Downtown Seattle’s troubles go beyond the pandemic

A New York Times headline this week read, “As Big Tech Grows in the Pandemic, Seattle Grows with it.” However, the story mostly relates to the East Side, while downtown Seattle continues to be in trouble.

That’s in part because Amazon, which employs 50,000 at its central core, announced this week that it will allow many corporate and technology employees to work from home indefinitely.

Amazon is the largest downtown office space owner, the city’s largest private employer, and a large local taxpayer. But it also affects companies that aren’t even affiliated with Amazon, potentially influencing their decisions to continue working remotely and reduce their office rents.

According to a recovery tracker compiled by the Downtown Seattle Association, 24% of workers were back in their offices by the end of September compared to the same period in 2019. Little has changed in this regard since the beginning of July, when the delta variant emerged as a highly contagious component of COVID-19. Work from the downtown office had increased to 17% by the end of March 2020.

Office buildings are never 100% occupied. Nationwide, the occupancy rate before the pandemic was 60%

There’s good news: Domestic downtown visitors had rallied to 84% of their 2019 levels by the end of September. It was 16% of the visitors from the previous year at the end of March 2020.

Similarly, hotel demand had rebounded to 63% of the 2019 total. In spring 2020, it slumped in the single digits. Tourists are coming back.

In addition, more than 1.3 million square feet of downtown office space has been completed this year and another 1.2 million has been under construction. (Offices cover 83 million square feet there, the highest concentration in the area.) But many of these projects were planned before the full effects of COVID-19 were felt.

Of course, a lot will depend on how many Amazon teams are allowed to work remotely. I have already noticed that buses are picking up employees from headquarters.

But if it becomes a near-permanent phenomenon, it would have a profound impact on the city center, including local transport.

Although the 1918 influenza pandemic killed proportionally many more people than COVID-19, things quickly returned to normal after they faded. But that era didn’t have the technology to allow so many workers to work remotely (of course, many workers today don’t have that luxury – only one in four expected to work from home this year).

Many other central business districts are not as badly affected. Austin has half of its office workers back, followed by Dallas with 45%.

Cushman & Wakefield, the real estate services company, released a study in late September that predicts the majority of the workforce will return early next year.

“Most companies hope to get back as soon as possible,” said David Smith, global head of Occupier Insights and co-author of the study. “This is not a conversation about never going back, but about when we can safely return to the office because almost all employees and employers have indicated that they want to return – more flexibility, yes, but they want to go back.”

We don’t have to travel to Texas to see the trend either.

The New York Times reported that U.S. office rentals in 2020 were down 36% year over year. But the Seattle area became the top location for tech companies renting large office space, fueled by the growth of businesses during the pandemic. At that time, these companies were obviously expecting workers in the office again.

The problem for downtown Seattle is that most of the new action is taking place on the Eastside, especially in Bellevue. Amazon alone wants to hire 25,000 employees there, while Microsoft is expanding by 17 buildings and 8,000 employees in Redmond.

This is not surprising when you consider that Seattle has made itself less competitive in the area by passing a business tax that would apply to higher salaries of about 800 companies (although sold as an “Amazon tax”).

At the same time, crime is increasing and is increasingly being tolerated by the town hall. Likewise, the homelessness, despite hundreds of millions being purportedly spent to combat it. These are city-wide problems, but they are most felt in the city center.

Surprisingly – at least compared to most of the cities I know – crime is not an election issue.

Earlier this month, Weyerhaeuser said it would delay the return of employees to its headquarters in Pioneer Square without “significant and sustained improvements in security in the neighborhood.”

You are hardly alone. Downtown IGA Kress and Bergman Luggage were among those who closed because employees feared downtown. The section of Third Avenue from Pine to Benaroya Hall is a zombie film made true about addicts, tent dwellers, and verbal threats.

My colleague Paul Roberts wrote, “Some companies in Pioneer Square welcomed the news of Weyerhaeuser’s delay, saying this could be a wake-up call for city officials some traders say they haven’t given the iconic neighborhood enough attention or resources.”

Darcy Hanson, whose Merchant Cafe and Saloon is across from a tent camp across from Yesler Way, said to him, “I’m glad you said so, you know what? You will pay attention to Weyerhaeuser. “

I wonder. The left majority in the city council sees big business as a class enemy. Mayoral candidate M. Lorena González spurned the Downtown Seattle Association’s candidate questionnaire.

It implies that downtown is no different from any other part of the city, despite the fact that it generates the majority of the city’s business taxes and was home to 328,000 jobs prior to COVID-19. It is the region’s cultural and sports center. And that’s where over 84,000 Seattle residents live.

Meanwhile, Nicole Thomas-Kennedy, candidate for city attorney, is running as an “abolitionist” who would essentially stop prosecuting many categories of crime that she attributes to poverty or disability. As a winner, she would offer no protection to any company or employee hoping to return to the office here.

The difference to the East Side couldn’t be stronger or seem stronger against Seattle.

It is impossible to know when the pandemic will be under control. But if Seattle’s central business district is fatally wounded, it’s not because of COVID-19.