Conventional wisdom is correct: Locally owned businesses are slipping away in Harvard Square – Cambridge Day

by | Oct 25, 2022 | Opinion | 5 comments
Harvard Square has seen locally owned businesses replaced by chains. Black Ink at 5 Brattle St. (photo from 2018 by Ambia C. via Yelp) is now a Topdrawer (photo from 2021 by Elaine L. via Yelp).
It’s conventional wisdom around Cambridge that Harvard Square is not what it used to be. I have read this claim so many times over the past two decades that I wanted to see if it was true. And so this summer, during my walks to and from work through Harvard Square, I decided to count and categorize its storefronts. Data now in hand (findings here), I am satisfied that conventional wisdom holds up: Harvard Square is chain-ging.
From January 2020 to July 2022, more than 80 retail locations out of 300 in Harvard Square had either turned over to a new business tenant (around 50) or were still vacant in July 2022 (30 of them).

In the case of the roughly 50 locations that had a new tenant in place or lined up, that was more likely to be a large corporate chain than the tenant being replaced. With these locations, large chains increased their market share in Harvard Square to 40 percent from 27 percent, while local businesses decreased in market share to 60 percent from 73 percent.
The data reveals a bright spot that is true of the entire square: Local businesses outnumber large chains in Harvard Square. But they are slowly losing their grip.

When I was an undergraduate at Harvard College in the early 2000s, and even afterward as a young professional, I did not discern between getting coffee at a locally owned Crema Cafe vs. the private-equity-owned chain Bluestone Lane or tea at a locally owned Dado Tea vs. an international chain Gong Cha – to name two of the recent turnovers from local to large corporate tenant. But as a 37-year-old dad, husband and likely longtime resident of Cambridge, the trend toward large corporate chains displacing locally owned businesses gives me pause. It also prompts questions:
Should we welcome more large corporations in Harvard Square? The argument of improved consumer welfare is often made to justify an increasing presence of large corporations in our everyday life: Starbucks coffee is consistent whether you get it from the middle of Harvard Square on JFK Street or two blocks down on Mount Auburn in The Garage. (Note: Both locations are closed, though Starbucks is coming back across the street from its former JFK Street location.) CVS pharmacy allows me a choice of prescription-pickup locations on my walk to work – at the Harvard Square location or closer to my home at its Alewife location.
If we assume these benefits are greater than those a local coffee shop or pharmacy can provide (debatable, of course), the next question is: How far does consumer welfare get us? Our individual and collective welfares require not just consistent quality, low prices and convenience of location, but strong wages for workers, sufficient tax revenues to maintain the roads we use to get there, marketplaces that allow small businesses to compete and strong civic institutions to address political challenges from the economic externalities and imbalances that arise inevitably in our markets and communities. As I understand it, part of the reason local businesses have a three-times multiple on the circulation of a dollar throughout any given community, per Cambridge Local First, is that local businesses benefit not just us as consumers, but the other aspects as well.
Does Harvard Square – and Cambridge more broadly – cultivate an environment in which local businesses can compete? There is a case that large corporations should win out if they compete on a level playing field and deliver better value and service for our community. But if small businesses that provide essential community services and products can no longer afford market-rate retail rent in Harvard Square and pay higher taxes than their private-equity counterparts, what can be done? Could it even be that large corporations lose money in Harvard Square but recognize that investing there builds brand awareness and loyalty among college students moonlighting as social media influencers? If our local markets have become anti-competitive in favor of largeness, our community needs to find creative solutions to address this market failure.
If the findings from my limited data collection give others pause, can the data be corroborated and enhanced by maintaining a larger historical and current retail database for all of Cambridge? I did this limited study because I wanted to know what the data said about Harvard Square and could not find a comprehensive public database. My work consisted of walks around Harvard Square counting and writing, archive searches on local news websites and Google Street View, and conversations with Theodora Skeadas and Pooja Paode at Cambridge Local First. I imagine the city has more rigorous data available internally that might make maintaining a historical retail database more scalable.
City government, Harvard University and the residents of Cambridge have a common interest in maintaining Harvard Square as a unique, charming spot that not only draws college students, young academics and travelers from around the world, but serves the community. The square, and greater Cambridge, cannot be a place that supports local entrepreneurs and provides the goods and services its neighborhoods need if retail space is affordable only by large corporations.
What will Harvard Square look like in 10 more years? Will my family and I be able to walk in and get ice cream at Lizzy’s, or dinner at Clover? My hope is that in 10 years, not only will our local businesses have weathered this rough patch and begun to thrive, but that more will have joined them. I believe this can be the case if we advocate for a Harvard Square where small business entrepreneurs can compete again.
Christopher Cullen works in Harvard University’s central finance department and is a part-time lecturer in the MIT Sloan School of Management’s communications department. He lives near Fresh Pond in Cambridge with his wife and kids.
This article was written in partnership with Cambridge Local First.
Who da thunk that getting rid of “the pit” would be the first step in the “Disney-fication” of
Hah-vuhd Square…..
…..anyone who was paying attention.
Mr. Cullen,
Unless I missed something, you forgot to mention that where Harvard owns the real estate, it effectively “subsidizes”
the rent for a number of stores in Harvard Square
by charging rents that are lower than market rate.
This has been going on for much longer… the intrusion of the chains in Harvard square was going on in the ate 1990s when I moved here, before any of the real estate changes that have happened and the takeover of the “business association” by folks that are chain store friendly over small local businesses.
The failures and departures over the covid period have simply made it easier for them to eat away all the local flavor of the square, and we are seeing the same happening in Central Square as well.
The Cambridge I knew when I moved here is nearly gone.
There are a lot of closures between 2020-2022 and that dataset might not be the best to go off of considering the pandemic, forced closures, and the city of cambridge being more restrictive than most cities in the commonwealth. Second I think the author should speak to the Harvard Square Business Association to get a better lay of the land. Cambridge Local First isn’t really a strong advocate for small businesses and they do not have as much data as the HSBA. Lastly concerned43 is correct Harvard, just like MIT in Central Sq, subsidizes most if not all of their retail stores which kind of overshadows how difficult it can be to maintain a local business under normal market conditions.
Actually I think that the selling out of the Family Trusts in recent years that held about 50% of the retail space was a larger impact than Harvard on recent events in the square.
The purchases by Miami-Based Gazit Horizons (in 2020); Billionaire Hong Kong investor Gerald L. Chan (buying things up since at least 2014 or earlier);Charlotte-based Asana ­Partners North Carolina-based real estate investment company (2017) and many others. Have changed a large part of the ownership of the square.
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