Business

Small business owners, city frustrated by development-led displacements

Protesters in November joined Ramona Alvarez and her husband, Juan Tejeda, owners of El Embajador, which faces eviction in Egleston Square.
Josh Reynolds for The Boston Globe
Protesters in November joined Ramona Alvarez and her husband, Juan Tejeda, owners of El Embajador, which faces eviction in Egleston Square.

Omer Hecht knew his days as a business tenant in a Jamaica Plain industrial building were numbered when he heard the property had been sold for six times its assessed value.

Sure enough, not long after the development approval process was over, his camera equipment shop and about 20 other small businesses and artists received eviction notices. The new owner plans to replace the single-story building with a four-story structure featuring nine luxury residences and three commercial studios.

For Hecht, the displacement brought with it a grim realization: He could no longer afford to do business in the neighborhood where he set up shop on Brookside Avenue about seven years ago. He will enter a lottery the developer has set up for displaced tenants to vie for two of the commercial spaces, but it’s a long shot.

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“I won’t be able to work in Jamaica Plain ever again,” said Hecht, who this month relocated his business, CatLABS, to Roslindale and laid off two of his four employees to afford a rent that is five times what he paid previously. “With the [lease] prices new luxury developments are requiring, soon there will be no space for local small businesses in Jamaica Plain.”

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Hecht’s story is familiar to owners of small businesses in Jamaica Plain and other rapidly changing neighborhoods. Investors are buying up rundown commercial buildings, evicting tenants or ending their leases, and redeveloping properties into a mix of housing and retail that command higher rents.

And there’s not much people like Hecht can do to stop them.

Unlike residential renters, commercial tenants have few if any protections — outside of private lease agreements — to safeguard them from aggressive eviction tactics. Because the Boston market remains so hot, many commercial landlords these days will only offer small businesses month-to-month leases, making it easier for them to clear out a building if they get an attractive offer. It’s not unusual for a sale to be contingent on a building being vacant.

The new money is helping to spruce up formerly neglected sections of the city, but neighborhood advocates are troubled that the makeovers often come at the expense of mom-and-pop operations.

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“Small businesses are part of the revitalization of Jamaica Plain, but that leads to increasing rents, and a lot of people can’t afford to pay,” said Kathie Mainzer, one of the owners of the JP staple Bella Luna & The Milky Way, a restaurant and lounge operation that relocated 10 years ago from Centre Street due to rent increases. “There’s only so much you can charge for a muffin or a pizza.”

Some business owners and housing advocates say while the city focuses on fostering aggressive housing development and granting zoning relief to large construction projects, it has not been doing enough to protect neighborhood businesses from real estate speculators.

City officials acknowledge development is increasingly displacing homegrown businesses, but they say there’s only so much they can do to intervene in private transactions.

“The characterization of the city being frustrated and concerned . . . is correct,” said John Barros, Boston’s chief of economic development. He said his staffers are “thinking about and looking into” how they can create for commercial tenants some of the same protections that residential renters are afforded.

Barros cited the recent acquisition of a former bank building in Dorchester’s Uphams Corner by the Dudley Neighbors Inc. community land trust as an example of the city’s efforts to promote development without displacement. Barros said his office is working with the organization to consider deed restrictions for the property that would provide some security to small businesses renting space. But, he acknowledged, “we haven’t really figured this out yet.”

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Neighborhood advocates who have long criticized city officials for rubber-stamping zoning relief applications that allow developers to build bigger — making their projects more lucrative — are now pointing to recent examples of the city flexing its regulatory muscle to compel developers to work with small-business tenants caught in the middle of private real estate transactions. But the results have been mixed.

Last year, when a luxury residential developer had an agreement to buy an artists studio building on Brookside Avenue in Jamaica Plain for about $2 million, the tenants appealed to city officials, who told the would-be buyer they were not interested in changing the property’s light industrial zoning to make way for residences, said Brendan Killian, who’s had a studio there for five years.

That caused the developer to pull out of the deal. But the victory was short-lived. A few weeks later, Killian said, around Christmastime, the artists were sent eviction notices after the owner told them he’d gotten another offer for the three-story building.

“Ever since this [area] has been targeted as a redevelopment zone, it’s like a virus,” Killian said of investors scooping up properties. “The city at large is woefully unprepared for this type of thing, in terms of where artists can live and work.”

The effect of speculative development is an exodus of artists and art-related businesses, said Jodi Solomon, who ran her artist management company, Speakers Bureau, out of 295 Huntington Ave. for 24 years before being evicted last year after the building was sold. Other tenants included music- and theater-related businesses.

“Huntington Avenue is the Avenue of the Arts, and these are the small businesses which nobody in Boston seems to care about,” Solomon said. “We hire people, we pay taxes, we’re a vibrant part of the community, but we are always overlooked for corporations, always . . . We should be given some entitlements like [General Electric] was.”

The city tries to get involved in cases in which it has “leverage, where a property owner is asking the city for relief,” said Karilyn Crockett, director of the city’s small business development unit. City officials know commercial displacement is a problem, she said, but there are no numbers to quantify it.

“It’s so very speculative at this moment,” she said. “We can’t wait for data; we have to be part of the conversation. What I continue to find for what looks like the majority of small businesses is that there is no lease in place. This continues to be a major issue.”

That’s the case for the owners of El Embajador, a Dominican restaurant in Egleston Square. The area, on the border of Jamaica Plain and Roxbury, is ripe for redevelopment. The city has a comprehensive plan for new housing along an underdeveloped corridor from Forest Hills to Jackson Square.

After nearly 30 years at their Washington Street location, and with no lease, co-owner Ramona Alvarez said she and her husband have been fighting an eviction by the developer City Realty. Activists appealed to city officials, who have been urging lawyers on both sides to work on a compromise.

Cliff Kensington, vice president of acquisitions for Brookline-based City Realty, denied it is evicting El Embajador and said the company has been actively negotiating to help relocate the restaurant. For developers, getting the most out of an investment often means redeveloping it and asking tenants to leave, Kensington said. Some tenants are given the opportunity to come back after redevelopment, but the average two-year construction period — plus repeated moving costs — often prevent them from doing so, he added.

“We give a large amount of notice before anybody has to move,” Kensington said. “We never try to hide anything. We are developers — if we’re buying a single-story building on a 20,000-square-foot lot, it’s pretty clear our intention is to develop it.”

Supporters of El Embajador in Egleston Square staged an “eat-in” to protest the restaurant’s pending eviction.
Josh Reynolds for The Boston Globe
Supporters of El Embajador in Egleston Square staged an “eat-in” to protest the restaurant’s pending eviction.

Katheleen Conti can be reached at kconti@globe.com. Follow her on Twitter @GlobeKConti.