Doing business in Boulder has grown increasingly costly in recent years, but a planned city program that might relieve some small startups or longtime local companies from having to relocate could receive more attention this year.
Multiple advisory boards and commissions to City Council, along with the Boulder Chamber, listed progress on a pilot that would provide below-market commercial spaces for business tenants throughout the city as a 2020 priority.
Emphasis has been placed on the need for more affordable housing in Boulder over the past decade. There are plans to continue overhauling the allowed land uses in separate zoning districts this year as a way to signal the city’s desire for more residential and mixed-use buildings, where commercial and housing spaces colocate.
But the same problem with housing prices, which have kept people who work here from living within city limits and caused additional daytime commuting traffic, also exists with entrepreneurs looking to break into, or stay, in the coveted Boulder business environment.
Pete Averson, owner of the Boulder Commercial Real Estate firm, is hopeful the city makes progress on establishing a method to lure more below-market commercial space. He said one of his current clients is a retail tenant who has worked in the city for 35 years, but is leaving space near 33rd Street and Arapahoe Avenue and relocating to Superior to get out from under the more expensive Boulder rent.
After insurance and taxes are passed along to commercial tenants, Averson said annual rents in the area are running up to around $35 per square foot, and it’s about to get more expensive to expand or build new commercial space with city non-residential development fee hikes taking place this year and next year.
“Boulder has always been in a bubble,” Averson said. “If the city can get affordable commercial real estate, it’s a blessing for so many people. If you’re a retail shop, you have to get less space to stay in Boulder, or move out of Boulder to afford your current amount of space. … I sell very few things to local investors. It’s international. Local mom and pop, that’s not going to happen.”
But giving the local small businesses a better chance of staying in Boulder or setting up shop here is being worked on this year. The University Hill Commercial Area Management Commissioners, Downtown Management Commission, Boulder Arts Commission and Boulder Junction Access District Commissions list further exploration of an affordable commercial space program as a priority they hope city officials will take up this year.
It is likely to be considered part of the community benefits program Council approved an initial plan for last year. That plan allows developers to build affordable housing units in order to gain exemptions to certain height limits within some zoning codes.
This year, city staff is set to analyze whether developers could agree to provide perks to the city beyond affordable housing — such as below-market commercial space, subject to caps on the cost of renting or otherwise using the space for business purposes — to gain exemptions to certain development regulations. Other types of trade-offs could also be examined as part of the project.
The advisory commissions emphasized the need for such a program ahead of Council’s retreat this weekend, when the elected leaders will meet Friday and Saturday and set their work plan for 2020.
Some of the below-market commercial space experimentation will take place at the 30Pearl development at the northeast corner of 30th and Pearl Streets, where construction on new affordable housing structures broke ground last month, and where at least 9,300 square feet of ground-floor commercial space being built. Part of the project will be limited to 75% of market rents, and annual rent increases of no more than the rate of inflation as measured by the Consumer Price Index. The affordable commercial space will take up at least half of the commercial space at the site.
That type of cost structure for space would be a lifeline for small businesses, Averson predicted. He said the demand for reduced-cost space will be high, and was curious about how the city will regulate which tenants will get to occupy it. City officials did not respond to requests for comment Tuesday.
Rising rents have especially hurt the creative community, Boulder Arts Commission leaders wrote to Council.
“Achieving more affordable housing and commercial/nonprofit space remains a community-wide priority, particularly for the arts and culture community, which has been impacted by the high cost of living and working in Boulder,” the commission wrote. “The Arts Commission, the Office of Arts & Culture and Boulder’s arts and culture organizations would like to participate in city discussions about affordable housing and studio, maker, workshop, performance, retail and office space for artists and arts organizations that could be developed …”
In a letter to Council the Boulder Chamber noted the affordable commercial space pilot program could also overlap with the planning efforts to signal what kind of redevelopment and transportation opportunities there are in the East Boulder Subcommunity, an area generally encompassing Foothills Parkway to just east of 63rd Street, Boulder Municipal Airport and Arapahoe Avenue to Valmont Road. It is set to be analyzed more deeply by city officials in 2020.
“The East Boulder Subcommunity Plan process is a critical opportunity site for further housing and affordable commercial spaces with excellent alternative transportation connections,” Boulder Chamber CEO John Tayer stated in the letter, while also advocating a harder look at a community benefits program that could include affordable commercial space provisions.
The idea of preserving commercial space costs to be obtainable for local businesses has been tested elsewhere, too. The nonprofit Institute for Local Self-Reliance in 2018 mentioned Boulder’s effort at 30Pearl along with a New York proposal to give tax exemptions to landlords who offer small and independent businesses long-term leases with reasonable rent increases, and Cambrdige, Mass and Jersey City, N.J. policies that restrict “chain” or “formula” businesses.
“All of this new activity suggests that more cities are recognizing how important locally owned, independent businesses are to broader goals, like inclusiveness, prosperity, and sustainability,” the nonprofit stated. “Now, they’re taking steps to create an environment that supports them.”