@LARGE
The space race

By Scott Kirsner
Globe contributor, 2/7/2000

Steve Barlow is bounding around the future headquarters of ThingWorld.com like a teenager who has just been handed the keys to a new car.

"I love the exposed duct work," he exclaims, rushing a few steps ahead of Eric Gould, the architect. Standing on the second floor of the unfinished office, he leans over a railing and hollers to an imaginary visitor in the downstairs reception area: "Come on up!"

Barlow is psyched - and for two good reasons.

First, the chairman, cofounder, and chief technology officer of ThingWorld, a company that makes multimedia software for the Web, is building a workers' paradise for the Internet era.

When the new office is completed later this month, ThingWorld employees will have their own cafeteria, a Frisbee field, DVD players connected to TVs with surround sound, soaring ceilings and hanging staircases, and comfy couches for lounging around.

Recruiting and retention - the two crucial Rs for fast-moving Net companies - will drop down several notches on Barlow's list of worries.

Second, Barlow is excited because ThingWorld's new space is part of Arsenal on the Charles in Watertown, which, in a matter of months, will almost certainly be the hottest place for a young, leading-edge tech company to be based, inside of Route 128 or out.

Office space - not server space - is chief among the concerns of Boston's Internet CEOs, whose companies are growing at rates that often surpass 100 percent a month.

An address in Kendall Square in Cambridge carries plenty of prestige, but the commercial vacancy rate in the People's Republic is 0.8 percent, says Realtor Joe Flaherty of Meredith & Grew.

"There's essentially absolutely no space available in Kendall Square," he says.

And if you're trying to build a corporate culture that mimics the one in MTV's "The Real World," where coders and content developers pull all-nighters and the business development staff drops by on weekends to shoot pool and return voice mails, you need something funkier than the drop-ceilinged, cubicle-crammed Dilbert-dom of Kendall Square. You need something like the new Arsenal development, a 37-acre site that sits midway between Watertown Square and the Arsenal Mall.

The gargantuan brick buildings have exposed beams, arched entryways, and windows you could fly a chopper through. Fledgling Internet companies seem to like the historic atmosphere and the solid feel; if the Army lasted here for almost 200 years, maybe they can, too.

One executive at a local Internet firm who has looked at space in the complex mused about rowing to work on the Charles and tying up at the Watertown Yacht Club.

At the nearby Arsenal Mall, there's an Old Navy - official clothier to the twenty-something dot-commies - and O'Neill Properties Group, the project's developer, is bringing in a Naked Fish restaurant, a muffin-and-coffee joint, a brew pub, a dry cleaner, and a locker room for lunch-time joggers and bladers.

The last time the Arsenal complex showed up in the Globe, in December, the consulting firm Arthur D. Little had impulsively decided that it didn't want to occupy 365,000 square feet (out of 720,000 total in the project) that it had leased.

But the vacuum created by ADL is being filled by smaller, scrappier tech firms - most of which are growing like magic beanstalks as ADL remains earthbound. One current tenant, HighWired.com, has 54 employees and is working to fill 70 new positions, ASAP.

A Realtor at Trammel Crow, Bob Richards, says that in the two months since ADL pulled out, he has collected signed letters of intent, accounting for 250,000 square feet of ADL's space, all from tech-oriented companies.

Steve Corridan, a partner with O'Neill Properties, says several other tech firms will be moving into other parts of the Arsenal, though he won't name names, since leases aren't yet signed. "We've got a new tag line," Corridan crows. "`Cool buildings for a wired world.'"

In addition to ThingWorld, which will likely go public this year, those tenants will join:

HighWired.com, a start-up that provides the tools for high schools to develop and maintain their own Web sites.

TVisions,a Web development firm that ranks among the top fifty in the United States.

Harvard Business School Publishing, which, though not a dot-com in its own right, has published many of the bibles of Generation IPO, such as "Net Worth" and "Unleashing the Killer App."

Though TVisions won't move into its new digs at the Arsenal until April, co-founder and president Ralph Folz has already been holding open houses for potential employees at the Commander's Mansion on the site, and his radio ads mention the new location as a selling point.

Folz, like Corridan and Barlow, realizes that cool buildings lure talented people. He gushes about the "campus-like setting," the floor-to-ceiling windows, and the game room and library he's installing at the new TVision offices. He also can't wait to start a softball tournament with all the other tech firms at the Arsenal.

"The average employee in our industry is motivated by challenging work, culture, and work environment," Folz says. "Those three things count for a lot - maybe even more than money. That's why we're making such an investment."

He'll spend more than a million dollars to build out TVisions's new home.

The first wave of tech companies at the Arsenal almost certainly will attract others; call it the "birds of a feather" phenomenon. And the Arsenal's success could spill over into other parts of Watertown, where storage warehouses are already being transformed into office space.

Watertown is unlikely to dethrone Cambridge anytime soon as greater Boston's center of technology innovation, but it does have its advantages. HighWired's co-founder, Mark Johnston, offers up this marketing slogan, free of charge: "Like Cambridge. With Parking."

Scott Kirsner is a Boston writer and a contributing editor at Wired, Fast Company, and Boston Magazine.