Business for Shared Prosperity

Boston Globe
Editorial, 5/21/08

THE BELLA LUNA restaurant in the Hyde Square section of Jamaica Plain is the business equivalent of the person who puts a spouse through medical school, only to get shunted aside when someone slicker comes along. There is rarely doubt in such cases about where the loyalty of friends and neighbors will rest.

About 250 such neighbors strategized ways to protect their business districts and housing stock during a Jamaica Plain neighborhood summit on Saturday. They protested sharp increases in commercial rents that threaten to displace long-time businesses that lend stability and character to the neighborhood. The owners of Bella Luna, who also operate a nightspot featuring dancing and bowling, will be vacating Hyde Square in March due to their landlord's demand for an 85 percent rent hike, according to co-owner Kathie Mainzer. But Mainzer, who now pays about $13,000 a month for rent, is not leaving quietly.

"There are protections for residential tenants," says Mainzer. "What about for commercial tenants?"

Outside of this summit packed with liberal activists, there is little appetite for any form of commercial rent control in Boston. The idea flashed briefly and then flickered out in New York City in the 1980s. Mayor Menino says he sees no future for such an ordinance here. But Bostonians need to recognize how closely the health of their neighborhoods depends on the prosperity of local businesses. And city officials will need to find better ways, short of commercial rent control, to help businesses that set up shop in rundown neighborhoods - only to be squeezed by higher rents when those neighborhoods begin to thrive.

When Bella Luna opened in 1993, crime and grime plagued Hyde Square. Over the ensuing years, the happy bustle from the restaurant and club went a long way toward changing public perceptions of the area. A similar transformation took place a few miles away in Roslindale Square, another area where pioneering shopowners are clashing with landlords. A popular boutique, Zia, closed last year, leaving a big hole on Birch Street. Other storefronts sit empty in the area, or attract tenants that don't fit as well with the city's mom-and-pop Main Streets village philosophy. T-Mobile, for example, recently filled space formerly occupied by a shoe store.

Landlord's lament Stavros Frantzis, who owns several commercial properties in Roslindale Square, says it is unfair to make landlords the scapegoat for wider economic changes. Some activists, he says, talk a good game of local control while rushing off to suburban big-box stores to shop. At about $25 per square foot, lease rates in Roslindale Square are reasonable, he says. And critics too often overlook the fact that it was the landlords and developers who took the initial risk by redeveloping properties in areas given up for lost. Mordechai Levin, Bella Luna's landlord, is credited with transforming blighted land in Jamaica Plain's Jackson Square into an active business district, for example.

But the interests of landlords can diverge in significant ways from those of neighborhood businesses and their customers - and not just in rapidly gentrifying areas. Property owners see empty storefronts as golden opportunities, even if it requires months of waiting for the market to turn. Residents take a dimmer view. Similar to abandoned homes, empty stores invite trouble and spur disinvestment.

Creative options Where possible, nonprofit landlords are stepping up. The Jamaica Plain Neighborhood Development Corporation, which organized the summit, charges commercial tenants about 25 percent less than market value at its 16-building complex in a former brewery site in Jamaica Plain. Bella Luna is slated to move to the brewery building next year, according to NDC director Richard Thal. It could work as a business solution. But it still leaves a hole in the middle of Hyde Square.

Evelyn Friedman, the director of the city's Department of Neighborhood Development, is casting around for new solutions. While commercial rent control is a nonstarter, she can envision a system that sets limits on rent hikes in commercial developments where the city is providing direct subsidies in the form tax credits, low interest loans or grants.

Even more creative is a city plan to help local businesses cope with rising rents by offsetting high energy costs. In June, Friedman will be meeting with an energy consultant to determine if area restaurants or other businesses could form cooperatives to buy discounted gas or electricity in the wholesale energy market. Friedman is even exploring the legality of neighborhood restaurants joining with the city's school department to buy food products at bulk discounts.

Boston Main Streets, a city department that supports local business districts, also offers a "community change card" that allows customers to receive a small rebate and make a donation to local nonprofit groups with discounts from participating stores and restaurants. Bella Luna is one such business. "We're always listening, adapting, and modifying," says Mainzer.

Commercial landlords should listen, too. It's a better strategy for building businesses and cities than sitting around waiting for prices to go up.

Copyright 2008 The New York Times Company