an optimal type of development that will reflect the highest and best use of the land, thereby bringing the greatest long-range benefit to the Cambridge community”. The 10 acres plus the 14 acres already designated for private development became a 24 acre site large enough to create a critical mass for high-tech development which would attract additional high tech development in the rest of the Kendall Square area and the eastern sector of Cambridge.

The combination of (a) the presence of MIT ; (b) Technology Square, which included Rogers Block, a CRA urban renewal project containing 4.5 acres of land located west of the Kendall Square Project, started in the 1960’s and developed by Cabot, Cabot and Forbes in partnership with MIT and (c) decisions by the Whitehead Institute and Biogen in 1982 to locate in Cambridge Center were key elements leading to the emergence of high-tech development in the Kendall Square area, and providing the impetus for major technology and biotechnology development in the eastern sector of Cambridge. From the 1980’s Cambridge Center experienced an acceleration of biotech development until the City of Cambridge declared a building moratorium in 2000. After the moratorium additional development consumed virtually all of the land designated for development in the original boundaries of Cambridge Center.

As a result, within a 1 mile radius of the Kendall Square Project, there are over 80 biotechnology firms. One observer noted that “officials at the world’s top research institutions (came to) view Kendall Square as a neighborhood with its own peculiar identity, a place where scientists can meet to discuss angiogenesis or algorithms over a beer or dine next to a Noble laureate”. (Woolhouse, “Making a High Tech Mecca”, Boston Sunday Globe, June 26, 2011).

To date, virtually all of the original 24 acres of the Cambridge Center project have been developed. The project initially anticipated development of 1.4 million sq. ft. of gross floor area with a valuation of $250 million. As of late, the project achieved development of around 3 million sq. ft. of gross floor area with a valuation of $650,000 million, generating $13 million in real estate property taxes and 6,000 jobs.

In 2001, market conditions and local public policy directed the CRA to focus on housing involving further development of Parcel 1 of the Kendall Square Urban Renewal Project.

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POSTSCRIPT

Rowland’s contributions to the success of the Kendall Square Urban Renewal Project and Cambridge Center were substantial, but scarcely recognized. For example, in the Nowiszewski Plaza located next to the Marriott Hotel are two plaques. One plaque entitled “A Tribute to the Members of the Cambridge City Council” contains the names of Cambridge City Council members who served during the development period of Cambridge Center. The other plaque entitled “In Recognition of the Efforts of the Cambridge Redevelopment Authority in the Development of Cambridge Center” contains the names of all the people who served as members of the CRA Board starting with Paul R. Corcoran, Chairman, 1957-1960, 1967-1970, and going through to Charles C. Nowiszewski, 1976-1985. The only name on the plaque associated with the CRA outside of CRA Board members is that of the present Executive Director and Secretary who succeeded Rowland, the CRA Executive Director from 1964-1981. This is an omission that deserves to be corrected. The plaque should read:

Robert F. Rowland
Executive Director and Secretary 1964-1982
Joseph F. Tulimieri
Executive Director and Secretary 1982-present

Footnote:

During Rowland’s tenure as the CRA Executive Director, the CRA carried out redevelopment operations which helped to improve and stabilize the Wellington-Harrington Urban Renewal Area by (a) working with property owners to rehabilitate their properties by providing construction advise, arranging financing, and enlisting support from Just-A-Start; (b) carrying out spot clearance of blighted properties, such as junk yards; and (c) providing cleared land for construction of housing, and public and private improvements.

The CRA has informative reports pertaining to its activities in the Wellington-Harrington Urban Renewal Area.