The Innovation City creates jobs through targeted investments

On July 26, 2013, in Latest News, by The Somerville Times

mayor_webBy Joseph A. Curtatone

(The opinions and views expressed in the commentaries of The  Somerville News belong solely to the authors of those commentaries and  do not reflect the views or opinions of The Somerville News, its staff  or publishers.)

Last week we welcomed one of the country’s largest clean energy and tech incubators, Greentown Labs, to its new home in our city. Greentown is moving from its current location in the Boston Innovation District not to just another innovation center or district, but to the Innovation City, that’s us. Somerville prides itself on innovation, creativity and originality and companies that hold these values are taking note and moving here, and bringing good jobs with them.

With a new space in the former Ames Envelope facility at 28 Dane St. that is roughly twice the size of Greentown Labs’ former location in Boston, the company brings to Somerville almost 100 jobs with plans to expand to more than 140. But Greentown’s move isn’t the start of a movement. It’s a sign that an urban renaissance already underway is picking up speed, with Somerville at the vanguard.

We are attracting these 21st century industries that will serve as the foundation for the new economy with our vision for the future, our work on planning and zoning, our infrastructure improvements and business and economic development policy. Greentown Labs follows fellow innovative companies and organizations like Artisan’s Asylym, Fringe, Cuppow, Recover Green Roofs, The Grommet and Sunbug Solar in either moving to Somerville or establishing themselves in our city. Even the Cambridge Innovation Center (yes, I said Cambridge) has set up a satellite arm in Somerville so they don’t miss out on the energy and excitement here.

Somerville leads this movement by planning and investing today with an eye on tomorrow, something we started 10 years ago by targeting economic sectors forecasted to grow during this decade, such as green energy and precision manufacturing. Creating an environment where new economy businesses can take root and flourish requires a holistic approach that addresses all the systems that create that environment. As Gov. Deval Patrick said last week during our event at Greentown Labs’ new home, if we are to compete in the new economy and create a thriving, 21st century economic environment, we must invest in innovation, too often overlooked infrastructure needs and education.

That is exactly what we are doing here in Somerville. The city Facilitated Greentown Labs’ move through a $300,000 working capital loan that utilizes federal Community Development Block Grant funds. This loan requires that not less than 51 percent of new job hires go to those who meet moderate- and low-income standards, and that Greentown Labs agrees to use its best efforts to hire Somerville residents in all available job opportunities. The city is also formalizing this type of direct investment in innovation with our new I-Fund, a $1 million flexible loan program that supports the growth of innovative businesses in the city and contains the same requirements as the loan given to Greentown Labs.

We continue to aggressively invest in our infrastructure, both the utilities beneath the ground necessary for industries and residents alike, and in creating the active, walkable, bikeable and transit-oriented neighborhoods that allow employees to live near where they work. We are investing in the overhaul of Union Square’s streetscape, in planning the future of the Brickbottom and Inner Belt neighborhoods and the Green Line Extension corridor, all investments that will pay back tenfold in future years as these areas evolve into regional employment centers with new offices, housing and businesses that expand the city’s tax base. Infrastructure investment is paramount to unlocking the economic potential of Somerville.

Education is a cornerstone of the city’s budget for the coming year and represents Somerville’s highest ever investment in our schools, beginning to phase in universal preschool and providing more students than ever before hands-on experiences with cutting edge science and technology. In 2011, the Massachusetts Biotechnology Council named Somerville High School its “Innovative School of the Year” for investing in laboratory space, creating specialized new courses for science students, and establishing partnerships with research universities and industry giants. We are not only bringing innovative industries to Somerville, but preparing our students today for jobs in the industries of tomorrow.

Today Somerville has 45,000 workers, but only 20,000 jobs. Our 20-year comprehensive SomerVision plan sets forth an ambitious goal of creating 30,000 new jobs by 2030, bringing these numbers into better balance. Earlier this month, our Jobs Advisory Committee presented its formal findings, which noted that Somerville has enjoyed a 4 percent unemployment rate in recent months—lower than national and state averages—and 60 percent of the city’s workforce is between the ages of 18 and 34, those primed to capitalize on opportunities presented by the next-generation industries we are attracting to Somerville. But the jobs we create should be for all Somerville residents. Thus the Jobs Advisory Committee also called for improving workforce readiness by building job and career skills, so that older residents and those with the equivalent of a high school diploma can also compete in the 21st century economy.

