GB 320 Assignment #1: Secondary Research
Bentley University

How Today’s Suburban Main Street Can Remain Relevant,
A Case Study in Lexington, Massachusetts

Group 6: Mohamed Al Khouri, Tomas Allen, Bridget Gioia, Jeffrey Quigley, Kenneth Ukaigwe, Paul Wolfenden

Section 1 “Company and Product” Description The town of Lexington, Massachusetts is cemented in the minds of many Americans due to its profound historical significance. On this site, the first shots of the Revolutionary War were fired, beginning the campaign for independence. On the morning of April 19, 1775, seventy-seven minutemen fought their first skirmish against the British (Tour Lexington, 2013). Today, Lexington continues to honor its place in American history with numerous statues, monuments and historical sites (Tour Lexington, 2013). Lexington’s historical significance provides an opportunity to capture tourism from both domestic and international visitors. Lexington is a mid-sized town of just over 32,000 people situated within the Greater Boston Area in Massachusetts (DemographicsNow, 2012). With families occupying 90% of all households within the town and a highly-ranked school system, Lexington attracts wealthy professional residents (Berg, Biedron, Bueller, Horst, 2011). Like many American towns, Lexington contains a central business district (CBD), a central area of the town where the majority of commerce takes place. Lexington’s CBD is the stretch of Massachusetts Avenue bordered by Clarke and Meriam Street and Winthrop and Woburn Street, as well as all adjacent side streets (Lexington - Area A Summary - Central Business District, 2010). In the last one hundred years, the CBD has changed to accommodate new building, societal and shopping trends, whilst still maintaining a visage of historical authenticity. Even with the restructuring and renovation over the years, there are still many buildings, particularly on the south side of Massachusetts Avenue that are considered to be notably historic (Lexington - Area A Summary - Central Business District, 2010). Visitors to the CBD can indulge themselves in a wide range of activities, such as seeing a movie at the Lexington Venue, indulging in frozen yogurt at Orange Leaf, or shopping at Michelson Shoes. There are also several noteworthy public buildings such as the Post Office, Memorial Hall and the Memorial Library located downtown (Lexington - Area A Summary - Central Business District, 2010). Despite many strong suits of the CBD, the town is currently confronted with the issue of seeking ways to increase exposure and revenue of the CBD while still maintaining the town’s historical appeal. As of 2010, 23% of the CBD is occupied with real estate and banking establishments, while there is only one entertainment institution. In addition, Lexington’s CBD faces challenges such as parking restrictions, the apparent inability to build high structures, and requisite approval from the historical committee for exterior renovations in order to maintain its historical atmosphere. This analysis seeks to examine local and national data and trends in order to determine how Lexington’s CBD can remain relevant in today’s economic climate.
Section 2 Opportunity Analysis An opportunity analysis is the process of assessing the potential for enhancements and improvements in order to increase revenue and minimize costs (What Is Opportunity Analysis? 2013). The purpose of the opportunity analysis related to a CBD is to find a strategy based on the trends of other successful CBDs in the country that will bring additional benefits to the businesses in this particular CBD. When analyzing the opportunities that a CBD may have, it is important to take trends into consideration. Trends are the direction in which a market is currently moving. Trends can be useful for identifying the opportunities to cater directly to the desired customer base. These trends can also be used to remain competitive within the region while still maintaining growth. Trends can also be useful for determining the CBDs location within the product lifecycle, it is possible to us this knowledge to focus developmental and promotional strategies. In order to analyze the CBD of Lexington, MA, the demographic trends must be examined in addition to the trends of economic, natural, political, educational and cultural environments in the United States.
