It's still not an easy garage to place underground - there is a sizeable ventilation system that will have to be worked around, one way or the other. Not impossible, but also not the most free of obstructions..
This could easily support a few hundred low-parking units. I think you'll need some parking if you intend to keep a grocery store on site (I selfishly recommend to maintain at least the grocery store, since there aren't many others around within walking distance of my house, and this one's already a little bit of a walk)..
I don't think we'll see anything on this lot any time soon. I believe it swapped hands to another Retail REIT company that has a reputation for holding properties and not doing much else other than retail, so as long as they can make some money off the leases here, I don't think they'll be doing much.
A developer is going to take a TON of risk if they want to substantially develop this further than something like 3 single-family homes (even that might be a challenge). A low-rise lab building was shot down next to this site, and you're going to be dealing with likely the most NIMBY group in the metropolitan area. I wouldn't risk my money on that...
(Small side rant, there were a lot of posters pasted up last year about how Cambridge wasn't considering the residents' right to park by putting in a bike lane on Mass Ave... Every time I walked by one of them, there were maybe only one or two parked cars, and even now, with the bike lane and the decreased parking, there are plenty of open spots to park on the side streets and Mass Ave.)