Amazon rides to the rescue of Seattle’s ailing downtown
Deciding to examine Amazon’s return to its South Lake Union and Denny Triangle offices myself, I found a scene outside reminiscent of Seattle around 2016.
Employees were catching up with people they hadn’t seen since the pandemic emptied offices. Plenty were wearing jackets and jeans and carrying backpacks, but suits and dresses were also there. Long lines of cars went into all the parking garages, and shuttle buses came, too.
At least 300 people were having lunch from the restaurants there Tuesday. It was pleasant outside, the perfect environment for “creative friction,” a term that describes the sharing of ideas and spontaneous innovation that can’t be found with remote work. Employees and dogs enjoyed the festive parks. A nearby nail salon was booked solid. Outdoor areas offered comfortable and colorful furniture and a playground/art installation Los Trompos (merry go rounds).
If anyone was unhappy about the three-day-a-week mandate, it didn’t show.
I mention 2016, because that was when Seattle was unquestionably Amazon’s global headquarters, building out to 50,000 well-paid jobs. The antipathy from the City Council majority hadn’t driven the corporation to seek a “full, equal” HQ2 or plan to move thousands of jobs to lower-tax, “business friendly” Bellevue. Two mayors failed to have a constructive relationship — or one at all — with the city’s largest employer.
And all this came before the calamity of COVID-19.
It’s important to remember that only 10.6% of the U.S. civilian workforce can work remotely, according to the federal Bureau of Labor Statistics. The numbers vary depending on the occupational group, with tech being much higher. But office workers matter, especially to the health of downtowns.
The Financial Times editorialized about the fear of an “urban doom loop” as empty commercial office space affects taxes, transit systems and schools, increasing municipal deficits and swinging back around to seek taxes elsewhere, further running out businesses. “The big worry is some of America’s largest cities are headed back to a 1970s-style period of blight and decay.”
San Francisco most faces this threat, including from crime, drug use and homelessness. So does Portland, which was hammered by months of protests in 2020. Office vacancies there more than doubled since 2019 and some key employers moved to the suburbs.
Portland suffers from being one of the 10 worst markets for office investment in the country (followed by Tacoma).
Here, with Amazon, the uptick in foot traffic in the middle of the week is clear, and you can see it radiating from the Denny Triangle neighborhood.
The first week of the Amazon return, downtown hit a daily average of 77,000 worker visits — the highest daily average seen since the start of the pandemic. It will be interesting when the Downtown Seattle Association updates its recovery numbers next month. Downtown is critical because it generated the majority of employment and business taxes pre-pandemic.
The largest employer bringing workers back to the heart of the city should send a clear message to other employers (private and public) that it’s time to return. After all, Amazon is a company constantly analyzing data for every move it makes, and it has determined that being in-person for at least three days per week is a sound strategy.
This can and should build momentum — and that momentum will help small businesses, restaurants, arts and culture. It’s about getting people back downtown and doing what we can to ensure a clean, safe, interesting and welcoming environment once they’re here. Mayor Bruce Harrell clearly gets this, as does City Attorney Ann Davison.
Seattle can’t count itself immune despite the roaring success of the 2010s and Amazon’s return. We face considerable headwinds.
My colleague Gene Balk reported on recent data from the University of Toronto and University of California, Berkeley. It showed Seattle at No. 51 out of 63 in North American cities in its downtown recovery as of February.
Salt Lake City ranked first, followed by Bakersfield and Fresno, Calif., then Columbus, Ohio, and El Paso, Texas. Obviously, these are very different downtowns from Seattle. But we also fared worse than Denver; San Jose, Calif.; Boston; and Austin, Texas.
Elsewhere, for the first time in years Seattle fell out of the Top 10 markets in the closely watched PricewaterhouseCoopers/Urban Land Institute’s Emerging Trends in Real Estate for 2023. At the top were Nashville, Tenn.; Dallas-Fort Worth; Atlanta; Austin; and Tampa-St. Petersburg, Fla. Seattle came in at No. 17.
Meanwhile, according to The New York Times, Seattle and other coastal cities are pricing out not only low-wage workers, but also college graduates. And The Wall Street Journal just pronounced the return to the office “stalled,” at least for five-day-a-week mandates.
“Employees are saying we are going to push really, really hard against being required to be in the office five days a week,” Robert Sadow, chief executive of Scoop Technologies, which monitors 4,500 companies, told The Journal. “Most companies in the current labor market have been reluctant to push [back] that hard.”
The labor market in Washington for tech jobs remains strong, despite layoffs in prominent companies, including Amazon.
But three days a week in the office, after the damage to downtown? I’ll take it.
As Churchill said as the tide began to turn in favor of the Allies in World War II, “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”