2.1 Significant Trends in Suburbs and the CBDs of Suburban Downtowns in the U.S.
History of U.S. Suburbs and CBDs The modern suburb did not begin to develop until after World War II when soldiers returned from the war and began to settle down and start families. William Levitt introduced inexpensive housing developments, enabling a large number of these families to settle in suburbs. This population growth in new regions created a demand for local commerce, leading to the creation of CBDs in many of the growing suburbs (Kimmel, 2010). Suburbs were primarily located outside of major cities where many suburban residents commuted each day for work. This created a need for more stable infrastructure. The demand was answered by the US Highway System, which made traveling greater distances easier than ever before, enabling suburbs to develop even greater distances from central cities (Leopold, 2000). Lexington was incorporated as a town in 1713. It was an agricultural center that provided much of Boston with produce. The Lexington and West Cambridge Railroad began service in 1846, which accounted for the majority of the transportation to and from Boston. Once transportation improved, more and more people began to move into Lexington and other suburbs across the country.
Current state of U.S. Suburbs and CBDs (and Lexington)
Demographic Forces According to “The Successful Few,” there are certain demographic trends that allow for a more prosperous CBD. These include “small, predominantly childless households” (Filion, Hoemig, Bunting, Sands, 2004). The share of married families in suburbs is declining and by 2008, “non-families became the most prominent suburban household type” (Brookings Metropolitan Policy Program, 2010). These households frequently reside as close to the CBDs as possible utilizing mixed-use housing that supports many successful CBDs. The occupations of people who reside in successful CBDs are those of the creative class; these include professionals, product developers, entrepreneurs, artists, and other manager positions that use innovation and technology to progress our society (Filion et al., 2004). Lexington’s demographic forces have a large impact on the activity in the CBD. Lexington is located approximately fourteen miles or a thirty minute drive outside of Boston. It is neighbored by Arlington, Bedford, Belmont, Burlington, Concord, Lincoln, Waltham, Weston, Winchester, and Woburn. The majority of its residents are Caucasian, though the population is 20% Asian, and the median age is 47 years old (City Data, 2012). Nearly half of these residents have a graduate or professional degree and the most common occupations are computer specialists, top executives, and engineers (City Data, 2012). This data leads to the conclusion that most residents in Lexington are wealthy business professionals who work in or around Boston and have moved into this suburb to start a family. It is important for the businesses of Lexington’s CBD to understand this information and realize what types of establishment the typical resident needs and wants. For example, a business professional would prefer a dry-cleaning service compared to a laundry mat to best serve his needs. He might also choose Starbucks over Dunkin Donuts or Panera Bread over McDonalds.
Economic Environment In recent years, US suburbs have shown a slight decline in population. This decrease is likely due to the long period of recession the nation is currently experiencing. Suburban life can cost nearly 18% more than living in the city (Bernard, 2010). As a result, suburban populations are trending towards the creative class with higher average salaries who can afford to spend more money in the CBDs. Due to the educational background of Lexington’s residents, the median income is $132,921, which is more than double the state average. The unemployment rate is only 5.1%, which is lower than both the state and federal rates. More than 75% of workers in Lexington drive a car to work, likely because the public transportation in Lexington is limited to the MBTA Bus, which can take longer than driving (City Data, 2012). Because the majority of Lexington residents live comfortably off their incomes, their purchases and spending patterns directly affect the CBD. It is therefore important to have business establishments that are relevant to these residents.
Natural Environment Two of the most important factors in a successful downtown in the United States are a strong historical character and powerful tourist appeal (Filion et al., 2004). If suburbs have historical monuments, sites, or landmarks, people are more likely to travel there and participate in the downtown activities and businesses. It is also found that those downtowns that do not alter the original structure of their buildings are found to be more successful (Filion et al., 2004). The historical quality of the buildings creates a distinctiveness that many people find aesthetically pleasing. Lexington is known as the “birthplace of American liberty” due to its historical remembrance as the location of the start of the Revolutionary War (Tour Lexington, 2013). Visitors can tour the Battle Green, the Minutemen Statue, the National Heritage Museum, the Minute Man National Historical Park, as well as various other historical houses and monuments regarding the Revolutionary War. The Lexington Historical Society guides the events and attractions in the town (Lexington Historical Society, 2013). For this reason, Lexington can be viewed as a tourist town that must attempt to satisfy the needs of its tourists as well as its residents. Because Lexington is a historical destination, it aims to preserve its Colonial influences throughout its CBD.