Somerville is positioned to continue leading the urban renaissance, not just in Massachusetts but nationwide. We will meet that goal of 30,000 jobs. We are preparing our residents. We are investing in innovation, infrastructure and education. We saw the new industrial revolution coming, we put in the work early and together we will reap the benefits.

 

11 Responses to “The Innovation City creates jobs through targeted investments”

  1. Barry the Pig says:

    Joe sees “Innovation City”, I see another Stockton, CA, in the making.

    For those of you who do not remember: http://nation.time.com/2013/07/25/the-wages-of-bankruptcy-stocktons-cautionary-tale-for-detroit/

  2. Matt says:

    Barry, I don’t think you can compare Stockton to Somerville… They really have nothing in common. We are not near insolvency, We are part of a major metro area. Stockton went down primarily due to last tax receipts because of the banking crises.

    Unless you can come up with some real facts, or at least some parallels quit the fear mongering.

  3. Steve Keenan says:

    If you check the City of Somerville’s credit and bond rating, it appears that Somerville is in good shape. Relax and look to the future. And stay involved in the City of Somerville’s affairs and doings. Citizen paticipation and information gathering is key! God bless all!

  4. ritepride says:

    All the cuts over the past couple of decades (Prop 2+half, budget cuts, etc.) resulting in major personnel loss (lay-offs). naturally we should be in good shape……..but ! ! !.

    All of the past and present administrations increase in their added hack positions have negated any real cost savings. Meanwhile the cutback of real workers who delivered real services, (Police, Fire, DPW) results in real service delays or non service to the citizens.

    The city’s contracting out of city services in the end cost the taxpayers more money.

  5. Bostom says:

    Matt and Steve,

    The city’s last offering this May of was indeed assigned an MIG1 rating – the highest possible offered by Moody’s Investors Services, a nationally recognized and respected bond rating service.

    Stockton, California’s municipal bonds issued in 2009 – sold after the Wall Street collapse and well into the most recent period of California’s precipitous financial decline, received the exact same rating from Moody’s: MIG1. As Steve rightly notes, citizen participation and information gathering are key. Looking to the future with an eye on the past, I can see that four years is not a very long time, especially for a bondholder.

    Moody’s nonetheless notes several ongoing and as yet unresolved issues regarding the City of Somerville’s financial situation: an above-average overall debt burden, sizable long-term liabilities to employee pensions (Somerville’s employee pension plans are only 60% funded per the latest numbers I could find from 2011 with the hope to fully fund the plan by 2026 assuming a truly optimistic 8.25% rate of return), and socio-economic indices that trail the state’s median.

    In simpler terms, we’re a city of relatively poorer residents with a higher percentage of municipal debt to income (as compared to the rest of the Commonwealth) with a great big hole in our municipal pension plan to be remedied in no small part by over-optimistic projections instead a higher contributions. Not to mention that we have one of the worst-performing public school systems in Massachusetts, hardly a good augury for our future growth and success.

    Most of Somerville’s tax base growth in the past decade or two has come from condo conversions which 1: are limited by the declining stock of multi-family homes suitable and available for profitable conversion (as so many are already condos) and 2: condominium valuations are historically the most volatile, more subject to housing market variations, up as well as down, than single- or multi-family homes. They usually rise in value (or at least in price) faster than the market as a whole when it rises and their sales prices decline at a faster rate when it drops as well, most often because they have become the “starter home” of this generation, are usually more highly leveraged with less equity than other housing types because they tend to attract younger, hence more transient, owners who live in them for shorter periods in the hope of using them as a stepping stone to another property, more often than not a single family home. Until the music stopped around 2007 – 2008, price appreciation help make this scenario true, a situation we no longer enjoy.

    In other words, pray for a constantly rising housing market in the future, because recent history shows us just the opposite: both a steep decline beginning in 2007 and since then, a much slower rate of appreciation in housing prices. One other note of caution; Somerville ranks 745th out of almost 27,000 municipalities surveyed with a relatively high percentage of residents – those most likely to move – living in condos and apartment buildings.

