Needham will spend $50,000 to study whether its own zoning and permitting rules are driving businesses away from downtown storefronts.

Economic Development Director John Sisson laid out the case at the Council of Economic Advisors' (CEA) Sept. 16 meeting, pointing to vacant properties where prospective tenants walked away after hitting walls of red tape. The study, funded by a state earmark secured by State Rep. Josh Tarsky, will examine how special permits, parking requirements and outdated use tables affect commercial activity across town, the Needham Observer reported.

Sisson, who took the job in March after the position sat empty for nearly a year, described food truck operators who wanted to open their first brick-and-mortar restaurant in a vacant Chestnut Street space. A legacy special permit tied to three formerly co-owned parcels, now under separate ownership, blocked the deal.

"These special permits are like vampires," Sisson told the CEA. "They don't die. They sit there waiting for you to happen upon their crypt."

On Great Plain Avenue, a local restaurant exploring a second concept at the former Kebab House site and other parties eyeing the former Sky Candle location a few doors down both ran into parking requirements that did not match the actual parking on the ground. Sisson said the special permit process alone can add three months. That delay kills deals.

Bob Hentschel, a CEA member and director at Petrini Corp., one of Needham's largest commercial landlords, said the town's commercial district "use tables" need an overhaul too. The tables define what businesses are legally allowed in each zoning district. Hentschel called the current version "literally indecipherable and useless."

The Planning Board is already moving in a similar direction. At its June 16 meeting, member Adam Block said the board sees significant opportunity for regulatory reform by shifting some commercial uses from special permit to by-right approval. Stantec Consulting Services presented recommendations at the same meeting to loosen parking standards for restaurants, including raising the threshold for a change-of-use parking review from nine or fewer additional off-street spaces to 15 or fewer.

Planning Board member David Mertz, a 30-year Needham resident, put the stakes bluntly, saying the downtown "has never knocked his socks off."

The CEA, a 16-member body appointed by the Select Board, will direct the study. Sisson said it will include public outreach asking residents what they want, whether that means more arts and culture, a more active downtown or other changes, and then examine what regulatory barriers stand in the way. The study will focus on policies the town controls rather than market forces like construction costs or land prices.

The $50,000 earmark must be allocated by the end of the fiscal year in June. The CEA aims to define the project scope by the end of 2026 and bring a consultant on board by early 2027.