With the events surrounding the Boston Marathon bombing last week, I have found it difficult to think about much else. Xconomy had previously invited me to write about the upcoming transformation MIT is bringing to Kendall Square. When it came time to sit down and write this piece, my first reaction was to pass. But my second reaction was: why? Hey, this is the kind of stuff we should be focused on: strengthening our community and finding ways to do a better job innovating solutions to the world’s problems.
So it was very exciting for me earlier this month when the Cambridge City Council voted to approve a landmark set of rules that govern how Kendall Square will grow in the future. These rules will have far-reaching consequences for Kendall Square, but also will serve as a blueprint for other tech clusters around the world. It is not a surprise that the Wall Street Journal saw fit to cover these changes: the world is watching.
For readers not familiar with the area, Kendall Square sits at the epicenter of the Massachusetts innovation economy. Massachusetts boasts a lot of venture capital investment—more than California on a per capita basis. So it is saying a lot when you hear that fully a third of that is invested in the small town of Cambridge. And most of that in invested in this little neighborhood of Cambridge called Kendall Square. Kendall Square is undoubtedly the highest-density cluster of innovation on the planet. (Yes, California has more VC investment overall, but nowhere as dense as the blocks around MIT.)
The new rules were proposed to the city by MIT. What did they ask for? Some of the elements are pretty standard. A part of this was simply a university requesting permission to build office towers on a part of its campus where it had asphalt parking lots.
Another more significant change reflects the changing psychology of the modern research institution. Historically MIT’s “front door” has always been 77 Mass Ave: a building facing… more of MIT itself. MIT was, and to some is, an island—as is the case with many of the world’s leading research institutions. But MIT is also famous for its thirst for applying its inventions. In the past decades, the area around MIT, much of it once parking lots, has become synonymous with the notion of an “innovation cluster.”
Large numbers of rapidly growing tech, life sciences, and energy companies now crowd tightly around the school. The result is an emerging model for how to do innovation right: creating density and intensity of commercial activity around a scientific institution. Has this worked? Here’s one measure: a BCG study showed that MIT has nearly five times the concentration of startups around it as Stanford does.
Underscoring the importance of the symbiosis of research university and innovation cluster, MIT plans now to build a new, 21st century “front door” at the Kendall Square subway station, facing the center of Kendall Square.
When property owners ask for the right to build bigger buildings, there is traditionally a negotiation that takes place with the surrounding community in which the community’s needs are considered, and various accommodations are made. Perhaps a park is built, or a jobs-training program is created. Reading the list of the accommodations that are negotiated in a given project is a means of peering into the soul of a community at a particular point in time. It says something about our values as a community.
So what was in MIT’s list? There are indeed park-building and job-training programs contained therein. Importantly, local retail got a nod, with a commitment to have substantial amounts of retail space along with a rule that at least half of that may only be leased to local, non-chain operators. This reflects a growing sense that innovation clusters must be “livable” and that an important part of being livable is being hip, creative, and local.
Housing also got a major nod, with the creation of hundreds of new housing units, including some of the trendy new “micro-housing” that is seen as a market-based cure for the climbing cost of housing. Housing and retail go together. They are the building blocks of creating life and energy in a neighborhood.
Modern, sustainable transportation—better walking, biking and public transit options—and green buildings are also widely seen as key elements for drawing innovators to an area. So, not surprisingly, the petition requires all the new buildings will meet the LEED Gold standard. And MIT committed to work to resolve an old logjam that has prevented the creation of a bike path along a tantalizingly well-placed railway right of way that runs through Kendall Square: the old Grand Junction Railroad.
Notwithstanding all of the above great things, what has really made this new set of Kendall Square rules front-page reading is the requirement to set aside a meaningful portion of the new space for startups—a provision widely seen as a first in the nation.
Zoning law has long enshrined the notion of setting aside space for certain categories of use that are important to a community, such as housing and retail. What this zoning does, for the first time, is to explicitly embrace startup space as one of those categories which must be planned for and protected to ensure the healthy overall neighborhood. This provision implicitly acknowledges the innovation lifecycle: an invention or discovery occurs, often at a major university; a small startup spins out, often led by a graduate student with a professor lending a hand; that startup locates as close as possible to the university with a team splitting their time between school and the new project; eventually angel investors and VCs get involved, injecting financial resources that allow the startup to grow and mature; eventually a few of these become an Akamai, Biogen, or Google. These winners create thousands of high-paying jobs and solve problems to the betterment of all.
Specifically, the proposal requires that 5 percent of all new office space be set aside as “innovation space,” defined as
