Harvard squeezes Pepsi out of Allston

By Mark Micheli, Journal Staff, Feb 3, 2003

The Pepsi Bottling Group Inc., a fixture in North Allston for 47 years, is moving to Canton after Harvard University, its landlord, would not extend the distribution center’s long-term lease.

The university’s practice of agreeing only to short-term leases as long-term business leases expire already has caused some businesses to move, while other business owners worry they’ll be forced out.

Pepsi Bottling’s 30-year lease on its distribution site expired last November, and Harvard would not offer another long-term lease, according to Pepsi Bottling spokeswoman Kelly McAndrew. The company would have liked to remain in that location, but understood that Harvard had plans for the site, she said.

Pepsi Bottling is hoping to break ground on a 58,000-square-foot building at 100 John Road in the Canton Commerce Center this spring, with plans of moving its operations there in the fall, McAndrew said.

Bottling Company has no hard feelings

“They (Harvard) have been great to work with,” McAndrew offered. “They allowed us to extend our lease a few more months.” She conceded that although the move south may cause a hardship for some employees who live in the city or north of Boston, the company chose the Canton location because it can better serve its customers from that area.

Harvard bought the 60,000-square-foot building about 18 months ago from WGBH-TV, adding to the 1 million square feet of building space it has bought in Allston over the past 15 years and is waiting to develop, according to Kathy Spiegelman, Harvard’s chief planner and director of the school’s Allston Initiative. She noted that the school owns another 3 million square feet of building space in Allston that is already part of its campus.

Spiegelman said school officials won’t enter into any long-term leases on this property because they want to remain flexible in their development plans. And this is causing some concern among business owners, who worry they’ll eventually be forced out, said Susan Hartnett, the Boston Redevelopment Authority’s director of economic development.

Harvard’s redevelopment plans ‘will happen over the next decade or longer’

“When you’re a business owner, the most important thing is predictability. We’ve shared these concerns with Harvard,” Hartnett said. A key point for businesses to understand, Hartnett said, is that Harvard’s development plans are not going to happen tomorrow. The redevelopment of that part of the city is expected to happen over the next decade or longer, she explained, and there has been no agreement between Harvard and the city on several key issues.

Spiegelman said Harvard has no immediate plans for the Pepsi distribution site at 130 Western Ave. or for the approximately 1 million square feet of building space it owns in mostly one-story warehouses situated on about 100 acres of land in Allston. She said Harvard has been helping the city develop a master plan for the North Allston area over the past two years and that a report from Boston consultant Goody, Clancy & Associates which the city hired and Harvard paid for is expected to be released in the spring.

Mixed housing for graduate students that would include some affordable housing units for city residents is likely to be the first development project, Spiegelman said. She noted that the university is now considering building a modern art museum in Allston instead of across the river in Cambridge, where it was originally proposed then shot down by a resident group.

However, she emphasized that nothing is currently on the drawing boards and won’t be until after a thorough review is made of the Goody Clancy report.

For most businesses, monthly or even one-year leases don’t make economic sense or provide enough incentive to stay. That’s why John Cini, an owner of High Output Inc., said he moved his 53,000-square-foot film lighting and studio operation from Allston to Canton last November. Cini said his 10-year lease at 184 Everett St. in Allston expired in June 2001 and the school would only renew it on a year-to-year basis, which wasn’t acceptable to him.

“I don’t feel that I was wronged by Harvard. I don’t appreciate that we had to move, but I understand it was a business decision of theirs,” he said. Cini said he looked for affordable rental space in the city, and when he couldn’t find a satisfactory site, he settled in a 93,000-square-foot building in Canton.

“It was a very hard decision. We were there for a very long time,” Cini said. He also noted that the move was a hardship for some of his 50 employees, many of whom don’t drive. He said the company has set up carpooling arrangements and also subsidizes public transportation to their new facility.

Cini said he didn’t realize Harvard owned the building he rented in Allston until the mid-1990s, having always paid the rent to the Beal Cos. LLC, a real estate management company hired by the school. Other business owners said they were also kept in the dark about the identity of their landlord, contending that Harvard didn’t want publicity as it bought up parcel after parcel over the past 15 years.

Acquisition an ‘opportunity’

Spiegelman said the school has traditionally added 1 million to 1.5 million square feet to its campus each decade and wasn’t able to find enough space to expand in Cambridge or in the Longwood medical area, so it turned to Allston.

“The acquisition of the land in Allston was an opportunity. The land seemed underutilized and not particularly attractive to Allston and the city,” Spiegelman said. She added that they have been very public with their plans and have been working closely with city officials to mesh Harvard’s development plans with the desires of city officials and the needs of the community. She said the school has no plans to buy more large parcels of land in Allston, but is interested in acquiring a few small, strategic lots.

Spiegelman, who refers to the area as being in “economic transition,” contends residents of the area don’t see these industrial businesses as compatible and that transforming the neighborhood into a Harvard campus would be a positive change.

However, transforming 100 acres of land from mostly industrial use to educational and housing use would seem to be in conflict with the city’s Back Streets program, a 1-year-old initiative that seeks to keep industrial and commercial businesses in the city. One of that program’s top goals is to allow “no net loss of industrial space.”

“We’re not shying away from (our commitment to) ‘no net loss’,” said Hartnett at the BRA. “But there are other ways to achieve that.”

She has said that the trick is to create buffer zones between industrial and residential areas and that “no net loss of industrial space” also means no net loss in jobs and no net loss in the total amount of revenue these businesses are earning.

Hartnett pointed out that the city has not approved any zoning changes in Allston and is working with Harvard to create a long-term development plan that could include a mixture of academic and industrial space similar to the way the Massachusetts Institute of Technology helped develop Cambridge’s Kendall Square area.

Although Hartnett didn’t know how many of those businesses rent from Harvard, she said that of 40 businesses returning an in-depth survey, 12 were Harvard tenants.

For businesses that have to relocate, the city’s Back Streets program can help them find new space, Hartnett said. She noted there are large tracts of industrially zoned property available in the city, including in Charlestown, Dorchester, East Boston, Hyde Park and the Marine Industrial Park in South Boston.

Meanwhile, rumors continue to circulate among North Allston’s industrial tenants, who wonder when they’ll have to pack up and go.

Emil Krastanov, the owner of Art Sign Express Inc., who rents about 2,000 square feet of space from Harvard at 90 Windom St. in Allston, said he has heard those rumors and worries that he won’t be able to find alternative space in the city. He said his lease expired about a year ago and he has been a tenant-at-will ever since. He added that his business needs to be in Boston, but he is not confident he’ll be able to remain.

“It’s very hard to find space,” he said. “I’ve been looking, but rents are so expensive.”