The Seaport has become Boston’s Innovation District. Somewhere former mayor Tom Menino is saying ‘I told you so’ – The Boston Globe

We humored him, even as banners proclaiming the rebranding were hoisted above sidewalks. The moniker never did stick, but don’t think for a moment the most innovative companies would have found their way to the South Boston Waterfront on their own. The late mayor’s aspirations have come to fruition, a transformation perhaps capped last week by Amazon’s announcement of a major expansion in the Seaport that would fill a planned tower with 3,000 employees. That’s on top of the 2,000 jobs the e-commerce giant is adding in an adjacent building already under construction.

The move will almost certainly kick up more interest in the area ― innovative companies like to feed off each other’s energy and talent by forming clusters. That’s exciting, but the Seaport as a neighborhood is far from ideal. Let’s hope the attention generated by Amazon’s expansion spurs us to reckon with a major flaw: the Seaport’s lack of diversity and inclusiveness. The city’s newest neighborhood is also among its whitest, as the Globe Spotlight Team reported in a 2017 series on Boston’s racial image and reality.

The real genius behind the origin of the Innovation District wasn’t the coining of an aspirational name, but the strategy behind it. Rather than commissioning a study on whether tech types would flock to the waterfront, the Menino administration took a page from the entrepreneurs they wanted to court: City Hall experimented.

“What we needed was to signal this place was new and different,” said Mitch Weiss, Menino’s former chief of staff.

That led to the fledgling MassChallenge startup competition moving from Kendall Square in 2010 into a rent-free space Menino brokered on Fan Pier. A year later, the mayor proffered a set of controversial tax breaks for Vertex Pharmaceuticals, enticing the biotech to abandon its Cambridge headquarters and break ground on a waterfront campus. In 2013, District Hall opened in a single-story, steel-clad temporary building as a space where the tech crowd could work and hang out.

Back then, the notion that the Seaport might in any way resemble, much less rival, Kendall Square ― biotech hub of the world ― was laughable. Even the most basic question could not be answered: Would young software engineers put up with the long walk to work from the nearest subway stop at South Station?

That’s why MassChallenge and District Hall proved as critical to the Seaport as the decision by Vertex to plant its flag there. They were real-time tests and their success would make more of a statement than the city trying to woo major corporate names through PowerPoint slides and expeditions to executives’ offices.

“I honestly believe if we had taken the strategy of ‘let’s go whale hunting,’ the Seaport would have mostly languished as it had for the two decades prior,” said Weiss, now a professor at Harvard Business School.

In retrospect, Menino’s timing ― intentional or not ― was impeccable. Developer Joe Fallon had just built an office tower on Fan Pier that was proving hard to fill because of the Great Recession. Across the river in Cambridge, the founders of MassChallenge were on the hunt for more space, and Vertex was on the verge of becoming a pharmaceutical powerhouse by bringing its first blockbuster drug to market.

Menino seized on the notion that this new neighborhood couldn’t simply be an extension of the city’s existing economy, which was anchored by financial services firms, insurance companies, and health care institutions. There wouldn’t be enough growth in those sectors to fill the Seaport’s 1,000 acres. Instead, he looked to emerging players such as life sciences companies and tech startups.

Vertex was outgrowing the nearly dozen buildings it was leasing in East Cambridge. Moving to Boston would enable the company to put about 1,200 employees in a pair of gleaming new towers overlooking Boston Harbor, signaling to the world that the firm had arrived.

Not only did Menino offer tax breaks from the city, but he convinced the state to pony up as well. All told, Vertex stood to receive nearly $22 million in incentives to relocate from one Massachusetts city to another, a lucrative package that did not go down well in some quarters.

“I struggled with that,” said Greg Bialecki who was the state’s economic secretary at the time under Governor Deval Patrick. “That’s generally not good state policy. There were a handful of exceptions, and this is one.”