    We’re not Stockton, but we’re not Wellesley or Beverly Hills, either. It’s true that we enjoy a growing local economy, as Stockton once did, at least in part fueled the same way; with greater revenue from increased housing values. Like Stockton, which invested heavily in infrastructure (in their case, to build a riverfront marina in an effort to transform a blighted portion of downtown), Somerville too is using tax money in an attempt to turn an underutilized waterfront site into a source of tax revenue. Let’s hope we have better luck than they did and take some comfort that we’re in lot better shape figuratively, financially, and physically.

    Unlike Stockton, we’re not the tenth most dangerous city in America, or one of the ten most miserable, nor are we ranked seventh nationally in auto thefts or the third least literate among cities with a population under 250,000, and thank god we’re not tied, as is Stockton, with Montgomery, Alabama as the most obese city in America.

    But while the mayor points with pride to an award for investing in lab space at Somerville High, the city’s schools still rank 21st from the worst in terms of academic accomplishment in the state (#306 out of 327) based on data from the National Center for Education Statistics, the U.S. Dept of Education, and the MA Dept. of Education. Only truly massive improvements in educational accomplishment by teachers and students alike can make this truly “The Innovation City.” Since, again according to the latest figures I could find (for 2011 from the MA DOE) Somerville spends almost $3,000 more than the state average per pupil and gets abysmal results, we may be more like Stockton sooner than we think if
    we don’t start turning out more accomplished students who can get the jobs that will allow them to continue living here.

    Bottom line: a good, nay, great bond-rating isn’t everything. It’s about how the money is spent. A little more money and much more accountability in our school system will go a lot further to make Somerville a better place to live (and at the same time increase revenue by stabilizing home prices: Newton and Brookline, for example, didn’t suffer much during the price downturn) than Assembly Square, dedicated bicycle lanes, back-in parking, and a festival a week ever can.

  6. Barry the Pig says:

    From what I remember (my sister lived in Stockton and she was shocked when it all went downhill because she remembered the MIG1 rating not too long ago), they spent a lot of money building a useless stadium… There is a ton of money wasted on fluff in Somerville that reminds me of that, folks. Perhaps Joe is calculating that when the s**t hits the fun he’ll be outta here. If I was a Villen with a partially funded pension plan, I would not feel very comfortable…

  7. Steve Keenan says:

    Thank you to Bostom for the comments and information. It was educational and informative and I learned from them.

  8. Alan Bingham says:

    Have a look at the innovation going on in Somerville, such as what is fostered under the Artisan’s Asylum, etc., and the longer term Somervision plan. While we do have some waste and the city does not address the issues all the time in the best light, it is good to see the Somerville dynamic. Avoiding the Fallacy of Centralism, where we believe that the universe rotates around us and we have the vision is a big problem. We need preserve what is good, develop what is needed in the right places and not just pursue an abstract dream not couched in reality. This means aligning the city vision with the needs and wants of the residents.

  9. TimT says:

    Greentown Labs is great news!

    Interesting Bostom, but I disagree with your final paragraph. You neglect to mention the unique quality of life offered in Somerville which very few other places can match – those bicycle lanes, festivals and urban walkability are things that help make the city special. Where else (except for Cambridge and parts of Boston) can one raise their children without depending on a car? These things aren’t a distraction, but a critical part of making the city nicer for existing residents and continuing to attract interesting, talented people who choose to live here and will invest in the future of the city (thereby improving some of the other issues…).

    Not sure where you have been looking to find a steep decline in housing prices. Head to an open house this weekend to see throngs competing to offer well over 2007 peak prices.

  10. Bostom says:

    Tim,

    The unique quality of life you find unmatched by very few places is exactly why people aren’t raising their children in Somerville while not depending on a car. Although I question the wisdom of that approach when a sick child needs to see a doctor pronto and not when a cab or the 86 bus comes by. People with children who value their kids’ futures and expect their (high and ever higher) taxes will pay for a better school system than the one we have aren’t staying in Somerville – it’s start here, party in Davis, settle down, buy (more often than not a condo), have a kid or kids and hope the appreciation will be enough by the time those kids are 4 or 5 to find something with more bedrooms in suburbia, like perhaps in Lexington – less than ten miles from here with the best school system in the state – not one of the worst as we have here, less than ten miles from Lexington.

