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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

February 6, 2014 at 10:47 AM

Seattle’s ‘biggest boom ever’?

The Seattle Daily Journal of Commerce had an interesting post recently positing that we might be seeing Seattle’s ‘biggest boom ever.’ At the least, it offers an essential thumbnail history of downtown construction booms of the past. Not only does Seattle have good bones, but it never allowed the hollowing out that has set back or outright destroyed so many American center cities.

It remains to be seen. But no question there are cranes all over, viable plans — not pipe dreams or hustles — for major new projects, strong employment numbers and a sense of prosperity that, if anything, is beyond what I saw when I arrived here in 2007, before the Great Recession hit.

There are important caveats. Mark’s Hallmark is closing its Fourth Avenue store after decades, another loss of a locally owned gem on this important thoroughfare. Distinctive local businesses, a backbone of a real city, are under great pressure, not least from hometown anaconda Amazon. Plenty of people are in low-wage jobs and working more than one job to get by.

Still, there’s no denying Seattle’s health, along with Bellevue and much of the Eastside. Why is this happening in “the lesser depression,” “secular stagnation,” these new hard times when so many cities and metropolitan areas are still underwater, much less the troubles in many smaller towns and rural areas not being fracked?

1. The aforementioned neo-monopolist is our neo-monopolist. Thus, we get, what, 18,000 well-paying headquarters jobs (the company doesn’t break out precise numbers)? Amazon has filled up South Lake Union and leased space in downtown proper, and now it is starting its own (sadly boring) Denny Triangle towers.

This kind of economic engine comes along once every few decades, if a place is lucky. It also draws an asteroid belt of vendors, professional services firms, etc. As important, it attracts world talent.

2. Vulcan and South Lake Union. Hate Paul Allen if ye wish, ye grumpy ones. He could have put his money anywhere: Into cheap suburban sprawl in Vegas and Phoenix, for example. He chose to invest in his city.

Sure, he’s gotten subsidies, but suburbia’s most seeming “free market” accomplishments are heavily subsidized (freeways, flood control, new infrastructure, etc.) while carrying costly externalities (loss of farmland, high carbon emissions, inefficient and maddening commutes). Allen’s investments made Amazon’s 21st century urban technology campus (and the growing biomedical sector there) possible, along with other developments that help ensure the core’s vitality.

Other cities would kill for such a civic steward. As Adam Smith would have said, Quitcherbitchin’.

3. The Bill and Melinda Gates Foundation. Civic stewards, again — they are one of Seattle’s greatest strengths. In this case, the other Microsoft co-founder located the world’s most powerful non-profit’s edgy headquarters in the heart of the city and in the midst of the Great Recession. This is another talent-magnet, in world health. The influence and money that come out of those boomerang buildings are vast and growing — and again, there’s an ecosystem of other outfits drawn to be near the mother ship.

4. Tech centers are thriving. From San Francisco’s ascent to Austin’s continuing unique vibe, cities that have both the talents and infrastructure in place, along with urban cool, are booming. Seattle is among the tops — if only BillG would endow a second research university here, we’d really be set. (The other cities really running counter to the new hard times are energy centers).

5. Boeing. Like our Chicago welfare queen or not — and there’s much about which to be concerned — but Boeing’s continued massive presence in the Puget Sound region is a cushion of high manufacturing wages, engineering talent, export heft and center of the aerospace ecosystem that no other metro enjoys.

6. Headquarters. Your paycheck might be stagnant, if you have one, but most larger American companies are doing better than ever: Record profits, record cash on hand, high-paid employees and restless executives that leave and start new companies. A metro that has a bunch, such as Seattle, is going to benefit. (Now, if we can keep Wall Street from breaking up Microsoft and carting a big part of it to the Valley of Heart’s Delight).

Biggest boom ever? We’ll see. Even the ports of Seattle and Tacoma are talking to each other. Pigs fly. Unlike previous booms, however, we don’t have a strong American economy at our backs. Indeed, much fragility is out there. But like the Super Bowl Parade yesterday, enjoy this moment. It’s rare and fortunate.


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