Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SOMERVILLE, MA-After months of wrangling, this city has finally reached an agreement to develop an IKEA home furnishing store in Assembly Square. As part of the agreement, the Swedish company will develop a mixed-use project on the site and will provide the city with a community benefits package.

According to Sean Fitzgerald, spokesperson for city Mayor Dorothy Kelly Gay, the sticking point was the language of the agreement, specifically with regards to out clauses and commitments. “The mayor wanted to make sure that the final document had the requisite enforceability clause so that the city could be sure that IKEA would do what was pledged,” Fitzgerald tells GlobeSt.com. Fitzgerald acknowledges that for IKEA the concept of committing to a mixed-use proposal in a tightening economy is difficult but he says the mayor “wasn’t going to jeopardize the long term stability and sanctity of the agreement. They were trying to put language in there that says, if the economy is good we’ll do it. The city needed a reasonable assurance that what they agreed to build would be built.”

What IKEA has agreed to build is a 250,000-sf store which includes a footprint of 160,000 sf and a 90,000-sf mezzanine. In addition, the company will develop 225,000 sf of office, retail and restaurant space on its site and provide the city with a $2.5 million community benefits package. This includes $1.9 million in infrastructure improvements to the city; $350,000 to landscape and construct a new park; $100,000 for an MBTA feasibility study; $100,000 for a new walkway; and $75,000 for public arts.

The IKEA store will become the city’s largest taxpayer, generating over $1.6 million in annual tax revenues. The proposed office space will generate an additional $700,000 in annual tax revenues. IKEA also has agreed to site improvements worth an estimated $25.7 million.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper


GlobeSt. NET LEASE Fall 2021Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.