Political Environment The development and evolution of CBDs and suburbs often depend on various political entities within the community. These entities can include a Chamber of Commerce, the town’s governing body, private organizations, a historical society and active citizens. These participants are required for a stable and thriving CBD. Successful CBDs typically have municipality participation in improvements to features such as public buildings, parking lots, and restoration projects (Filion et al., 2004). Lexington has a number of organizations that serve as political actors in the town. The Historical Commission was created for “the preservation, protection, and development of the historical or archeological resources of the town” (Lexington, Massachusetts, 2013). The Historical Commission approves all external business changes within Lexington. There is also a Chamber of Commerce that aims to improve businesses in the town by making Lexington a desirable place to live, work and shop. Although they have different focuses, both of these organizations intend to make Lexington a more appealing town. Lexington is governed by a Board of Selectmen and a Town Manager who is appointed by the board. The town’s legislative function is done in the form a town meeting of representatives. This system gives citizens a voice in the government of their town.
Educational Environment One of the qualities commonly found in successful downtowns is the presence of a university within two miles of the town. A survey conducted showed that more than 60% of respondents considered educational establishments an important factor in the success of downtowns (Filion et al., 2004). It stands to reason that as income levels typically rise with education levels, a town with a higher education level is in a better financial position to support its CBD than others. Lexington has a very strong public school system, making it an appealing town to many people with children. The town has six elementary schools, two middle schools, a high school, and a regional vocational high school. There are also six private schools in the town. Decisions made regarding the public school system are made by a five-member School Committee that is elected by the town’s citizens. This committee is responsible for addressing issues and concerns within the school system and appointing the superintendent of schools (Lexington, MA, 2013). Lexington High School has a very high graduation rate; in 2012, 97.6% of all students graduated (Lexington-School and District Profiles, 2013). The student to teacher ratio is below the state average. A Boston Magazine ranking of Massachusetts schools in 2011 ranked Lexington number five in the state in both classroom performance and test scores (Berg et al., 2011). These statistics make Lexington a very appealing town for any family looking for a highly ranked public school system for their children.
Cultural Environment Successful CBDs often have similar cultural environments that provide residents with opportunities for both retail and leisurely activities. The successful CBD focuses on boutiques, shops, and family owned bars and restaurants rather than big box retailers and major chains. All successful downtowns examined in “The Successful Few” contain the presence of “continuous street-oriented retail facades.” (Filion et al., 2004) Retail is further encouraged when the shops are hospitable and occupied by other shoppers. The creative class is considered to be the leading force of growth in the United States economy. Richard Florida defined the creative class based on the occupations of people: “creative class includes scientists and engineers, university professors, poets and novelists, artists…designers and architects…think tank researchers, analysts and other opinion makers.” (Florida, 2012) The creative class also includes other educated professionals in fields such as finance, legal, health care, and high-tech. Members of the creative class are working to design consumer products, software, and solve societal problems. Their work is driving the evolution of American culture. Fields associated with the creative class continue to grow and flourish even in hard economic times, while industries like agriculture and the working class are shrinking (Florida, 2012). The high salaries and affluent lifestyle commanded by Lexington residents give the town an upper-class atmosphere. Citizens have more disposable income to spend within the town and its business district. There is also very low crime rate within the town; there is likely a relationship between the high wealth and low crime rate (City Data, 2012). Since residents can afford to purchase houses or condos, there is a low rental percentage. This statistic is also due to the school system that allows for living in Lexington for an extended period of time appealing to its citizens. In the past few years, the Asian population has started to grow dramatically in the town. In 2000, the Asian population was 10.9 % according to the US census, but the 2009 reports show it has grown to over 20%. This growth in the Asian population has begun a cultural shift within the town. The Police department has hired a police officer that speaks Mandarin and has subscribed to a translation service in order to accommodate citizens that do not speak English, or do not speak it fluently. The town’s public library has also begun to offer a selection of Mandarin books and videos. Local businesses should take this cultural change into consideration when making critical business decisions such as offering information in other languages. The town has also established a Demographic Change Task Force in order to help the town adapt to the changes occurring within the town such as the growing Asian population and changes in the median age ("Report of the Demographic Change Task Force," 2010).
