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By Will Mbah
Candidate for Somerville City Councilor at Large

In the business press recently, I have seen several articles discussing the problem of shrinking retail activity. Then, with the news about the bankruptcy of the Christmas Tree Shop at Assembly Row, I thought it important to consider what may be the impacts of the trends of change in retail trade for Somerville?

Before COVID, our city planners were already thinking about how e-commerce was changing our shopping habits. Several “big box” stores in the city had become vacant, including part of the Somerville Avenue Target plaza (now a medical clinic) and the K-Mart at Assembly Square (now being re constructed for offices). After COVID, Bed/Bath and Beyond and Christmas Tree Shop at Assembly also have closed.

The planners have described these big box closures as an opportunity to phase out auto-oriented and energy inefficient retail spaces. In the neighborhood plans and the 2019 Zoning Ordinance they wrote new standards to require smaller retail storefronts with pedestrian oriented architectural features.

In this way, they expected that small local businesses would fill new spaces. They listed as permitted uses, all the daily services that people need – barbers and cleaners, wellness and childcare, coffee and baked goods. They permitted independent businesses “by right” but required “formula” retail operations to get special permits. When granting such permits the ZBA and Planning Board could attach multiple conditions to make modern stores look and feel like mom and pop shops.

Using other tools of design review, small business and cultural/arts grants, they expected to increase diverse and lively local commerce.

Economic development

Contemporary planning theory has defined retail trade as a sector that can create jobs, attract investment, generate “multiplier” spending, and add value to properties – creating new wealth from which communities can draw capital and revenue for physical amenities and social benefits.

In the city’s “linkage” studies, market-rate rents from ground floor retail are expected to carry building maintenance costs so that upstairs residential rents can stay at moderate levels. Similarly, ground floor spaces and stand-alone retail buildings are expected to pay taxes at the higher-level commercial rates, helping to offset the burden on residential tax payers.

Despite the theories, it is now difficult to see evidence that the expected spatial, functional, economic or value-generating impacts are being realized.

Recently, local planners have analyzed the data, looking at the trends of: (i) commercial assessments; (ii) retail employment and business formations; and (iii) building permits and Planning Board and ZBA approvals. All three data sets show declining numbers and trends for the retail sub-sector.

Property assessment

The city’s assessors have been decreasing the values of retail and ground floor properties across the city from FY2020 to FY2023. Most clear are the data on stand-alone retail buildings and commercial condo units. For example, at Assembly Square, a sample of six stand-alone retail buildings has shown a drop in assessed values within the range of 13.2% (391 Revolution) to 15.4% (375 Assembly Row).

At Union Square, the ground floor commercial condo at 181 Washington Street (now occupied by a dental clinic) has dropped by 7.9% in value between FY22 and FY23, compared with a gain of 7.1% for the upper floor residential condos. Next door at 197 Washington, the upper floor condos have increased in value in the range of 6.3 to 6.9%, while the ground floor condo (a restaurant and barber shop) has declined by 2.1% since 2020.

Stretched across the city similar declines in assessment add up to a loss of millions of commercial tax dollars. Of course these losses are currently offset by the revenue gains from new lab buildings coming on line. But the longer trend appears to be a shift of balance among the sectors of commercial and residential tax base that should be better understood. We may also need to recalibrate in our planning the potential of off-budget contributions and community benefits from mixed-use developments.

Jobs in retail and services

Another aspect of economic planning that may require adjustment is the expectation that retail and local services will continue to provide employment and opportunities for entrepreneurs. Our workforce training programs often look to the retail sector to find jobs for youth and entry-level workers. But even before COVID, retail employment was not growing in tandem with the city’s growth in wealth and population. Retail employment crashed in 2020 and businesses relied on PPP loans for temporary relief. Post-COVID employment and business revival in retail and services has lagged behind other sectors.

In December 2019 the state Department of Economic Research database showed the retail sector in Somerville with 3,698 workers in 210 business units. In December 2023 these figures were at 3,471 workers in 206 business units. This was before the shut-down of Bed and Bath and the Christmas Tree Shop with loss of about 100 jobs.

What is in our neighborhood plans?

Looking at the retail spaces, newly built since 2016 or permitted and under construction, the “pipeline” totals several hundred thousand new square feet of retail space to be filled. Unfortunately, riding and walking around town, we can see many of these spaces remaining vacant or occupied by non-retail activities – such as co-working spaces and medical offices with tinted windows, rather than the lively, sidewalk oriented activity envisioned in the plans. In Boston, Mayor Wu appears to be considering new subsidies for retail businesses and workers to revive dead downtown streets. Hopefully, we will not reach this point in Somerville, but it does appear that our visionary neighborhood planning could use a dose of economic reality.

If you want to learn more or support my campaign, please visit my website at willmbah.com.