Dear friends and family of the Boston business community:
What a year it has been!
After her historic election, Michelle Wu has been in office for a little more than a year as Boston’s first woman and first Asian American elected as mayor. Oh what fun it has been covering her!
Wu started the year fulfilling a campaign promise to clear the tents on Mass. and Cass and place homeless people in transitional housing. Wu hasn’t solved homelessness yet and an open-air drug market persists in that part of the city, but she and her team remain vigilant.
Wu ended the year on a glamorous note with Boston hosting the celebrity-filled “Earthshot Prize” given out by the Prince and Princess of Wales. Yes, William and Kate were actually here for three days! They visited City Hall, and I got close enough for a good photo.
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But there’s some regrettable news to share, too. All is not well between the mayor and parts of the city’s business community.
I don’t know if it’s a generational divide or a gender gap, but relations between the mayor and traditional business types have turned increasingly negative lately. As a longtime business columnist for the Globe, I’ve been getting an earful.
As everyone knows by now, Wu doesn’t have much of a relationship with corporate bigwigs and real estate developers. She spent eight years on the City Council — even serving as its president for a term — but business folks backed other candidates in last year’s mayor’s race, notably Acting Mayor Kim Janey and then-City Councilor Annissa Essaibi George.
Then Wu won, handily. And you’d think bygones would be bygones. Certainly developers are ready to make peace and have their tete-a-tete with the mayor, just as they did with her predecessors.
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Wu, however, was terribly busy the first half of the year, filling key posts in her administration, such as the police commissioner, schools superintendent, and chief planner. There was also a pandemic to manage. But by summertime, Wu indicated she wanted to get to know the business community better.
“As our team gets solidified, I will have more time for more of those meetings and appearances,” she told me then.
From what I’ve gathered, Wu has been meeting more business leaders, but on her terms. Not so much one-on-one, but rather in groups, often by industry, such as biotech or banking, as part of a conversation about pieces of her policy agenda, whether it’s workforce training in the life sciences or small business lending.
Developers — who rely on City Hall more than most, to get their projects approved — have also been getting more attention with the hiring of new Boston Planning & Development Agency director Arthur Jemison in May.
Still, that hasn’t been enough. While Wu believes in empowering her Cabinet members, business honchos don’t want proximity to power. They want a direct line.
Real estate types have been so desperate to get to know the mayor they have been hosting fund-raisers for her all year long. One invitation read: “A breakfast in support of Mayor Michelle Wu / Suggested contribution: $200, $500, $1000 / Checks can be made out to ‘The Wu Committee.’ “
The mayor politely shows up, though some have told me she seems uncomfortable at these events.
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On the one hand, I get it. Wu owes them nothing. She won on a populist agenda. She would rather hang out with small business owners, community activists, and constituents than rich white guys who want to feed their egos and fill the skyline with towers.
On the other hand, the mayor needs to keep the development boom from going bust and make sure downtown can weather the rise of hybrid work. Nearly three-quarters of the city’s revenue comes from property taxes, and Wu’s plans to boost affordable housing and help Boston cope with climate change will be a lot easier if builders are part of the solution.
So Wu is walking a fine line here. She’s right that the city’s pro-development approach hasn’t worked out for many residents, yet alienating the business community will make it harder to enact her ambitious agenda.
The first big test came last week when Wu proposed a steep increase in so-called linkage fees that commercial developers pay to help fund affordable housing and provide workforce training. Wu is also recommending that housing developers increase the set aside for affordable housing in new buildings from 13 percent to 17 percent of a project’s square footage.
Some business and real estate leaders worry the proposals could pose a chilling effect on development in Boston, from lab space to housing. Some developers say privately they may pursue projects outside of the city because Wu’s policies are driving up the cost of doing business.
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Greg Reibman, president of the Charles River Regional Chamber, which represents businesses in Newton, Needham, Watertown, and Wellesley, put a sharp point on it in a recent newsletter: “Mayor Wu just did the burbs a favor.”
All of this can feel like first world problems. But here’s why the standoff is bad for Boston. The business community has had the ear of the mayor for more than half a century, and Boston wouldn’t be the economic powerhouse it is today without the right balance of give and take.
Business leaders want more access to the mayor because ultimately they’re pouring millions, sometimes billions of dollars, into the city, and they want to know if Boston is a worthy investment. They’re on edge, more than usual, because of economic headwinds from high interest rates and recession concerns.
Ultimately, Wu and the business leaders are on the same team: Both want Boston to be the best city it can be.
And if all that sounds too hokey, how about this: Wu has to remember to keep her friends close and her enemies closer.
Well, that’s all for now! Looking forward to 2023 ― and here’s hoping next year’s Christmas letter is a bit more upbeat.
All the best,
Shirley
Shirley Leung is a Business columnist. She can be reached at shirley.leung@globe.com.