Kendall Square Urban Renewal Project: Six Pivotal Episodes
By Thad Tercyak, Cambridge Redevelopment Authority, Associate Director, 1968-1990
In 2012, the Cambridge Civic Journal published "Kendall Square Urban Renewal Project: Initial Years, 1963 to 1982". The following commentary focuses on six pivotal episodes during the 1963-1982 time period which provided the impetus for major development in the Kendall Square Urban Renewal Project. Successful development of the Kendall Square Project was a major factor in helping to attract high-tech companies to locate in the eastern sector of the City of Cambridge. Today there are over 163 institutional research companies within a 1-mile radius of the Kendall Square Urban Renewal Project area (Source: Boston Consulting Group, Capital IQ DB, U.S. Census Bureau, National Science Foundation.)
The episodes are described in chronological order.
1. Conceptualization and initiation of the Kendall Square Urban Renewal Project
In 1963, Mr. Robert F. Rowland, a city planner with extensive urban redevelopment experience, commuted to his job with the Boston Redevelopment Authority (BRA), parking his car in the Massachusetts Bay Transportation Authority (MBTA) Kendall Square rapid transit station parking lot. He noticed the area north of the rapid transit station was severely underdeveloped and an urban blight with underutilized, largely vacant and obsolete industrial and warehouse buildings. Because of the extent of urban blight, there did not appear to be any prospects for private development there. 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 the Massachusetts Institute of Technology (MIT), direct subway connections to Harvard and downtown Boston, and easy connection to Logan Airport.
Rowland was aware President John F. Kennedy had assigned the task of sending an American astronaut safely to and from the Moon before the end of the decade to the National Aeronautics and Space Administration (NASA) which was searching for a site in the Boston area for development of its 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 Cambridge Redevelopment Authority (CRA) 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 in 1964 was appointed CRA Executive Director.
In 1964, the CRA presented the concept plan to the Cambridge City Council. The Council voted to have the CRA prepare a redevelopment plan for the Kendall Square area with two objectives: (1) to provide land for both NASA and private development which would generate needed tax revenues for the City of Cambridge and employment opportunities; and (2) to secure maximum federal funds to help alleviate concerns about Cambridge’s ability to finance its share of the cost to carry out the project.
With respect to the first objective, the City of Cambridge, with support 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 determined that development could be expedited by using the urban renewal process.
2. Financing Cambridge’s $6.5-million share of the project cost
With respect to the second objective, the CRA advised Cambridge officials to take advantage of a complex urban renewal financing formula which could be used to "secure maximum federal funds" to finance Cambridge’s share of the cost to carry out the project.. The formula, based on Section 112 of the Housing Act of 1949, provided that expenditures by educational institutions and hospitals on facilities located within a mile of an urban renewal project that contributed to the objectives of the urban renewal project can be used as credits ("Section 112 credits") to cover the local share of the project cost.
The CRA took the lead in coordinating the efforts of Cambridge, MIT officials and congressional representatives to work out the details required to secure federal approval of the Section 112 credits financing plan. The City and MIT entered into an agreement which provided that MIT prepare a Development Plan which included MIT property located within a mile of the redevelopment area to be used for educational purposes. After the City’s review and approval of the plan, the expenditures incurred by MIT to acquire land and construct buildings in accordance with the plan 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 project cost.
3. NASA Quits. CRA amends Kendall Square redevelopment plan and objectives
The original Kendall Square Urban Renewal Plan covered 43 acres of land and designated 29 acres for use by NASA and 14 acres for NASA-related private development. The initial four years of the project were executed expeditiously. The CRA transferred 19 acres of vacant land to NASA for construction of a 14-story office tower and five low-rise buildings, and prepared an additional 10 acres of vacant land for future development by NASA. In 1970, without warning, NASA decided to abandon its operations in the project. It indicated it did not need the 10-acre site of vacant land designated for its development, and was transferring its interests in the project to the U.S. Department of Transportation (DOT). DOT established the National Transportation System Center on the site formerly occupied by NASA and named it after John A. Volpe, Secretary of DOT and former governor of Massachusetts
Cognizant that 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 benefit Cambridge more than if the land was developed by the federal government. The CRA decided to amend the Kendall Square Plan to designate new reuses for the undeveloped land even though that meant starting again the complicated and time consuming process of preparing a second Kendall Square Plan.
The CRA commenced negotiations with DOT Secretary Volpe, making 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 had undermined the City’s program to market the project area for private development. After 2 years of prolonged negotiations among the CRA, DOT, U.S. General Services Administration, and HUD, Secretary Volpe released DOT’s rights to Parcel 2 to the CRA.
