Recovery: How Portland and Seattle Downtowns Will Come Back

The song, “Downtown,” written in 1965, evokes an earlier wish: “Go downtown, things’ll be great when you’re/Downtown, no finer place for sure.” And then downtowns went into a dark age.

Post-Covid the downtowns in Portland and Seattle seem to be in a darker age.

When will each recover, and what will they be like? And which will be more interesting? The short answer: Seattle will recover quicker, and Portland will be more attractive.

Downtown Portland and downtown Seattle share some key characteristics, but they are very different places. Each is bound by a waterfront on one side and a freeway on the other, and each has a transit corridor running down its middle with busways barren of street-front business. Each also has a former industrial area to the north — the Pearl District in Portland and South Lake Union in Seattle — that has been stealing downtown business for the last 20 years.

But in other ways these cities have a fundamentally different sense of place borne out of how they were settled. Portland was a merchant city that emulated Boston. Seattle was a railhead, the “Gateway to the North,” a rough-and-ready port.

Downtown Portland is relatively flat and walkable, with short, small blocks, and numerous parks throughout. Its Class A office buildings mingle attractively with the smaller, older buildings throughout. In contrast, downtown Seattle sits on a bench above the waterfront, with steep streets like Marion connecting the waterfront to a financial district with skyscrapers. Seattle has few parks downtown, and the streets running by those tall buildings are not a place to linger.

Both cities have had retail problems for the last 20 years, with downtown Portland having lost the best stores to the Brewery Blocks north of Burnside, while downtown Seattle has lost out to University Village. (Another rival downtown retail center, Pacific Place, which opened in 1998 with Tiffany’s, has been struggling since long before Covid.)

Seattle’s retail suffered more from Covid, which wiped out many of the coffee and sandwich shops in the financial district. Some of the stores formerly located downtown have now moved to the tourist path stretching between the Convention Centers and the Pike Place Market. With the internet continuing to eat into brick-and-mortar sales, the future of retail in each place lies with dining out and tourism. Portland, with its more walkable streets, plentiful parking, and downtown performance venues, has the advantage.

Seattle has the edge in office recovery. For starters, Puget Sound easily has twice as much business as Portland, and more of its tech industry, notably Amazon, has located downtown. In Portland, most of the larger tech firms never came in from the office parks in Beaverton or Hillsboro, and smaller professional and tech firms that moved into historic spaces near the river now have to cope with drug dealing on the sidewalks right outside their offices.

The big question for Seattle is how many people will come back to those high-rise, Class-A office buildings, particularly those in the financial district. Refilling that space will be harder than most property owners or leasing agents will admit. Actual occupancy rates, measured in person days per week, are probably 30 to 40 percent of what they were pre-Covid, and no major employer will want to pay for a lot of space when people are only coming in two or three days a week.

Of all the industries, tech has had the lowest return-to-work rate, probably because much of the work is amenable to a once-a-day Zoom call. Bellevue is the other big threat for Seattle. Amazon plans to add 25,000 workers on the Eastside, and many of those could come from leased space in downtown Seattle.

Additionally, as Amazon’s workforce matures, those with young families may move to the Bellevue offices because the Eastside schools are far better than Seattle’s. According to Niche.com, 14 of the top 15 high schools in the state are on the Eastside. 

In Portland, the question is how fast many of the older Class B and Class C office buildings will find another use. That process will probably take three to five years to start, as longstanding owners sell or those who have purchased them more recently lose them to receivership. Expect another five to ten years before others follow those pioneers and create a critical mass of repurposed, vibrant buildings. It took 15 years for that process to gain momentum in the Pearl District, and it may now take ten years to repeat in the Rose City’s downtown.

Downtown Seattle has the clear leadership advantage, but that leadership may be naive about what it will take to turn around the place. At a recent Urban Land Institute event held at the UW’s Foster School of Business, panelists from real estate and government focused on the problems of safety and security, and there was little talk about reimagining downtown with different land uses or functions. Instead, the panelists spoke of “reactivating” downtown with events, as if it was a car with a dead battery that could simply be jump-started with occasional entertainment on the streets or in pop-up stores.

The real question is what will happen 20 stories above the streets.  Seattle Mayor Bruce Harrell has a revitalization strategy for downtown, but that strategy is long on process and short on outcome.  In downtown Portland with its endemic political problems, there is no plan for how to deal with the real estate.

There has been so little done to remedy drugs or homelessness that the governor of the state, Tina Kotek, finally stepped past the mayor and formed a task force whose primary recommendations were re-criminalizing hard drugs and putting a moratorium on new taxes, which are now the highest in the country after New York City.

Voters have grown so frustrated with city government that, for the first time in 110 years and eight prior attempts, they have changed the form of city government. No one knows who will be in charge a year now, when the new charter takes effect, or how that government will work. The Portland Development Commission oversaw many physical improvements downtown that made the place livable and famous, but that organization now has a DEI agenda and has lost many of its more experienced staff to suburbs like Beaverton.

With a stronger economy and better leadership, downtown Seattle will come back sooner, probably in four to six years, but in a recovery will be far from incomplete. I predict a more organic and grass-roots recovery in Portland, one that will lead to a far more interesting place, but that that recovery will take ten years or more. 

For Portland and Seattle, a true turnaround will require reimagining the role and function of downtown, and neither city has the leadership right now to do that. Seattle will go through the motions of revitalizing downtown, with “clean and safe” patrols along Pike and Pine and other major tourist areas near Nordstrom and the Market. Large areas of downtown, however, will remain lonely and menacing places, particularly downtown along First, Second, and Third Avenues south of University Street and around the Government Center. Many landlords, like those at the Metropolitan Tract, will be forced to form business improvement districts to provide for their own security. 

The big financial challenge in both downtowns is office values, which may fall 40 percent from their pre-Covid highs. Some properties will go bankrupt and others will lack the funds for tenant improvement. The “walking dead” period for a number of downtown buildings could last five years or more. 

While the recycling of older buildings in Portland will probably take five to ten years, at the end of that period more of its downtown will be in new uses, whereas large parts of downtown Seattle will still be struggling. Downtown Portland is the only major urban center in the state and it has an emotional pull on the heartstrings of people in the region. Enterprising Gen Y developers will pioneer those building conversions for which the parks, streetcars, and walkable streets will provide a stronger sense of place than in downtown Seattle, as now. 

I expect those Portland conversions south of Powell’s Books and near the landings of the Burnside, Morrison, and Hawthorne Bridges. Some of that renovation will likely include workshops for design an production moving from the inner southeast industrial area. 

Seattle’s biggest challenge will be a familiar one — not thinking too big and not simply copying strategies that worked elsewhere. Doing so creates big projects that eat up most of the public funding and squeeze out high-character retail. Such uses do not have widespread impact, and they can  quickly go stale. (Think the Westlake Mall, the South Lake Union Streetcar, and even the waterfront park now under construction.) 

Ten to 20 years from now, the most interesting and vital part of downtown may be Pioneer Square, where the parks, street trees, and smaller buildings can make for the kind of urban mix that people find in Europe.

At some point, Seattle leaders will likely send a task force to other cities to look at what’s working. Those trips should start with a visit to Seattle’s pioneering roots, our own first place, where urban life is already coming back.