Amazon’s Real HQ2 2: Threat or Opportunity?

6
Bellevue, WA

Amazon appears to be serving up its revenge on Seattle politicians in mute, cold doses. The latest plot twist is this new story in the Seattle Times, detailing the company’s new plans for greater expansion in Bellevue. It’s increasingly clear that when the giant Seattle company went looking for a second headquarters, it did choose two after all. Initially the Washington DC suburb of Arlington and another in New York City were picked. Then, under pressure from New York’s famously tough local politicians, Amazon abruptly canceled plans for the New York HQ. The company has gone ahead with Arlington, and now, (unannounced) with Bellevue. The company now projects it will house 25,000 employees in downtown Bellevue, up from earlier projections of 15,000, same as in D.C. (Seattle has 55,000 Amazon workers, spread over about 50 buildings.)

Word is that Amazon’s top brass feel angry at Seattle’s anti-business political climate, which has repaid Amazon’s clumsy efforts to elect a more pragmatic city council by slapping a tax on high-earners and targeting Amazon to pay the highest amount. It feels like a rebuff. Amazon chose to build its base in the city (not the suburbs like most tech campuses), and expected gratitude for its urbanism. Instead, Amazon gets demonized for all manner of problems — high housing costs, a distorted building boom for small apartments, congestion, “the prosperity bomb,” a gated complex, the loss of funky retail stores, monopolistic arrogance.

You don’t really push around Amazon. So, apparently, it has decided to stop expansion in Seattle, and to give up on trying to shift the anti-business politics of the city. See ya!

One of the ironies of this shift is that the building of light rail to downtown Bellevue may have as much to do with the Eastward tilt as Seattle’s populist politics. Related to this is the sense that the Eastside is no longer a colony of Seattle, since it now has the jobs, the housing, the good schools, and the urban amenities that used to require a trip to Seattle. The only thing missing from the new urban mix is the arts, as exemplified by the long, so-far-futile effort to build a performing arts center — PACE, for Performing Arts Center Eastside — in the heart of Kemper Freeman’s Bellevue.

The departure of Amazon employees from downtown Seattle, partly as more work remotely, will have a devastating effect on Seattle’s downtown. Much of the city’s retail (restaurants, bars, nightlife, upscale shops, services) will be significantly affected. True, some rental costs will decline considerably (for a while). But uncertainty and depressed profits will further dampen investment in new retail, in new businesses, and in new residential towers.

Meanwhile, columnist Danny Westneat files a story meant to calm our worries. Keeping Amazon expansion in the region, by putting more in Bellevue, is mostly a plus (assuming Seattle keeps its Amazon jobs). And if Seattle is emptying out, why did a big New York developer just file plans for a 40-story high rise right next to an Amazon tower in South Lake Union?

My version of good news amid the jitters is to stress the opportunity in this migration to The Wild East. That would be to embrace the notion of a Twin Cities future for the greater Seattle area. Transit will help. So will some regional institutions such as the new Seattle-King County governance for dealing with homelessness (a major achievement by Executive Dow Constantine and Mayor Jenny Durkan). It also helps to see this evolution as a spreading of urbanist living to a broader network of interconnected smaller cities, as Seattle planners have long envisioned for our “poly-nucleated” future. Already the Eastside Quad Cities (Bellevue, Kirkland, Redmond, and Issaquah) have a population equal to Seattle’s.

This could be planned and coordinated growth, or it could be left to market forces (as now). What’s needed is some system for allocating assets. Minneapolis-St. Paul provides the best example, with its metropolitan governance, tax-base sharing, and enhanced distinctiveness for the multiple cities. The big question is whether the regionalist options are still on the table, or whether the separate cities are now big enough to claim “states’ rights.” Since Seattle (like Los Angeles) has an allergy to regional governance, count me as not hopeful.

6 COMMENTS

  1. Bellevue, Kirkland, Redmond & Issaquah need a collective acronym. Leading contenders would be BRIK, KRIB, and KIRB. And, of course, Boaty McBoatface.

  2. We citizens of Seattle should get over ourselves. Amazon isn’t moving jobs to Bellevue so it can get revenge on us. Amazon is doing what every rich and powerful business juggernaut always does: whatever it wants, whenever it wants, for whatever reason it wants. Some of those reasons are very pragmatic, as you point out when you mention light-rail expansion to Bellevue. So when the city of Seattle asks Amazon to pay taxes at a rate that Amazon is obviously able to afford, and Amazon responds by a moving chunk of its work force to a city just across the bridge from us, we beat our breasts and cry, “Was it something we did?” Of course it was. For a brief moment, we forgot who was really in charge and we stood up for ourselves. Shame!
    It’s kind of embarrassing how we allow ourselves to get all stirred up by the Amazon spin machine and start blaming ourselves for everything it does. (Do I think Amazon has a spin-machine that’s designed to recast its entitled and uncivil behavior as hurt feelings? Yes I do; imagine that.) Thank goodness for Danny Westneat who seems to be equipped with both a level head and a sturdy spine, and is resisting the call to hysterics. Like him, I’m pretty sure that Seattle will recover. It has before.
    And do we really owe Amazon some gratitude for its “urbanism” by giving it a pass on paying its fair of taxes? Cool. I’ll take that to mean that the city also owes me a break on my taxes because I have kept my urbanist little butt planted in Seattle since 1970 and I need a favor more than that book-slinging, tax-avoiding, bloated money machine does. Yes, it’s been a daily struggle for me living in the middle of this bleak and dangerous urban jungle. I deserve a reward for my sacrifice. Where do I apply?

  3. Not to worry Seattleites, you are about to become the bedroom community for Bellevue…….How things change.

    Good read David,
    phil

  4. David,

    There is a factual error in comparing the population of Eastside cities to Seattle. Combined, these four (Bellevue, Kirkland, Redmond, and Issaquah) have population of 351K which is less than half of Seattle (753K). Would this change any of your conclusions?

    Sammamish is at 65K which doesn’t change the arithmetic much. Note that Kent (132K) is not that smaller than Bellevue (148K).
    https://en.wikipedia.org/wiki/List_of_cities_and_towns_in_Washington

    • Thanks for the correction. I was relying on somewhat older information, back when we were publishing Eastsideweek, that the TOTAL population of the Eastside was equal to Seattle’s, though spread over three times the geography. Obviously the Eastside is more populous than just the four cities I mention, and I apologize for the clumsy mistake. Still — lots of folks over there!

  5. The reality seems to me that there are lots of divisions and departments they can put into Bellevue, Washington DC or wherever, but the experience from watching Microsoft Is that where ever the corporate offices are with the likes of a Bill Gates or Amazons Bezos Is where the real headquarters always will be. The people who make up the executives of any company want to be around the head king maker. It’s the way it’s always been and always will be, unless Bezos’ office is in Bellevue that headquarters will be in Seattle.

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