Future of U.S. Suburbs and CBDs (and Lexington) The trend of city growth outpacing the growth of suburbs may not last into the future. It is likely that as the economy recovers and the younger generation moves on to more stable, higher paying jobs there will be a higher demand for housing in the suburbs. Another potential issue suburbs may face in the future is a lack of nearby attractions for citizens. Cities offer a high-volume of attractions such as restaurants, bars, shops and entertainment in a relatively small area. Suburbs on the other hand tend to be more spread out. To compete with the appeal of cities, suburbs must invest in ensuring their CBD is a desirable destination for both younger and older citizens. Regardless of the negative trends that suburbs may currently face, they will never vanish completely. Population numbers may go down, but certain people will always desire a home away from the dense hustle and bustle of city life. There will always be demand for suburban housing and as such, there will always be a need for a CBD within these suburbs. The future of Lexington appears promising. As rents continue to rise in Boston, living in suburbs with active and successful CBDs may be an attractive option for young families. As long as Lexington offers the right businesses, it will continue to attract both residents and tourists into its CBD.
Product Life Cycle The product life cycle includes four stages: introduction, growth, maturity, and decline. The introduction of the suburb and the CBD began in the late 1800s and early 1900s when the population of cities was rising and transportation technology improved. In the introduction stage, the product, CBD, is not popular and there is minimal profit among the businesses, if any. The growth stage of the suburbs started after World War II with the introduction of “Levittowns” in which housing complexes were mass-constructed along with malls and schools to accompany them (The Impact of the Automobile on the 20th Century, 2013). Today, CBDs are in the maturity stage. Suburbs have been established as safe, healthy, and clean alternatives to cities, so it isn’t likely that people with families and wealth will choose to leave for a cramped, dirty, crime-filled city any time soon. As long as suburbs continue to exist, CBDs will be present as well. It is up to the individual towns to provide businesses within the downtown that satisfy its residents’ needs.
Section 3 Competitive Analysis A competitive analysis is performed to compare relevant competitors’ marketing and sales tactics. In order to maintain the most relevant and accurate comparisons between our chosen towns and CBDs, demographic and economic data was gathered from DemographicsNow using two methods. First, data was gathered for the town as a whole, in order to get a sense of the population and region that supports the CBD. Then, custom maps were created to match the boundaries for each town’s CBD, not according to an arbitrary radius but according to their local zoning. The actual streets creating each of the boundaries from which the data was pulled are illustrated in Appendix 3.5.
3.1 Competitive Boston Area Suburbs and Suburban Downtown CBDs Competitive analysis of other CBDs in the suburban Boston area yielded some interesting insights into Lexington Center’s potential. In many ways, Lexington Center appears to have the best aspects of the comparable towns and only a few unique drawbacks. Arguably the most significant asset to the Lexington CBD is the town that surrounds it. Among the largest three populations studied, it is also one of the top three most affluent according to median household income, per capita income and median home value (Table 3.2). This would seem to put a well-planned Lexington Center on the right path, even before factoring in the 250,000 visitors who add to its revenues each year. In contrast, towns like Salem and Concord who have roughly the same amount of tourism are extremely reliant on the revenue generated, as their populations are either not as large or as wealthy as Lexington. These limitations potentially prevent the local population of each town from supporting its CBD independently. One of the most interesting things to be found in the analysis is that many of the challenges Lexington Center faces are not only common to all CBDs, but Lexington is actually performing at a higher level than many of their peers. For example, while parking appears to be an issue in Lexington Center, it actually has more available than the most similar CBDs (Table 3.1). Similarly, the amount of hotel accommodations in Lexington may encourage visitors to Lexington Center. The only town with a higher number of rooms per capita is Waltham, which relies on its less expensive hotel accommodations as a main draw. Furthermore, the data shows that Lexington has more hotel rooms than both Salem and Concord, who host roughly the same amount of visitors annually. Two of the unique challenges facing Lexington Center’s potential to lure businesses lie in its building restrictions and the town’s tax rates. Lexington Center, like all CBDs studied, has strict limits on the exterior of buildings in order to maintain its historic aesthetics. However, in addition to these common restrictions, Lexington has the strictest regulations governing the height of buildings of any CBD studied. Tax rates are similarly restrictive, among the highest of Boston area suburbs. The residential property tax rate is second among compared towns and the commercial property tax rate is in the top four and roughly 30% above the average. The business makeup of Lexington Center is relatively close to the composition of compared CBDs with a few exceptions. The CBD has a higher than average percent of financial, legal and real estate establishments. Conversely, Lexington center has a relatively small percentage of apparel retailers and no museums or art galleries. There was also found to be a lack of bars or nightlife options. This may be due to the relatively high median age of the town residents and Lexington having the largest married population amongst those towns compared.
