Seattle’s Downtown has Changed. Perhaps Forever. Time to Reconsider a Major Public Asset

In the last 50 years, Seattle has become one of America’s leading regional business centers. This included new bank towers in the 1980s, the emergence of a “Financial District” in the 1980s, the expansion of Starbucks and Fred Hutchison in the 1990s, Paul Allen and Bill Gates’ new campuses in the 2000s, and Amazon’s growth in the 2010s.

Massive spending to make downtown a destination for both work and play included the bus tunnel and light rail, cultural venues, multiple stadiums, and the new waterfront promenade. Throughout, the Sound and saltwater have kept downtown from becoming another bland corporate center like Dallas or Atlanta.

The pandemic, however, inflicted a blow from which downtown has yet to recover. Downtown towers emptied, foot traffic declined, cafes and businesses closed or relocated, and it’s now clear that work patterns have changed, perhaps for good. We need to reimagine a new city center that supports how we now work and live today. 

The starting place for this is right in front of us: the waterfront, where there are vast tracts of publicly-owned land that are now vacant and covered with asphalt. How to attract more people to the center? We could put that land to better use, into places that would attract talent and investment. Combined with Seattle’s quality-of-life and world-class organizations, the investment would make Seattle not just a prosperous regional center, but, like Singapore and Vancouver, a vibrant city-state on the Pacific Rim. 

Here’s the case:

Downtown Office Vacancy is Stagnant

Downtown Seattle has long been the region’s job center, the place where banks, insurance companies, and Amazon are located to draw on a regional labor force. Vast public investment in freeways and rail lines brought workers in the morning and took them home at night. Since COVID, however, many of these workers stopped coming in.  The number of people working downtown on any given day has decreased from approximately 160,000 pre-COVID to around 100,000 now. On an average day, only about 50 percent of downtown office space is currently occupied, one of the lowest rates in the country. 

According to Stanford Business School professor Nicholas Bloom, national commuter patterns stabilized about three-and-a-half years ago, and return-to-work mandates are not likely to be enforceable. Bloom and others view Amazon’s recent mandate as a means to reduce payroll without incurring severance payments, potentially leading top employees to leave the company.  Downtown Seattle relies heavily on industries with high rates of work-from-home employees, including information technology, finance, and professional and business services. A recent experiment by one tech company found no difference in productivity between hybrid and all-office workforces.

Workers Don’t Want Long Commutes

Bloom’s surveys have found that there are two leading reasons for working from home: saving commute time and having more flexibility in scheduling. These are both bad news for downtown Seattle, where the typical commute is about 45 minutes. That’s not only 90 minutes out of the workday, but it also means that parents can’t volunteer in the classroom or pick their kids up after soccer. Rather than rank-and-file cubicles, some of Seattle’s most progressive employers, such as MCG Health, have transformed their offices into hotel-style meeting centers where teams from across the country convene. The headquarters function of big cities no longer includes back-office operations.

While downtown Seattle is still seeking a new competitive strategy, the Eastside is quickly gaining ground, capturing a larger share of the remaining jobs. Since COVID, the Eastside has gained 10,000 jobs while Seattle has lost 60,000. If Amazon shifts an additional 10,000 jobs from downtown Seattle to the Eastside to meet its targets, the two areas could soon have the same number of jobs. Bellevue’s goal is to become “a hub for global business and innovation.” Few places, besides the gargantuan Los Angeles, have more than one business hub. Meanwhile, Bellevue and the Eastside are attracting those jobs because they offer better schools and more family housing.

A Wealth of Underused, Public Waterfront Land

To entice back this talent, Seattle needs something different, something the Eastside cannot provide — saltwater, “real water.” There are very few places in the region where people can walk to the beach, see the tide coming in and out, and pick up a clam. More people would choose downtown Seattle if they could walk to the Sound.

Fortunately, Seattle has hundreds of acres of vacant, public-owned waterfront land where it could build tens of thousands of new housing units in master-planned neighborhoods that reflect how we live and work today. All of this is within a 15-minute bicycle ride of downtown.

There are about 250 acres of this underused land. The most immediately developable of these properties is Terminal 46, located immediately south of the Washington State Ferries’ Colman Dock. Imagine a single lot that is about the same size as the area of downtown, stretching from First on the west to Fifth on the East and from James on the south to Pine on the north. There is enough land here for approximately 7,000 housing units, plus shops, cafes, parks, greenways, and workshop space for new businesses. And all that right next to Puget Sound and a ten-minute walk from Pioneer Square.

But First: The Myth of a Working Waterfront

Labor unions have argued that this land needs to be reserved for marine-related industry, but those jobs are not coming back. Large shipbuilding left the U.S. in the 1960-70s, followed by major repair yards in the 1980s. Welders, electricians, and pipefitters who grew weary of the constant layoffs in the marine industry moved into steadier land-side construction.  Today, companies that build workboats are scattered around the region in lower-cost locations such as Anacortes, Bremerton, Whidbey Island, Port Angeles, and Grays Harbor.

Most of the vacant waterfront land was formerly used for container shipping, and today, that container shipping has either been consolidated at Terminal 5, west of Harbor Island, or lost to Tacoma, Vancouver, Southern California, or the East and Gulf Coasts. The contraction is stark. When the separate Ports of Seattle and Tacoma merged their seaport operations ten years ago, each shipped about the same number of containers. Today, Tacoma ships about 50 percent more, and Seattle now accounts for less than 5 percent of total West Coast container shipping. Total West Coast container shipping remains flat, while shipping on the East and Gulf Ports increased by about 40 percent. Seattle’s port has not kept up. Automation and efficiency draw ships. Singapore, one of the world’s most advanced ports, moves 14 times as many containers per acre as Seattle.

Seattle’s Past — “Portal to the North Pacific”

The inscription over the Mt. Baker Tunnel reads: “Portal to the North Pacific,” but in the last 80 years Seattle trade has gone from the waterborne north-south trade in lumber and fish to the east-west trade in jets, software, and professional services. The Port of Seattle’s budget reflects this, with aviation revenues projected to be 12 times those of the seaport.

Seattle doesn’t just compete with Bellevue, but also with cities like Bend, Boise, and Boston, which is why Seattle needs to think bigger.  Trump’s research cuts, visa restrictions, and ICE raids threaten the UW, the Seattle Cancer Care Alliance, and the technology and tourism industries. His trade war with China is choking what was once a robust international trade business. To insulate itself, Seattle needs to adopt a city-state mentality similar to that of Vancouver and Singapore.

Seattle now faces a clear choice: follow the model set by leading Pacific Rim cities and invest in vibrant, world-class neighborhoods — or risk falling behind economically and culturally by clinging to mindsets of an economy that no longer exists.