SOMERVILLE — Just about every week since July, a group of neighborhood activists and a team of real estate developers have sat down to bargain over the future of Union Square.
The square — a jumble of hipster bars and ethnic restaurants, auto shops and corner stores — is on the verge of a $1.5 billion makeover. When it’s done, the neighborhood will be more modern, dotted with taller buildings creating new space for offices, stores, and apartments.
It also will probably be more expensive. It’s one of the most ambitious real estate projects ever launched in Somerville, a city whose story epitomizes, in many ways, the transformation of much of blue-collar Boston into something entirely new — and the chafing and tussles over turf that often accompany such change.
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That is: What is lost, and gained, as a rough-edged old city gives way? And how much room should the new make for what came before?
The work in Somerville would transform a key junction between the city’s residential western half, its more industrial east, and Cambridge to the south into a kind of downtown — something Somerville does not now have. Local groups are pushing to make sure that it includes more affordable housing and public park space, and that Somerville residents have a good shot at the thousands of jobs expected to be created when the buildings are done and the MBTA’s new Green Line station opens.
But more than that, the negotiations between community activists and developers highlight central questions facing this fast-changing city. Like: How important is it to keep Somerville’s blue-collar roots and vibrant small-business community intact? How much can City Hall demand from developers before they take their business elsewhere? And perhaps most important, who is actually running the city these days? Is it longtime Mayor Joe Curtatone, or the progressive aldermen and activists who in recent years have surged as a force in local politics?
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The Union Square debate has been building for some time. The city spent years on a plan for the neighborhood before awarding development rights to 15 acres — much of it around the new T station — in 2014 to a Chicago-based group known as US2. Since then, the project’s backers have pushed it through zoning and other approvals amid sometimes-heated discussions.
Meanwhile, a red-hot real estate market is changing the city around Union Square. Rents and, especially, home sale prices on the hilly streets of Somerville have climbed sharply. The median condo price, for example, has roughly doubled since 2010, to $715,000, while the average three-bedroom apartment in the city’s close-packed three-deckers now rents for more than $2,800. Grad students and tech workers have moved in. Working-class families have long been filtering out.
“You can literally see the city changing,” said Daniel LeBlanc, chief executive of the nonprofit Somerville Community Corporation. “That carries with it a lot of anxiety and tension, and you have a lot of people saying, ‘What does it all mean?’ ”
For a clue, you don’t have to look far beyond Union Square. Nearby, Assembly Row — a mini-city’s worth of office space, housing, and shopping — has reimagined a once-forlorn patch of eastern Somerville between the Mystic River and I-93, generating much-needed new tax revenue. But critics say the complex offers little for local residents, just low-wage retail jobs and apartments that most locals can’t afford.
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“It’s like a foreign land,” said veteran Somerville activist Rand Wilson. “We don’t want to see a repeat of that here in Union Square. We want good jobs and affordable housing.”
These days, those desires are gaining traction with the 11-member Board of Aldermen, which underwent a dramatic change in last year’s municipal elections. A slate of seven aldermen backed by the Bernie Sanders-inspired political organization Our Revolution Somerville were, in a surprise to many, swept into office. Four were newcomers who beat out incumbents. Several were opposed by Curtatone. It was, Wilson said, “a seminal moment in the direction of our city.”
Observers and candidates agree the vote was fueled, in part, by backlash against the 2016 election of Donald Trump as president. But worries about development and gentrification played a role, too, as did a decision made by the board a few months before the election to exempt Assembly Row from new, and more stringent, affordable-housing requirements.
“One thing I heard a lot from voters was the idea that, when push comes to shove, big developers get what they want in Somerville,” said Ben Ewen-Campen, who defeated an incumbent alderman to win a seat representing part of Union Square. “There was a general sense that things had gone a little too far.”
Once in office, many of the new aldermen began to take action on the development front. The board quickly moved to empower the Union Square Neighborhood Council, instead of Curtatone, to negotiate a so-called Community Benefits Agreement, or CBA, with US2. In August, it blocked Curtatone’s appointments to the Planning Board and Somerville Redevelopment Authority — typically rubber-stamp votes. And now it’s holding up the city’s sale of a key piece of Union Square to US2 until the developers and Neighborhood Council can reach an agreement on terms of the CBA.
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There’s only so much the aldermen can do to slow down US2, said Matt McLaughlin, a veteran alderman from East Somerville and leader of the board’s progressive wing. New zoning rules already give the developers much of what they need to start building. The Green Line and the additional investment it will bring are on the way. But for now, he said, the board still has the leverage to help force a deal that better protects the interests of current residents.
“Before [the election] a lot of people felt powerless,” McLaughlin said. “Now there’s an opportunity to put some teeth into a CBA. All we want is a small piece of the pie.”
