“As Big Tech grows in pandemic, Seattle grows with it,” said a New York Times headline this week. Yet the story mostly refers to the Eastside, while Seattle’s downtown remains in trouble.
That’s partly because Amazon, which employs 50,000 in the central core, announced this week that it would allow many corporate and tech employees to work from home indefinitely.
Amazon swings substantially as the holder of the city’s largest office space, the city’s largest private sector employer, and a large local taxpayer. But it also impacts companies that aren’t even associated with Amazon, potentially driving their decisions to continue remote working and reduce their office leases.
According to a recovery tracker compiled by the Downtown Seattle Association, 24% of employees were back in their offices by the end of September compared to the same period in 2019. Little has changed since early July, when the Delta version came out as highly contagious. Elements of COVID-19. Work from office downtown grew to 17% at the end of March 2020.
To be sure, office buildings are never 100% occupied. Nationally before the pandemic occupancy rate was 60%
The good news is available: domestic visitors to downtown had recovered to 84% of their 2019 levels at the end of September. This was 16% of the previous year’s visitors at the end of March 2020.
Similarly, hotel demand had reached 63% of the total in 2019. In spring 2020 it collapsed to single digits. Tourists are coming back.
In addition, construction of over 1.3 million square feet of office space was completed this year and another 1.2 million were under construction. (The offices have an area of 83 million square feet, the region with the highest concentration.) But many of these projects were planned before the full impact of COVID-19 was felt.
To be sure, a lot will depend on how many Amazon teams will be allowed to work remotely. Even now I have seen that the buses pick up the staff at the headquarters.
But if it becomes a permanent phenomenon, it will have a profound impact on downtown, including transit.
Although the influenza pandemic of 1918 killed proportionally many more people than COVID-19, things quickly returned to normal after it had faded. But that era didn’t have the technology to allow so many workers to work remotely (certainly many workers no longer have that luxury—only one in four expect to work from home this year).
Many other central business districts are not being hit so hard. Half of Austin’s office workers are back, followed by Dallas with 45%.
Real estate services firm Cushman & Wakefield released a study in late September that predicted most of the workforce would return early next year.
“Most businesses are looking forward to coming back as soon as possible,” said David Smith, global head of Occupier Insights and co-author of the study. “It’s not a conversation about never going back, it’s a conversation about when we can safely return to the office because almost all employees and employers have indicated they want to go back – more flexibility, Yes, but they want to go back.”
We don’t even have to go to Texas to see the trend.
The New York Times story reported that US office leasing fell 36% in 2020 from the previous year. But the Seattle area became the top destination for tech firms leasing large office space operated by companies that grew during the pandemic. At the time, these companies apparently expected employees to return to the office.
The trouble for Downtown Seattle is that most of the new action is on the Eastside, especially in Bellevue. Amazon alone intends to add 25,000 employees there, while Microsoft is expanding to 17 buildings and 8,000 in Redmond.
It should come as no surprise that Seattle has made itself less competitive in this area by passing a business tax that applies to higher salaries on nearly 800 companies (though sold as “Amazon Tax”).
At the same time, crime is on the rise, and is increasingly tolerated by City Hall. So has homelessness, which has reportedly gotten worse despite crores being spent to address it. These are city-wide problems, but most of them are felt in the city.
Surprisingly – at least compared to most cities I am familiar with – crime is not an election issue.
Earlier this month, Weyerhaeuser said it would delay returning employees to its Pioneer Square headquarters without “significant and continuous improvements to neighborhood security.”
They are hardly alone. Downtown IGA Kress and Bergman Luggage were among those that closed because employees feared downtown. The extension of Pine Past Benaroya Hall to Third Avenue is a zombie-film of abusers, tent dwellers, and verbal threats.
My colleague Paul Roberts wrote, “Some Pioneer Square businesses welcomed the news of Weerheuser’s delay, adding that it could be a wake-up call for city officials, in what some businessmen say is the iconic neighborhood. But not enough attention or resources have been given.”
Darcy Hanson, whose Merchant Café and Saloon is across Yeisler Way from a tent tent, told her, “I’m glad they said that, because you know what? They’ll look at Weerhauser.”
I think The city council’s left-wing majority sees big business as a class enemy. Mayoral candidate M. Lorena Gonzalez turned down the Downtown Seattle Association candidate questionnaire.
He implies that the city is no different from any other part of the city, even though it generates most of the city’s business taxes and was home to 328,000 jobs pre-COVID. It is home to the region’s cultural and sports venue. And more than 84,000 Seattleites live there.
Meanwhile, city attorney candidate Nicole Thomas-Kennedy, running as an “abolitionist,” will essentially stop prosecuting several categories of crime for which she accuses poverty or disability. Victorious, she will not provide any protection to companies or employees hoping to return to office here.
The difference couldn’t be more pronounced with Eastside or work more powerfully against Seattle.
It is impossible to know when the pandemic will be under control. But if Seattle’s central business district is mortally wounded, it won’t be because of COVID-19.