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Corporate Suburban Flight Gets Resistance

BOSTON-Landlords and public officials are doing what they can to keep urban tenants inside city limits.

By Joe Clements | Updated on May 01, 2008

BOSTON-The battle has been going on for decades, and often with disappointing results, but the city and neighboring Cambridge won a few major rounds, recently, to stop tenants from fleeing to suburban office alternatives. Not only did MetLife just prevent engineering giant Camp Dresser & McKee (CDM) from vacating all 180,000 sf at One Cambridge Place in Cambridge, Mayor Thomas Menino is diligently seeking to keep JP Morgan from moving its custodial funds group out of Boston, even pledging a hefty tax break to accomplish the feat.

A spokesperson confirms to GlobeSt.com that Menino personally contacted JP Morgan officials upon learning that a pending lease expiration at 73 Tremont St. was leading the firm to pursue a possible move to the South Shore. One source says that effort was “way down the road” and the departure seemed inevitable to many industry observers, but Menino’s intervention apparently shifted JP Morgan’s attention to an option in Boston’s Seaport District. GlobeSt.com first reported last month that the firm was negotiating to lease nearly 130,000 sf at the largely empty 451 D St. owned by the Beal Cos. and Rockpoint Group, a rumor that was finally acknowledged this week when Menino’s stimulus package was announced, as reported by GlobeSt.com.

In a widely circulated press release announcing the use of tax increment financing and property tax relief to offset higher rental costs in Boston, the mayor’s office stated that JP Morgan initiated the conversation, but the spokesperson now confirms Menino was the catalyst. “The mayor wanted to get out ahead of it,” explains the spokesperson, but she could not say exactly who was contacted at JP Morgan. Some sources claim the matter extended up to chairman Jamie Dimon, but JP Morgan officials declined comment.

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