US2 and its supporters say that even a $1.5 billion pie is only so big, and the public’s slice of it has grown considerably since the developer first came to Somerville in 2014.
Back then, the city mandated only 14 percent of housing in new projects to be set at affordable rents. Now it’s 20 percent, which was the most stringent such requirement in Greater Boston until Cambridge matched it last year. There also are mandated housing payments for the office space — $6.6 million — and a promise from US2 to spend $15 million to buy city-owned land, $9 million for improving streets and sewers, and $5.5 million to help pay for the Green Line extension. With the CBA, US2’s costs will probably grow even more.
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All that money will translate into lower profits for US2 and its investors — which include banking giant USAA — or higher rents in a part of the region that, despite Somerville’s progress, may not be able to command the same prices as Cambridge or downtown Boston.
US2 says it has no intention of scuttling the project. President Greg Karczewski was diplomatic about the changes, and the added expense. The goal, he said, is to build a project that works for everyone. But he acknowledged that can feel like a moving target.
“There have been evolving priorities here,” Karczewski said. “Somerville is a place that includes a lot of viewpoints in the conversation.”
That’s always been the case, said George Proakis, head of the Mayor’s Office of Strategic Planning and Community Development. He said the city has long tried to make sure every major development includes affordable housing and space for small businesses, while trying to preserve Somerville’s diversity. But such projects also generate the jobs and tax revenue that the city depends on to fund other priorities, including a $257 million high school that’s under construction.
“We need to make sure new development is meeting our values and expectations. We also want the development community to engage with us,” Proakis said. “Obviously, there’s a point where a project doesn’t work anymore and we need to be honest and figure out where that is.”
In Union Square, the biggest sticking point might be who gets to be part of the labor force. One key item the Neighborhood Council is asking for is a project labor agreement, or PLA. It would lay out local and minority hiring requirements and ensure union building trades workers do much of the construction on the massive project.
That would be a shift for Somerville. Assembly Row was built largely with nonunion labor, and critics warn that a PLA could boost construction costs at Union Square by 20 percent or more, costs that could make parts of the project difficult to finance. But advocates say a PLA would ensure good wages for those blue-collar workers who remain in Somerville, and could help members of the city’s sizable immigrant community access better-paying jobs both during and after construction.
“Keep in mind what is necessary to afford to stay in Somerville, even as a union construction worker,” said Bill Cavellini, cochair of the Union Square Neighborhood Council. “We need good-paying jobs.”
Many blame a similar fight over labor for stalling another big project in Somerville.
The city has a deal with Boston-based company Redgate and a pair of nonprofit housing developers to rebuild the aging Clarendon Hill public housing complex along the Mystic Valley Parkway. The group would rebuild 216 apartments for low-income renters and add 323 market-rate units to the site. But to make the roughly $175 million project financially feasible, Redgate said it wanted to build the market-rate apartments open-shop, rather than with more costly union labor.
Construction unions, and their newly vocal allies, resisted, saying Redgate was looking to squeeze profits from workers. It argued for rules that would require every job on the project to be union. After months of debate, Somerville aldermen in May approved the project without the union labor mandate. Ewen-Campen called it “by far the most challenging and painful” vote he has cast. But when the measure went to Beacon Hill for approval, the unions and their allies in Somerville prevailed, with state lawmakers adding a clause that required union-level wages be paid.
That blew a roughly $20 million hole in the project’s budget, said LeBlanc, whose agency is partnering on the project. Developers are looking for other funding sources, but until they find them, Clarendon Hill is on hold.
The episode left Jessica Turner fuming that Somerville’s newly powerful progressives put idealogy before better housing for the city’s poorest residents. She heads a tenant group for Clarendon Hill residents, and complained about the alliance the progressives struck with construction unions — most of whose members, she notes, don’t live in Somerville.
“There’s thousands of people on the waiting list for public housing in Somerville. People need a place to live,” said Turner, who has lived in a Clarendon Hill apartment for 10 years. “These groups say they’re fighting for people over profit, but it’s just not true.”
Many remain hopeful for a better outcome in Union Square. Proakis said City Hall is staying out of the CBA negotiations, but is confident they’ll be productive. Both Karczewski — the developer — and Cavellini — from Union Square — said they’re optimistic they’ll reach a compromise over the many details.
Union Square resident Aaron Weber, who unsuccessfully ran for a seat on the Neighborhood Council, has been keeping close tabs on the discussions. He says everyone involved appears be acting in good faith. But he worries about the risks of driving so hard for a good deal that the developers give up.
“My greatest fear is that in seeking to get everything, we get nothing,” he said. “When is good enough good enough? That’s really hard to know.”
Tim Logan can be reached at tim.logan@globe.com. Follow him on Twitter @bytimlogan.