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Marlborough works to attract more business

CardioFocus group leader Sidney Kong works on high-tech devices.

Essdras M Suarez/Globe Staff

CardioFocus group leader Sidney Kong works on high-tech devices.

At a glance, CardioFocus and IQuum are a lot alike.

Both companies manufacture medical devices in the Marlborough Technology Park off Route 20. Both are privately held and have around 50 employees. Both are expanding.

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But their executives think of their relationship with the city in starkly different ways, and that illustrates the challenges and opportunities faced by area communities that are seeking to attract businesses.

“Marlborough involves minimal commuting time,” said Stephen Sagon, president of CardioFocus Inc., which makes an endoscope and laser system to treat heart conditions.

Sagon lives in southern New Hampshire. The company’s founders are from Cape Cod. Many CardioFocus employees reside near the company’s former location in Norton. For Sagon and his colleagues, Marlborough’s main asset is its location midway on the arc of Interstate 495. “It has very little to do with what Marlborough does,” he said.

Handout

IQuum lab personnel developing the company’s diagnostic device.

At IQuum Inc., which builds devices that test for infectious diseases, chief financial officer Dan Sutherby also cited the city’s location, especially its proximity to Boston’s universities and hospitals. He was quick to add, though, that City Hall is a factor, too.

A month ago, said Sutherby, he called Mayor Arthur Vigeant to complain about potholes on Simarano Drive, which runs through the technology park. A few days later, crews had filled the potholes, and Vigeant’s staff sent him ideas about how they planned to improve the road in the future.

“To me, that says it all, when you are responsive to a business like that,” Sutherby said.

The divergent expectations of companies reflect how local governments have limited control over economic growth, said Paul Matthews, executive director of the 495/MetroWest Partnership, a nonprofit public-private collaborative that advocates for economic development in 33 communities along the highway’s corridor.

Municipal officials can’t anticipate everything businesses consider as they decide whether to expand locally or move elsewhere, said Matthews. Instead, they need to capitalize on the assets they can’t change — like geography — while improving the services under their control, like answering executives’ calls and filling potholes, he said.

“Companies decide what’s important,” said Matthews. “The trick is to make sure you are as responsive as possible when you do get a call from a business owner. From that moment on, you do have the opportunity to make an impact.”

Essdras M Suarez/ Globe Staff

Stephen Sagon is the CEO of CardioFocus, a company in Marlborough.

On Feb. 11, the partnership launched a new initiative, “Grow in 495/MetroWest,’’ in a bid to educate local officials about how companies select locations.

As part of the initiative, the organization published two reports that highlighted the economic assets of Boston’s western suburbs, and provided a snapshot of the region’s commercial real estate market. The reports paint a picture of an increasingly prosperous region that has plenty of room to grow.

According to a study by the partnership, for the 12 months ending in September 2012, the latest figures available, its member cities and towns hosted employers that provided one out of 12 jobs in Massachusetts, and that paid around $19 billion in salaries. The figure had grown by $2 billion over the previous four years.

The gains are based on highly educated employees working in office space that’s near Boston but relatively inexpensive compared with Boston prices, according to Brendan Carroll, senior vice president for research at a Boston-based real estate firm, Transwestern RBJ, in a statement released with the reports.

“The skilled, seasoned workforce and access to the business environment and infrastructure of the regional core in Boston remain anchors for the region,” said Carroll, who prepared the commercial real estate study.

Local governments need to be prepared to share statistics that advertise those strengths, said Matthews.

Nearly 56 percent of the area’s workers have bachelor’s degrees, compared with the statewide average of about 39 percent and the national average of around 28 percent, the partnership’s reports said.

Commercial real estate, meanwhile, costs around $20 per square foot in the western suburbs on average, while Boston rents reach as high as $70 per square foot, said the reports.

Matthews admitted that the low rents partially derived from a problem reflected in the partnership’s reports: a vacancy rate in commercial space that’s greater than 20 percent, compared with a vacancy rate in Boston of around 13 percent.

Companies are filling in that empty space in the suburbs, however, with Marlborough leading the region.

The departures of Fidelity Investments in 2011 and Hewlett-Packard Co. in 2010 removed thousands of jobs and emptied nearly 1.5 million square feet of office space in Marlborough, causing the city’s vacancy rate to reach almost 35 percent in 2012, said Tim Cummings, executive director of the Marlborough Economic Development Corporation.

But in recent years, Boston Scientific, Quest Diagnostics, TJX Cos., and Wellington Management have either relocated or expanded in Marlborough, reducing the local vacancy rate for commercial property to around 22 percent last year, and investing millions in the local economy, said Cummings.

“We have done a Herculean job in bringing down the city’s vacancy rate,” he said, adding that the new or expanded businesses will generate a total of $2 million in annual tax revenues for Marlborough.

Cummings said he regularly talks to realtors who market commercial properties in order to help them make deals.

But he acknowledged that he could only do so much in those transactions. So he’s also pushing for zoning changes and expedited permitting, as well as improvements to enliven downtown Marlborough to demonstrate that the city is serious about becoming a better home for employees as well as businesses.

“It’s quality of life,” he said. “When we are meeting with prospective companies coming into the city or companies that are here in the city, all of them are interested and committed to providing a high quality of life for their human capital.”

The strategy appears to be working for small companies like CardioFocus and IQuum. Both have plans to grow as they conduct tests and await federal Food and Drug Administration approvals for new devices.

CardioFocus recently added a few thousand square feet to its manufacturing floor, said Sagon.

IQuum is on track to add as many as 15 workers soon, said Sutherby.

“We plan to hire significantly in 2014, from scientists to lab techs, assemblers and engineers,” he said.

John Dyer can be reached at johnjdyerjr@gmail.com.
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