The Cannabis Control Commission To Headquarter in Worcester Soon.
Will Other State Agencies Follow?

William D. Kelleher, IV – Principal
September 2019

The Cannabis Control Commission (CCC) will be relocating its permanent offices to Worcester from downtown Boston this coming December. The CCC signed a 10-year lease for a 14,381-square-foot office at Worcester’s Union Station and 4,523-square-foot satellite office at 50 Franklin Street in Boston’s Downtown Crossing.

The new Worcester headquarters will include 25 offices, 53 work stations and three conference rooms, one of which will be large enough to accommodate the commission’s public meetings. Additionally, CCC will receive 15 parking spots in the garage attached to Union Station, and its office will be accessible by commuter rail.

Cannabis Control Commission officials have touted both the central location of the agency’s planned Worcester headquarters and its accessibility to public transportation. The agency is hoping that basing itself in Worcester will make it accessible to people all around the state. The CCC also expects the new location will be a more convenient base of operations for its inspectors who regularly travel to various marijuana businesses.

Cost was certainly another factor in CCC’s decision to relocate. Just compare the cost of CCC’s Boston satellite office at roughly $54 per square foot versus its soon-to-be Worcester headquarters at $32.74 per square foot. That’s a significant savings for Massachusetts tax payers!

Could Other Massachusetts State Offices Be Willing To Relocate Their Headquarters From Boston To Worcester?

The Boston skyline is dotted with construction cranes trying to keep pace with the growing demand of new businesses choosing to locate in its business district. Depending on the survey, Class A office space in Boston ranges between $58 and $62 per square foot. This average rental price makes Boston one of only four markets in the country with an asking rate of more than $50 per square foot, joining Manhattan, San Francisco and Washington, DC.

While many of Boston’s private sector companies working in TAMI (technology, advertising, media and information) and FIRE (financial services, insurance and real estate) may be able to absorb these rental rates, that expense certainly stretches the limits of government agencies.

According to a Worcester Research Report conducted in 2018, the Commonwealth of Massachusetts pays an average of $37 per square foot across its Boston lease agreements, with a high of $73 per square foot near Boston City Hall and a low of $19 per square foot in Hyde Park. Downtown Worcester, on the other hand, has an average of $23.08 across eight Class A buildings with 275,000 square feet of available space, according to a recent report compiled by the Worcester Regional Chamber of Commerce.

As important as cost is to making real estate decisions, not every Massachusetts state office is suitable to move from Boston. Some state offices need to interact with Beacon Hill or other agencies so frequently that separating them from the Boston area would be counterproductive. Other state offices need to stay because they are “programmatically linked” to the Boston community.

But once you cull the state offices that absolutely need to be in Boston from those that could consider a move, you find several opportunities for Worcester to land another major state office headquarters. The Worcester Research Bureau identified several examples, including:

  • The Center for Health Information and Analysis (CHIA), which collects data and issues reports on health care in Massachusetts, rents nearly 25,000 square feet at $54 per square foot for the agency’s approximately 150 full-time employees and contractors.
  • The Division of Insurance, which regulates the insurance industry and deals with legal administration on consumer protection, rents 36,000 square feet at $44 per square foot for its 150 full-time employees.
  • The Department of Telecommunications and Cable, which regulates those industries and educates consumers, rents 10,000 square feet at $47 per square foot for its 25 employees.
  • The Board of Library Commissioners, which has the authority to “organize, develop, coordinate and improve library services throughout the Commonwealth”, rents nearly 7,000 square feet at a cost of $39 per square foot for its 25 employees.

Would these state agencies and others consider moving from high-priced Boston to value-priced Worcester? Besides offering significant tax savings for Massachusetts tax payers, these state officials might consider the quality of life afforded their employees. Boston commute times via car and public transit are among the longest in the country. Factor in parking costs, tolls and gas and it’s no wonder that a recent MassINC poll shows that more than one-fifth of full-time workers living within Route 128 have considered moving away from the Boston area because of their long and expensive commutes to work.

Imagine these burdensome commutes being replaced with a short commute from one of Worcester’s many attractive neighborhoods or nearby towns. Or, imagine an under-an-hour commute from downtown Boston to Worcester on one of the MBTA’s many express trains. Consider how employees of these state agencies could enjoy living in a community where the average rent for an apartment is $1315 and the price of a single-family home is $289,500. That represents a cost of living that’s 22 percent less than the metro-Boston region. Finally, they could also discover a city that has the perfect blend of arts, entertainment and nightlife, including the addition of the new AAA-affiliate of the Boston Red Sox in 2021.

Add it all up and the environment is right for Worcester to build upon the success of the Cannabis Control Commissions relocation from Boston, and attract additional state agencies to do the same. At Kelleher & Sadowsky, we’re ready to help every step of the way in your decision-making.

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Should you have any questions about this article – or any commercial real estate matter – please feel free to contact me at [email protected] or call me at 508-635-6785.

2019-09-26T12:48:20+00:00