Cronin Group built its reputation around a restaurant empire, and then residential development in South Boston. But Jon Cronin’s eponymous Boston company just scored a pair of victories that have little to do with either of those core business lines.
First, at City Hall: The Boston Planning & Development Agency picked Cronin to develop a five-story commercial building in the marine industrial park, at the far edge of the Seaport . The $81 million project would bring an intriguing side benefit: Cronin agreed to subsidize frequent shuttle service between Nubian Square (formerly Dudley Square) in Roxbury and the Seaport.
Next, at the State House: Governor Charlie Baker included language in his proposed state budget to significantly accelerate sales tax collections, in part to get more money for the MBTA. One big potential beneficiary would be STAC Media, a startup that holds a patent for the tax-collection process — and that counts Cronin as a significant minority investor.
Good luck finding more disparate ventures under one roof. Yet they both have origins in Cronin’s vast restaurant operation, which includes a catering business and a dozen eateries, with several under the Temazcal and Tony C’s brands.
These ventures also speak to Jon Cronin’s rising stature in the Boston business community. He tangled with the Conservation Law Foundation over his luxury condo project on the waterfront near Pier 4. They eventually settled, enabling a 22-story tower to go up under the St. Regis flag.
A native of County Cork, Ireland, Cronin has come a long way since his first major venture, Boston Beer Garden on East Broadway, launched in the 1990s. Cronin Group now employs more than 2,000 people, making it one of the largest restaurant operators in the state.
About one mile from where the Beer Garden once stood, Cronin has embarked on an ambitious plan to turn a moribund parcel at 24 Drydock Avenue into a gleaming, 123,000-square-foot structure, with ample room for labs and high-tech firms. Cronin beat out four other rivals for the development rights in the city-owned industrial park, including John Hynes. Hynes’s Boston Global Investors had offered somewhat more money. City Hall officials say Cronin offered more community benefits – most notably that Roxbury shuttle. (Cronin will pay nearly $1.4 million a year to the city and Boston Ship Repair, a previous holder of development rights.)
Cronin will move its headquarters to the top floor of the Drydock building, from Liberty Wharf, and put a commissary and restaurant on the ground floor. Other floors would be home to general industrial tenants; a marine robotics company has already signed a letter of intent.
About the shuttle: Cronin spokesman Rob Gray said the company will subsidize its operations for at least five years, with a budget of $675,000 in year one. Details need to be worked out, but Gray said buses will operate every 10 to 15 minutes during rush hours. The Massachusetts Convention Center Authority will oversee the shuttles, which would be free to the public. They would address a gap in the Silver Line, which was once envisioned as a one-seat ride between Roxbury and the Seaport.
Cronin’s venture into the sales tax collection business is bound to be more controversial. (He invested in STAC in 2017 after trying its methodology at one of his restaurants.) The governor has sought to implement this accelerated collection method before, but lawmakers have balked in the past. This time, Baker has tied some of the money to the Massachusetts Bay Transportation Authority, a politically savvy move.
Retailers currently remit monthly sales taxes to the state three weeks after that month is over. Baker’s latest proposal to change this system involves two phases. Phase one would require larger retailers, restaurants, and hotels to remit sales and room taxes for the first three weeks of each month in the final week of that same month. (The rest would go to the state in the following month.)
Phase two, to take effect in fiscal 2023, would require retailers and credit card processors to remit sales taxes on card transactions on a daily basis. This is where Cronin and STAC Media come in. Cliff Rotenberg at STAC said the technology already exists; his firm wants to license the methodology to card processors to pull this off. He cites one big benefit: daily remittance could boost collections by preventing taxes from being lost to store closures, bankruptcies, and fraud.
It remains controversial. STAC, working with lobbyist Brian Dempsey, has tried in recent months to win over business groups. The Massachusetts High Technology Council likes it, and recently told government leaders that it’s time to modernize the system. But the Massachusetts Taxpayers Foundation and the Retailers Association of Massachusetts remain opposed, citing the costs and complexities that smaller merchants, in particular, would face. RAM president Jon Hurst said there is a reason no other state currently requires daily sales tax remittance.
The restaurant business has paid off for Jon Cronin, as has Southie’s residential boom. It remains to be seen whether payment processing will bring him similar good fortune.