    I’m well aware of the (unsustainable) prices now asked for places in Somerville. Are you suggesting it’s a good idea to ignore recent (and ancient) history? As in “what goes up must come down”. Read what I wrote: “condominium valuations are historically the most volatile, more subject to housing market variations, up as well as down, than single- or multi-family homes. They usually rise in value (or at least in price) faster than the market as a whole when it rises and their sales prices decline at a faster rate when it drops as well.” Just as an FYI, Malden and Medford are the “New Somerville”, as even the RE agents are lumping them together knowing first-time buyers can’t afford anything here. A young couple I know wanted to buy a single family home in Somerville last year, had $500,000 to spend and had a choice of 8 properties to look at – the best being one where they were told not to go in the bathroom for fear the floor would collapse, most if not all the rest were teardowns or located next to 93. One of my doctors, herself married to a doctor, want to live in Somerville but can’t afford anything they could stay in when their kids are old enough for school on two MD’s salaries. How long do you think this bubble is going to last until it bursts again? I’d be very leery of buying something here now if this were 2006 all over again and next year was 2007 redux. Don’t mention the wisdom of crowds, either. Plenty of people made bad decisions before and I expect more are making the same bad choices today.

    In the meantime, those of us who have lived here for a long time and want to stay find it harder and harder to do in the face of rising taxes. I don’t want to ride a real estate roller coaster nor do I want to “cash in” at the top of the market. Communities aren’t built that way. Likewise they aren’t built by the city paying for job-creation projects which would be built and housed here if developers thought they could profit by doing so.

    I want to live here until I die; I want to see Somerville’s kids get the education they need to compete in today’s job market – one that requires far better skills than those being taught in Somerville’s schools – just look at the rankings; and I detest the way I see money being squandered by laying off cops and firemen, not paying enough teachers enough money to attract great ones, and instead hiring more Kennedy School MPA’s and high-salaried administrators whose job responsibilities seem to be far more focused on the mayor’s political future than any value they bring to the city or those whose taxes fund it.

  11. MarketMan says:

    Bostom: I agree with much of what you said on this thread and found some of your information informative to me. But I have to disagree with some of your arguments. I do think the home prices in Somerville are high, but disagree that they are unsustainable. There are several factors at play that make them so high and why I think they will continue to be high. There continue to be more jobs being created in Boston and Cambridge (and to a much lesser degree, Somerville). High tech and biotech giants and startups continue to crowd in Kendall Square and other areas. Those bring in lots of highly talented individuals demanding high paying jobs, and many of them want to live near their job and near urban amenities. Many are young professionals without kids, but many are also young families that would like to stay in the urban core. The younger generation often prefers to give up the larger house, yard, and isolating car-centric lifestyle for the urban amenities that make people feel like part of a community. Many of those people struggle with decisions when their children become school aged, and as you point out, they often move to the suburbs. But they do so reluctantly. If the city offered better schools, they would stay. Well, there are an increasing number of people that choose to stay and deal with the schools, for better or for worse. Those people aren’t less education focus, but they are optimistic that they can make things work out for their kids. In some ways, they are paving the road ahead. If the number of families that stay reaches a critical mass, then the schools begin to improve. Once that momentum starts, then more families may choose to stay and real estate demand and values will sustain themselves. My understanding is that this happened in Arlington (although much less urban) and seems to have happened in Cambridge somewhat and Somerville in the Brown School area. It may be completely optimistic that it will happen as cleanly as I describe. It may not happen at all. But it could happen.

    How two MDs cannot afford to live in Somerville is beyond me. I suppose it depends on their education loans and choices of home, school, etc. In any case, to the point of sustainable prices… families don’t have to afford to live here to maintain high prices. There are enough high-earning DINKs to keep prices high. Prices in West Somerville did not dip much in the 2007-2013 time frame, so I disagree with what you wrote about condo volatility. Also, your example about couple with $500k doesn’t surprise me, but the same thing could be said about many towns around here. I know many people with the same budget having a hard time trying to find something within 128!

Leave a Reply

*