Like many suburbs, Waltham has been affected by the growing tendency of leading companies in the tech and financial industries to relocate in core cities, threatening its longtime status as the epicenter of the Route 128 finance and technology belt. The trend picked up speed in recent years as half a dozen venture capital firms departed for Boston and Cambridge.

At the same time, critics say this city of 61,000, one that was a pioneer in the Industrial Revolution, hasn’t done itself any favors when it comes to maintaining its economic competitiveness. They cite a Byzantine permitting process, an anti-business culture at city hall and the lack of a long-term development strategy.

“Countless business owners have expressed their dissatisfaction with trying to do business with Waltham government,” said Thomas Stanley, a state representative and city councilor who has indicated he’ll run for mayor in 2015. “Waltham is in such a good location that it’s hard to see the impact immediately, but Waltham is losing out.”

In downtown Waltham, where Moody Street generated buzz a decade ago for its lively restaurant row, several well-known eateries closed up shop late last year. Alarmed by the increasingly run-down appearance of the downtown area, city officials approved $1.5 million last summer to rebuild sidewalks and replant trees.

That’s not to say there’s no momentum. Green shoots of development are visible this spring in the form of the 1265 Main St. retail complex being built alongside Route 128, and a 340,000-square-foot apartment and retail complex being built downtown by Newton-based Northland Investment Group. The fundamentals of Waltham’s commercial real estate market – the largest on 128, at more than 10.4 million square feet – appear solid, for the time being.

In the city’s 5.7-million-square-foot, 60-building office market, the average asking rent rose 8 percent to $30.59 per square foot in 2013, according to Cassidy Turley research. The vacancy rate was 8.3 percent at the end of the first quarter, down from 11 percent at year’s end.

But April brought news of another billion-dollar money manager leaving town. Venture capital firm North Bridge Venture Partners confirmed last week that it will leave Waltham for Boston or Cambridge by year’s end, news that was first reported by the Boston Globe’s BetaBoston site.

North Bridge’s departure follows the lead of fellow VC’s Battery Ventures and Polaris Partners, which moved from Waltham to Boston’s Seaport District, and five others that have relocated to Cambridge in recent years.

Venture capital firms aren’t big users of office space, but their importance is magnified by their business relationships with growing tech companies. The two industries tend to locate near one another.

All Work, No Play

With “amenities” being one of the favored buzzwords in suburban development these days, real estate executives say Waltham needs to add more retail centers and restaurants near – or inside – its office parks. They cite the example of Burlington, where Nordblom Co. is building 3rd Ave, a 300,000-square-foot shopping center in its Northwest Park office property.

“Waltham has traditionally been the most active first-class (suburban) market,” said Eric Sheffels, a partner at Leggat McCall Properties. “In some cases, Burlington has begun to transcend it. Waltham is really suffering from a lack of amenities, which makes it less attractive than the more vibrant market in Burlington.”

In Waltham, the most visible activity is the construction of 1265 Main St., a 160,000-square-foot shopping center at the former Polaroid factory property alongside Route 128. The developer, 1265 Main St. LLC, is also considering building a 120,000-square-foot office building on speculation, attorney Carmine Tomas said.

“There’s been a lot of demand for that space, and we’re in the process of finalizing our strategy on the office building, but we certainly are considering building on spec,” Tomas said.

The 119-acre parcel has potential for a much larger commercial development, which would be subject to MEPA review. It’s unlikely to be developed further without direct access to Route 128, Tomas said.

Waltham Mayor Jeannette McCarthy said she has taken an active role in preparing for the second phase of the Polaroid development, setting up meetings that she attended between the developers and state transportation and economic development officials.

Slow-Lane Permitting

Fast-track permitting – a development tool touted by state officials – hasn’t gained a foothold in Waltham.

Virtually all developments need approval from the 15-member city council, which reviews everything from corporate headquarters to small condo projects. Half-billion-dollar projects share space on agendas with used car dealer licenses.

“The city’s council time would be better spent looking at major land-use policy aspects of these proposals,” said Richard Dacey, a Waltham attorney who represents developers before the council. “Their time is less well spent when they are forced, typically by a lack of staffing, to deal with the details of pipe sizes, parking spaces and tree counts.”

It’s not unusual for hearings on major projects to drag on for years.

“It gets stuck at the city council and none of these people are experts,” said a local developer, who asked not to be named because he does business needing the council’s approval. “They get into petty arguments and get off track.”

Stanley, the city councilor and state representative, said the city should designate a point person for developers.

“There’s no predictability or transparency within the government,” he said. “Businesses don’t know what to expect from the city when they’re going to get approval. The system is archaic and they have to go through 17 different departments to get signoffs.”

McCarthy is not seeking reelection when her term expires next year. Several months ago, she asked the city council to appoint the planning director as the point person on development, but the council hasn’t acted. She disputed the perception that the city is anti-development.

“We have a lot of activity, so we want to keep 128 commercially active, and we want to keep the neighborhoods preserved, so it’s a balancing act between the neighborhoods and Route 128,” McCarthy said. 

Email: sadams@thewarrengroup.com