MassChallenge may open Newton branch for startup graduates

MassChallenge, considered one of the world's largest startup accelerators, is looking at expanding from Boston's Innovation District into a city-owned building in Newton Centre where alumni of the program would spend an additional year growing their companies.

The idea was hatched during an 11-hour airplane ride when Mayor Setti Warren and MassChallenge founder and CEO John Harthorne sat next to each other on a flight back from Israel and "started brainstorming," according to the men.

"I'm really excited about this," said Harthorne. "We could offer our alumni who have startups just about to rapidly scale office space here, and then inundate them with advice and the ability to grow their companies and expand in the area."

MassChallenge is a nonprofit in its sixth year of operation, with 617 companies having gone through its program and 85 percent of them still active, many of which have remained in Massachusetts.

"These people are the future of the economy," Harthorne said.

Warren said he will seek $500,000 in Community Preservation Act funding to repair the roof and make other "basic repairs" to the historic building at 1294 Centre St., a former branch library that used to house the city's Health and Human Services Department.

And while details of the arrangement are not final, the two said MassChallenge would likely pay no rent but would cover all the operational expenses of the building. The arrangement would be similar to those made with other nonprofits that have licensing agreements with the city to use the former libraries in Waban and Auburndale, according to City Solicitor Donnalyn B. Lynch Kahn.

In return, MassChallenge would start an internship for students in Newton who could get firsthand experience watching start-ups grow, and open its doors to local entrepreneurs or people with an idea looking for advice on how to proceed for workshops, events, lectures, and informational sessions.

"It's an extraordinary opportunity for Newton to expand the innovation economy that is growing, expand our tax base, expose our students to 21st century jobs, and to grow entrepreneurship in our city," Warren said.

The Board of Aldermen will eventually have to approve the mayor's plans for the building, according to City Clerk David A. Olson.

Harthorne said he sees the Newton location as the perfect place for program graduates to do a sort of post-graduate year, not only because of its proximity to public transportation in a great neighborhood, but also because of the talent and expertise of the people who live in the area who could provide resources and be mentors and investors in the new companies.

"I live about a four minute walk away from Newton Centre," he said. "I could walk over."

In addition, Harthorne said the improving economy will force some companies out of their downtown Boston locations because of rent increases, creating an opportunity for Newton to be a recipient of those opportunities.

"A smart community could position itself to capture the next wave of start-ups," he said.

Greg Reibman, president of the Newton Needham Chamber of Commerce, agreed.

"This puts Newton on the map for innovators and people who have never even considered it," he said. "This would be huge for us."

The Newton Economic Development Commission also voted to support the proposal.

Warren said he thought of the surplus building in Newton Centre because of its proximity to the Green Line, and the amenities the neighborhood offers with its restaurants and shops.

"John [Harthorne] has a concept he wants to pursue, and I want Newton to be a part of it," he said.

So do some of the merchants in Newton Centre who met with the Warren and Harthorne earlier this week.

"When we met John we could just feel his enthusiasm and his sincerity in wanting to go out in the world and do good things, " said Karen Masterson, co-owner of Johnny's Luncheonette.

"This is exactly what town centers need, vibrant, exciting, innovative activity," she said. "To think that this world renowned effort would want to plant itself in Newton Centre, as an entrepreneur, I'm over the moon."

Warren O'Reilly, director of operations at Terry O'Reilly's Irish Pub, which he named after his father, said the village center is already vibrant, but an influx of young professionals would be a boon.

"I couldn't be more happy about the young, urban, professionals coming out here to work and making it like a mini-Palo Alto," he said.

Harthorne said the current group of 128 startups began working at MassChallenge at the end of October, meaning they would be ready to move on by this coming November or December.

He sees the Newton location housing about 10 or 12 new companies, each having four or so employees, although he said with out-of-office meetings and people working from home on occasion it is unlikely all 40 to 50 people would ever be in the offices at the same time.