Perceptual Map The perceptual map designed seeks to allocate each town according to the types of establishments they are currently focused on (Appendix 3.6). Placement along the horizontal axis is determined by whether the CBD is intended to support the local residents or driven by the one-time visitors brought on by a tourist economy. The vertical axis represents the economic class each CBD is perceived as catering to. Lexington center and other CBDs should consider their current place in the map as well as their desired position when choosing what types of business they allow and encourage in the future.
Section 4 SWOT Analysis A comprehensive SWOT analysis of the Lexington CBD shows that it may be in a rather precarious position. The area has many unique strengths and opportunities; however, current economic and social trends, combined with regulatory constraints may make improvement and expansion of the CBD a difficult prospect. Lexington and neighboring towns offer accommodation options that are plentiful compared to their peers. Proximity to major highways makes the CBD highly accessible by various means of transportation. In addition, Lexington’s historical significance gives it a differentiating factor from other nearby towns to cater to both tourists and its affluent community. Lexington is also in an excellent position to build on its strengths. With Hanscom Air Force Base four miles away, the town has the option to integrate the current military community into its historic military tradition. Considering the respect Americans have for the military, integrating the air base could be an excellent way to draw more visitors to Lexington (Bowman, Rugg, 2011). However, Lexington still faces both external and internal challenges. One obstacle might be the historical regulations that prohibit certain changes from occurring in the CBD. Lexington also lacks a social hub in the center of town, with only the movie theater for entertainment purposes. Further problems include limited parking and higher than average tax rates, which may have a negative impact on businesses in the CBD. The impact of the current recession also weighs heavily on Lexington’s prospects. At the height of the crisis, small business optimism was at “near historic lows,” with employers contracting their businesses and laying off employees (McKee, 2010). Tourist interest in historic sites has been decreasing towards the end of 2012, with visits to museums and attractions down 7.4% from the previous year (D’Agostino, 2012). More consumers are shopping online, with an expected 45% growth in sales done via the internet over the next five years (Picarille, 2012). The Lexington CBD also competes with the nearby Burlington mall, which offers many of the same amenities as businesses in the CBD. With its ample parking and national chains, the Burlington mall is an attractive alternative for consumers wishing to spend a day out. On one hand the strong sense of tradition, prime geographic location and wealthy citizenship provide Lexington with a great competitive advantage. On the other hand, negative national trends impacting the CBD’s businesses, stiff competition from the nearby mall, the need to maintain tradition and high tax rates are potentially hindering Lexington’s development. By applying this analysis to future research, Lexington will be able to focus on its strengths and opportunities and minimize its weaknesses and threats.

Internal Strengths
· Accommodation alternatives
· Major historical background
· Affluent population | Internal Weaknesses
· Town council regulations about development
· Limited Entertainment/ social establishments (e.g. pub, bar)
· Overrepresentation of some industries in CBD
· High commercial and residential property tax rate | External Opportunities
· Hanscom airfield and American military sentiment
· Potential in resident and tourist consumer base
· Massachusetts Downtown Initiative | External Threats
· Impact of recession on small businesses
· Burlington Mall
· Growth of online shopping
· Declining tourism in Mass
· Continued economic uncertainty |

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