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Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

September 17, 2014 at 4:13 PM

With “Startup Hall,” U District aims to be new tech hub

South Lake Union has become pricey and packed, Pioneer Square is expensive again and downtown is out of reach for early-stage companies, so perhaps the University District can host the next wave of startups.

That’s the hope, at least, of a coalition of investors, neighborhood advocates, developers, city planners and the University of Washington.

The focal point of their campaign to make the U District more entrepreneurial is Startup Hall, a rentable space for startups  now operating on the second floor of a former UW law school building.

“It just seems like a great move to begin to jumpstart what is this gradual redevelopment of this entire district,” UW President Michael Young said during an opening celebration at the space Tuesday night.

Three ventures that finance and incubate startups — Techstars, Founder’s Co-Op and UpGlobal — are anchor tenants that began using the space in July.

Most of the space, the former law school library, is a sea of clustered desks rented out for $350 per month. Walls have chalkboards and white boards and there’s a shared meeting room for making presentations.

startuphall

It’s a little surprising that the UW is giving up precious space on its extended campus. The school is simultaneously asking lawmakers and private donors to support new facilities. Its 10-year wish list includes $7.57 billion worth of new construction and renovations.

But school leaders say they’ll break even on the project and the space in Condon Hall is too small and outdated to be used for, say, new biology or computer-science facilities. It’s also removed from the main campus, to the west, near the University Bridge.

“This is not a lot of space; it’s not translatable that way,” Young said.

The UW spent about $1.5 million remodeling Startup Hall but expects to recoup the cost from rent, according to Paul Jenny, vice provost of planning and budgeting. He said the project has a “break-even strategy.”

“We don’t want to make money on this but we can’t lose money, either,” he said.

So far about 75 percent of Startup Hall’s “office space” is rented, mostly by Techstars and entrepreneurs going through its startup incubation program, previously based in South Lake Union. It’s now hosting 10 companies involving about  30 people. Six of the companies came from out of state, and two were started by recent UW graduates, according to Egita Polanska, Techstars program manager.

Young and tech investor Chris DeVore, co-founder of Founder’s Co-Op and director of Techstars, talked over the concept while serving together on the city’s economic development commission.

DeVore said it makes sense for Seattle’s next cluster of startups to emerge alongside the university. “For us the raw material of startups is hungry young people,” he said.

This also dovetails with city efforts to rezone the area to increase its density and attract a wider range of businesses beyond rental housing and small retailers.

Cities large and small around the world are doing the same thing, shaping land-use plans to accommodate tech companies in hopes of creating startup scenes like those that over the past 40 years blossomed naturally in university towns such as Seattle, San Francisco and Boston.

These efforts seem to benefit real-estate developers as much or more than early-stage entrepreneurs looking for cheap and funky spac,e but the allure of fostering “the next Silicon Valley” is irresistible.

If you’re hatching the next great tech company and don’t have access to an office — or a garage like the ones that Apple, Amazon.com, Google and Hewlett-Packard used to get started — there are still spots available in the “collaborative space” at Startup Hall. As of Wednesday, the UW hard rented two of the 60 desks.

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