March 17, 2020
Federal Street in downtown Boston was deserted as the city came to a virtual standstill during COVID. Traffic has returned, but nowhere near pre-pandemic levels. (Photo by Bruce Mohl)

WE ARE UNDERGOING a tectonic shift in the downtown office market that threatens the viability of our city’s urban business core. Unlike previous economic cycles, the decline in the office market is structural and will likely result in a dramatic oversupply of office space that could be permanent. So, what do we do to revitalize an essential part of our city?

Reinventing downtown cannot be done at the margins but will require a series of “moonshot” ideas to repurpose obsolete buildings, some of which are beginning to see owners handing back keys to lenders. The mayor and the Boston Planning and Development Agency are working hard behind the scenes to try to come up with ideas to help resuscitate downtown as its decline could have a serious impact on city tax revenues. It’s time to start thinking outside of the box and consider possibilities that have not been previously contemplated.

The following are eight ideas that could inject new life into the financial district, which has been forever changed by the at-home work culture resulting from COVID. The ideas are as follows:

Create an arts and entertainment district: Boston’s vital artist community has been squeezed out of many locations during the city’s real estate boom. Designating specific city blocks that could house artists and musicians could both revitalize buildings and energize outdoor life in these areas. Rent for these spaces could be limited to operating costs,which landlords are now absorbing without, in some cases, the offset of any income. The city could offer tax benefits to further incentivize developers who participate in this effort.

Build incubator space: There may be no city in America that has a better track record for innovation than Boston. To encourage more startups in Boston, landlords could create low-cost leasing opportunities for promising startups in exchange for future equity should those companies succeed. In effect, the landlord would be providing venture funding in the form of subsidized or free rent in exchange for the prospect of dramatic returns.

Build high value storage: The self-storage business is a nearly $29 billion industry across the country yet is often in inconvenient locations. A specific niche in the storage business for art, collectible cars, and high value items could be created within many empty office buildings and provide much needed venues for those who want to easily access their belongings. As people downsize into luxury downtown apartments and condominiums, the need for storage has increased and could be a viable use for otherwise empty office buildings.

Build vertical automobile showroom: As we have witnessed with Tesla, which has taken a radical approach to car sales, converting a building to car sales is an idea that has been used successfully in downtown Manhattan. The concept of vertical car storage for sales could be applied to specific downtown buildings with load capacity to handle heavy equipment.

Create affordable housing: Creating affordable housing in the downtown core is a challenge because few buildings lend themselves to economically feasible adaptation. However, there are potentially failing hotels and other sites that could be modified to affordable housing given the subsidies provided by state and federal agencies that could make this viable. For proof of concept, look no further than 140 Clarendon St.  I, along with Beacon Communities and state/city officials, created studio apartments for 100 formally homeless people in one of Boston’s most desirable neighborhoods.

Attract urban colleges and universities: Boston has the highest density of educational institutions in the United States and barriers to entry for new schools or their expansion has been challenged by the high cost of real estate. Vacant or underutilized downtown office buildings could be an opportunity for the formation of new schools or the expansion of existing ones at a cost not seen for decades. Imagine a school dedicated toward real estate or hotel management that was actually located in an office building or adjacent to a lodging facility.  Just look to Washington, DC, to see how many schools from the West Coast and Midwest now have outposts in the nation’s capital.

Urban vocational schools could also be an ideal use for an empty office building and provide easy access to those who rely on public transportation. Franklin Cummings Tech is an example of just how important real estate is to vocational education.

Establish athletic entertainment complexes: Companies like Apex Entertainment have perfected the concept of providing single location sports facilities designed for families. The facilities include arcades, go karts, mini golf, rock climbing among other activities. The conversion of office buildings to family entertainment centers would seem to be highly feasible as many have large open atriums that could host a variety of functions. Spaces with more conventional ceiling heights could be easily used for putting greens, arcades, pool, and ping pong and more trendy activities including axe throwing and golf simulators. The roof of an office building could be converted into a driving range with large nets typified by TopGolf that have venues throughout the country. A downtown family entertainment complex would generate pedestrian traffic on the streets and help revitalize the dormant restaurant and retail businesses that are suffering from the decline of downtown Boston.

Attract urban medical facilities: Walk-in medical facilities have sprung up in many suburban locations as have satellite offices for our major hospitals. A revitalized downtown could increase foot traffic and make downtown medical clinics feasible. These facilities would have the added benefit of reliving some of the pressure on hospital emergency rooms.

A vital downtown supports business, tourism, tax generation, and quality of life in Boston and a coordinated plan is essential to revitalize the urban core of our city. If any city can create innovative solutions to vexing problems, it is us but the time for creative thinking is now.

Bruce A. Percelay is the chair of the Mount Vernon Company, a Boston-based real estate development firm.