Business

Business policies giving Needham an edge over Newton

Migration of major firms from Newton reflects contrasting responses to change

TripAdvisor said it needed more space in moving to its Needham site.

Jessica Rinaldi/Globe Staff

TripAdvisor said it needed more space in moving to its Needham site (pictured).

The six-story, brick-and-glass building at the southwest corner of Needham’s main office park is set to be the new home for TripAdvisor Inc., a testament to the tech company’s rapid growth.

To some local business leaders, the new 280,000-square-foot complex where the travel website operator is moving this month from Newton represents a testament to something else: the contrast in economic development opportunities between the two neighboring communities.

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“What Newton should do is embrace what Needham has done,” said developer Jay Doherty, whose firm, Cabot, Cabot & Forbes, is fighting a legal battle to build an apartment complex in Newton. “The culture [in Newton] is very strong in not wanting to change at all, except to add luxury retail on Route 9.”

TripAdvisor isn’t the only company heading out of Newton. Euro-Pro, known for its Shark vacuums and Ninja blenders, plans to relocate next year to a former General Dynamics Corp. building near Trip-Advisor’s new complex. Trash-can maker BigBelly Solar Inc. more than doubled the size of its headquarters when it moved to the Needham park last month. And in May, shoe company Clarks Americas Inc. said it will move to Waltham.

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Officials in Needham and Newton play down any sort of rivalry. They work to promote areas on both sides of the Charles River for new business under the “N2 Corridor” brand (pronounced “N Squared”), and the towns together landed $3.3 million in state funds last year for improvements to a shared thoroughfare, Needham Street/Highland Avenue.

But Newton has been on the wrong end of a number of relocation decisions lately. Business leaders say that’s not entirely a coincidence.

“If you’re a developer and you want to deal with Needham, you know what you’re going to get there,” said Greg Reibman, president of the Newton-Needham Chamber of Commerce. “Newton’s a lot more challenging.”

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So how did a town of about 30,000 people outmuscle a city that’s nearly three times its size?

For one, there’s the challenge of obtaining special permits in Newton, required of any construction over 20,000 square feet, according to Newton Alderman Ted Hess-Mahan. These are doled out by the Board of Aldermen — soon to be renamed the City Council — and a two-thirds vote of the 24 members is needed.

Similarly sized projects in many other communities, including Needham, need approvals from much smaller boards or internal municipal agencies. “It’s an unwieldy process,” Hess-Mahan said. “It makes it a lot harder for businesses looking to come to Newton to get the permits they need.”

An apartment project in Newtonville has been in the works for nearly eight years, and a board vote isn’t expected until late this year, he said. Another example: Resistance from board members recently prompted Mayor Setti Warren to drop his proposal to convert an old library building in Newton Centre into a satellite office for startup incubator MassChallenge.

Changes in Newton’s biggest office park, along Wells Avenue, are particularly tricky because of decades-old deed restrictions aimed at limiting the properties to certain types of light manufacturing and office uses. The authority to waive those restrictions also rests with the aldermen. They have done so for several nonprofits, but not for housing — as Doherty of Cabot Cabot & Forbes experienced firsthand last year.

That’s when the board thwarted plans for a 334-unit apartment complex, a decision the developer is appealing. Doherty says the most successful suburban office parks today are those with a mix of uses, such as residences, restaurants, and shops.

The Newton-Needham chamber backed the project, saying it would provide badly needed housing for younger workers.

‘Newton’s a lot more challenging.’

Greg Reibman, Newton-Needham Chamber of Commerce 
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In comparison, Doherty’s company developed and later sold the Charles River Landing apartments more than five years ago in Needham’s main office park, now known as Needham Crossing. Normandy Real Estate Partners is moving ahead with plans to build nearly 400 apartments there.

Doherty said his firm pitched its 6.5-acre Wells Avenue property to Clarks, but estimated it would take 18 months to get approvals with a lot of uncertainty. “They said, ‘The heck with that,’ ” Doherty said.

None of the three companies that decided to move to Needham — TripAdvisor, Euro-Pro, BigBelly Solar — had bad things to say about Newton’s government. They said they simply couldn’t find the space they needed to match their ambitions.

TripAdvisor, for example, essentially doubled its headquarters size and needed room for more growth. “We just ran out of expansion options’’ in Newton, TripAdvisor chief financial officer Julie Bradley said.

Needham doesn’t pose the same constraints. Devra Bailin, Needham’s economic development director, said the town rezoned the 185-acre Needham Crossing area in 2011 to allow for taller buildings, bigger footprints, and more first-floor stores and restaurants. There are several old buildings ripe for redevelopment, and open pads ready for construction.

Members of the Warren administration, meanwhile, say they’ve taken great strides to make it clear that Newton is open for business. The mayor points to the revitalization of the Chestnut Hill side of Route 9, where two major retail complexes, known as the Street and Chestnut Hill Square, opened in recent years. (The hulking Atrium Mall, meanwhile, is being converted by Bulfinch Cos. into offices.)

Warren said he established a development review team several years ago to coordinate permitting work at City Hall. He’s close to securing a new home for MassChallenge’s satellite office.

And Warren said he plans to work with Wells Avenue landlords to improve the park, which he said is roughly 90 percent occupied. One property owner is moving ahead with a three-story expansion, the first major structure to be built there in decades.

Newton planning director James Freas said the city is particularly successful with startups founded by seasoned entrepreneurs who live in Newton. He said one example is Karyopharm Therapeutics Inc., a biotech firm that began in Newton, moved to Natick, and last year relocated to Wells Avenue. Karyopharm recently added about 16,000 square feet to its headquarters lease, a roughly 50 percent increase.

Warren said he’s proud of his efforts to help spearhead two regional initiatives aimed at attracting more innovation-oriented firms — the N2 Corridor project with Needham and the Charles River Mill District effort with Waltham and Watertown.

“I think it’s better to work regionally,” Warren said. “We can have shared success together.”

But Hess-Mahan said more needs to be done as employers hunt for newer, bigger offices in other municipalities — and bring property tax payments with them.

“Newton is, frankly, behind the curve,” he said. “I’m afraid that Newton is going to miss some opportunities to get companies to move here . . . and that places like Needham and Waltham are going to end up eating our lunch.”

Jon Chesto can be reached at jon.chesto@globe.com.
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