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 years of development delays caused by NASA’s the withdrawal, it was a blessing in disguise because the additional 10-acres of land 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 in the Kendall Square Project which eventually helped to attract additional high-tech development in the eastern sector of Cambridge.
4. Urban Land Institute Advisory Services engaged to help break planning deadlock.
Cambridge was unprepared for carrying out the difficult and complicated tasks involved in overhauling the original plan and replacing it with an entirely new plan. Cambridge City Council created a task force comprised of representatives from a cross-section of Cambridge organizations and the Cambridge Planning Department to work with the CRA in the re-planning effort. A number of plans were developed, including proposals with contradictory project objectives, including "quick-fix" land uses, such as a beer distribution warehouse, a soccer field, open space, even restoring the Broad Canal, but the City could not arrive at a consensus.
Over time, a cloud descended over the project’s development potential and grumbles concerning the apparent lack of progress in redeveloping the site began to be heard, even mockery about changing the name of Kendall Square to "Nowhere Square".
To help break the planning deadlock, the CRA retained the advisory panel services of the Urban Land Institute (ULI) to review the Kendall Square Project and propose ways to move the project in the right direction. In carrying out the assignment for the CRA, panel members first spent two days reviewing comprehensive briefing materials prepared by the CRA staff and touring the project and surrounding area. Then individual panelists and teams conferred 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.
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: "Cambridge Center is a unique opportunity area, one that should be reserved to maximize its locational advantages". The ULI panel presented a point of view that the Kendall Square Project was a valuable asset that has the potential to produce great benefits to the City of Cambridge; and that the CRA and Cambridge City Council should resist the impulse to dispose of the land to take advantage of its short term marketability in response to concerns being expressed about development delays. The panel urged the CRA and City to be patient and adopt an optimal type of development that reflected the highest and best use for the land which would bring the greatest long range benefit to the Cambridge community. The panel proposed a long-term, sophisticated, large-scale, mixed-use optimal type of development.
The ULI panel’s professionalism and diligence in carrying out its mission impressed and gained the confidence of the CRA and Cambridge City Council which endorsed the panel’s recommendations and approved a Kendall Square Urban Renewal Plan for a mixed-use development, with the general objectives of generating tax revenues and jobs.
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 the CRA could overcome developer skepticism about the development climate in Cambridge by establishing a 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, including construction of infrastructure and execution of traffic circulation plans.
5. Boston Properties selected to develop Cambridge Center
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 DOT. In 1978, the CRA invited proposals to develop Cambridge Center. Four well qualified developers were selected as finalists, including Boston Properties which was not as well known in the Boston area as the other developers. After exhaustive interviews with each developer and analysis of each development proposal, the CRA designated Boston Properties as developer for Cambridge Center because it had two significant advantages over its competition:
1. Boston Properties’ two principals had worked as a team for many years producing a number of successful well-designed 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 was well capitalized and had a net worth adequate to sustain a large and complex development such as Cambridge Center. It had current assets sufficient to fund first-rate design and site planning; a cash flow arising from a broad, geographically diverse base of real estate investments that could support substantial start-up costs and sustain development during difficult economic times; and a proven ability to manage investment property effectively and efficiently.
Boston Properties turned out to be the right choice because it had the background, experience, resources and patience to attract the type of users that met the standards proposed in the ULI recommendations, that of promoting land development to its highest and best uses. Subsequently, the development of Cambridge Center benefitted the City of Cambridge by achieving goals for the amended Kendall Square Urban Renewal Plan set by the Cambridge City Council: generating $15-million in annual property tax revenues and 7,500 jobs.
6. High-tech development
The combination of (a) the presence of MIT, an international leader in high-tech research and innovation; (b) Polaroid’s decision to locate in Technology Square, a real estate development started in the 1960’s by Cabot, Cabot and Forbes in partnership with MIT that also included Rogers Block, a CRA urban renewal project adjacent to the Kendall Square Project; (c) the presence of Draper Laboratories in the immediate neighborhood; and (d) decisions by the Whitehead Institute and Biogen in 1982 to locate in the Kendall Square Urban Renewal Project area were key elements leading to the emergence of high-tech development in the Kendall Square Project, and helping to attract major technology and biotechnology development in the eastern sector of Cambridge. Today there are over 163 institutional research companies within a 1-mile radius of the Kendall Square Urban Renewal Project area.
P.S. Robert F. Rowland was CRA Executive Director during all the episodes from 1963 to 1982.
As CRA Associate Director, Thad Tercyak participated directly in the episodes from 1968 to 1990.