Despite billions of federal dollars to clean up the harbor, depress the Central Artery, and build a third harbor tunnel to connect the Seaport to Logan Airport, the South Boston Waterfront was failing to deliver on its promise of becoming the city’s next great neighborhood. The Patrick administration decided to get involved, figuring what was good for Boston ultimately would, in time, be good for the state.

Patrick also believed government should help grow the rising stars of business. The Vertex deal came just as the governor’s $1 billion, 10-year commitment to turbocharge the state’s life sciences industry was underway.

Cambridge officials squawked, saying the Vertex move would cost them property tax revenue (not to mention jobs). But once Vertex left, other biotech firms quickly took over its space.

“It wasn’t splitting the pie,” said Bialecki. “It was really growing the pie.”

Menino’s timing was good for another reason: Innovation-driven sectors were about to experience an explosion of growth, and Boston ― with its academic medical centers and research universities churning out talent ― was primed to capitalize.

Boston is what the Brookings Institution calls a “superstar” in tech-fueled industries such as software and pharmaceuticals. The metro region is one of five in the country, along with San Francisco and Seattle, that together captured about 90 percent of the nation’s innovation economy jobs in the last decade, according to a Brookings analysis.

“Mayor Menino and Boston were ahead of the curve in intuitively creating new urban space just as the Internet, social media, and e-commerce wave was about to crest,” said Mark Muro, a senior fellow at Brookings. “They hit this just right by creating usable, developable, but very urban space at a time when big tech was concentrating in a short list of places.”

Rohit Prasad, Amazon’s chief scientist for Alexa, has been working in the Boston area for more than 20 years. He said the region’s focus on applied, practical research — innovation, in other words — is a big reason that the tech giant has expanded so much, first in Kendall Square and now in the Seaport.

“It’s not just the tech talent, it’s the culture of the place,” he said. “The desire to take on challenges that impact millions and millions of lives.”

Menino may have been the driving force behind making the Seaport a tech and life sciences magnet, but he needed developers to step up — and they did in a big way. In the summer of 2010, MassChallenge moved into a mostly empty building at Fallon’s One Marina Park Drive, bringing with it 100-plus startups and more than 250 people brimming with cutting-edge ideas.

MassChallenge stayed for four rent-free years, and by the time it moved on, there was a waiting list for Fallon’s tower.

“I am sure a lot of the migration to the Seaport was inevitable, but it definitely didn’t feel that way when we arrived in the Seaport,” MassChallenge cofounder John Harthorne told me in an e-mail. “MassChallenge acted as an important catalyst for the Seaport, and we definitely benefited from its growth as well. We really grew up together in many ways.”

District Hall was made possible when John Hynes, original developer of the mixed-use Seaport Square project, agreed to Menino’s request to build something for the tech scene and lease it for only a $1 a year. The mayor brought in the Cambridge Innovation Center to manage the space and oversee programming. District Hall opened in 2013, and in the last year before the pandemic, it hosted more than 1,700 events with 105,000 attendees.

CIC has since brought the concept to Providence, St. Louis, and Warsaw, Poland. Other cities around the world have studied District Hall.

“There was a fire about to happen down there anyway,” said CIC president Brian Dacey but District Hall was “the spark.”

In 2014, Mayor Marty Walsh picked up where Menino left off, and made sure MassChallenge and District Hall remained fixtures. The Seaport Square’s current developer, WS Development, plans to keep District Hall in place for at least another decade. MassChallenge moved to another part of the Seaport, the Marine Industrial Park, in yet another rent-free deal.

The list of prominent companies, both established and up-and-comers that are expanding or have relocated to the Seaport, is ever growing: Alexion Pharmaceuticals, General Electric, Foundation Medicine, LogMeIn, MassMutual, and PTC.

The name “Innovation District” has been relegated to a footnote in the city’s history, but the changes it helped inspire are all about the future.

Tim Logan of the Globe staff contributed to this report.

Shirley Leung is a Business columnist. She can be reached at [email protected].