What would happen if Amazon brought 50,000

workers to your city? Ask Seattle.

(David Ryder for The Washington Post/A worker cleans the exterior of one of
three glass spheres at Amazon headquarters in Seattle on Sept. 27.)

By Jonathan O'Connell October 19

SEATTLE Amazon.com has driven an economic boom in Seattle, bestowing

more than 40,000 jobs upon a city known for Starbucks coffee and Seahawks
fandom. Its growth remade a neglected industrial swath north of downtown into
a hub of young workers and fixed the region, along with Microsoft before it, as a
premier locale for the Internet economy outside Silicon Valley.

Seattle is the fastest-growing big city in the United States, a company town with
construction cranes busily erecting new apartments for newly arriving tech
workers. Google and Facebook have joined Amazon in putting large offices here.

When Amazon made a surprise announcement last month that it planned to open
a second headquarters with even more jobs, it set off an unprecedented race
among cities to lure the tech giant their way. Amazon said it will need 8 million
square feet in a second region, making it the biggest economic development
target in decades, experts say.

But as Seattleites will say, keeping up with the Internet juggernaut has not always
been easy, providing a word of caution for officials from other cities willing to
pursue the company at great expense.

Over the past decade, Amazon and founder Jeffrey P. Bezos, who owns The
Washington Post, have added new products and business units at a breakneck
speed and expected public partners to keep pace.

In Seattle, that meant rehabbing an area of more than 350 acres at a cost to
taxpayers of hundreds of millions of dollars in ongoing transportation and
infrastructure upgrades expanding public transit, road networks, parks and
utilities.

People walk next to the Day 1 building at Amazon headquarters in Seattle. (David
Ryder for The Washington Post)

It also put new strains on housing. Seattle is one of the most expensive places in
the United States to live, forcing lower-income residents to move to far-off
suburbs. The city and surrounding King County declared a state of emergencyin
2015 over homelessness.

Since then, the problem has worsened. Rents in King County have more than
doubled in the past 20 years and gone up 65 percent since 2009. Seattle spends
more than $60 million annually to address homelessness, up from $39 million
four years ago.

We started seeing apartment listings that would say, No deposit needed and
priority for Amazon, Microsoft and Google employees, said Rachael Myers,
executive director of the Washington Low Income Housing Alliance, a Seattle-
based advocacy group. She said the area is in the midst of the greatest
affordable-housing and homelessness crisis that our state has ever seen.

How much of Seattles evolution is attributable to Amazon is a matter of debate.

In the past decade, millennial workers have poured into other big cities
Washington, San Francisco, Boston exacerbating housing costs and
homelessness there.

But few buildups are so linked to the prospects of one company. Amazon has
contributed $30 billion to the local economy and as much as $55 billion more in
spinoff benefits. Unemployment in the Seattle area is 3.7 percent, below the
national rate of 4.4 percent.

Much of that progress is the result of Amazons decision to open its first
headquarters downtown a decade ago. John Schoettler, who oversees real estate
for the online giant, thought it simplest and least expensive to plan a suburban
headquarters campus east of Lake Washington in Bellevue, Wash., near
Microsoft.

Bezos had a different idea. He wanted to stay in Seattle.

Jeff said the type of employees we want to hire and retain will want to live in an
urban environment. They are going to want to work, live and play in the urban
core, Schoettler said.

The decision helped usher in a new era, one in which top employers abandon
suburban office parks for lively, urban neighborhoods integrated into the cities
around them. Only seven Fortune 500 companies had research or engineering
hubs in Seattle in 2010; now 31 do.
[As companies relocate to big cities, suburban towns are left scrambling]
Their growth has just been so positive to lots of other companies, big and small
and medium and in between, said Jon Scholes, president and chief executive of
the Downtown Seattle Association, where Schoettler is a board member.
Its a boom that has shown little sign of slowing. Seattle added 57 people a day for
a year through the summer of 2016, according to census data. How best to
accommodate that growth provokes regular debate in Seattle and could well
shape whatever city Amazon comes to next.
Such details spark little discussion as mayors and governors from coast to coast
have embarked upon a sweepstakes fit for a reality show, touting their cities in
online videos and dangling taxpayer-funded subsidies of as much as $7 billion,
even if their jurisdictions dont have the workforce or transportation network
Amazon said it requires.
The company set Thursday as the deadline to receive proposals.

The view from the 29th floor at Amazon headquarters in Seattle. (David Ryder for
The Washington Post)
Tucson officials, with an airport one-tenth as busy as Seattles, mailed the
company a 21-foot cactus to get its attention. Stonecrest, Ga., with a population
barely larger than Amazons Seattle workforce, offered to de-annex 345 acres of
its land and rename it the City of Amazon. Kansas City, Mo., Mayor Sly
James purchased 1,000 items on Amazon and rated them all five stars.

New York Mayor Bill de Blasio announced plans to light up several landmarks and
venues in orange to show support for his citys bid.
Amazon proposed a second headquarters in the U.S. and these cities are hungry
for it. Amazon chief executive Jeffrey P. Bezos owns The Washington
Post. (Monica Akhtar/The Washington Post)

So will all the mayors go to compete on The Ellen DeGeneres Show, Kelly Ripa
or Anderson Cooper? asked Greg LeRoy, president of the policy group Good Jobs
First, which regularly warns that public incentives rarely pay off. Thats the
spectrum of the debate right now.
Before Amazon, a wasteland

Seattle won its economic beauty contest in 1962, when it hosted the Worlds Fair.
To serve the crowds, the city built acres of parking and low-slung motels in an
area known as South Lake Union.
The bet paid few dividends. Three decades later, the area was probably best
known for a printing plant, struggling motels and a Hooters restaurant. Only 677
people lived there in 1990.

Then Paul Allen, co-founder of Microsoft, launched a real estate firm called
Vulcan and bought 60 acres in the area. Vulcan executive Ada Healey recalls the
early skeptics. During a 2002 pitch meeting, she said, a representative from a
prospective company turned to her and asked: Why would I want to move to
South Lake Union? It is a wasteland.
Bezos, though, saw promise in the urban locale. He had started Amazon in his
garage in nearby Bellevue, then opened an early office in a former military
hospital now called Pacific Tower. Before long, he was searching for more space
to accommodate his fast-growing company.
[For Amazon, D.C. pitches four of its trendiest neighborhoods]

Schoettler initially secured about 1.7 million square feet in 10 buildings. It was
enough, he thought, to contain the company through 2016, when it was projected
to have 9,300 employees.

Instead, Amazon grew five times as fast. It now has more than 40,000 employees
in 33 Seattle buildings totaling 8.1 million square feet. It occupies 19 percent of
the high-end office space in the city, according to an analysis by the Seattle Times,
as many square feet as the citys next 40 biggest employers combined.

Next year, Amazon will complete its most prominent addition three glass
biospheres featuring about 40,000 plants, a unique environment for employees
to come and collaborate and innovate, Schoettler said.

A drawing of the Space Needle on a window at Amazon headquarters in Seattle.

(David Ryder for The Washington Post)
Seattle officials have raced to keep up, approving $480.5 million in improvements
over more than a decade for South Lake Union. Amazon and Vulcan, in need of
approval to take over city alleys for its development, chipped in funding.

A $190.5 million road-realignment program included $31.4 million from property

owners led by Vulcan. A new, 1.3-mile streetcar line cost $56.4 million and
benefited from $5.5 million from Amazon, including the donation of a fourth car.
Now the city has embarked on a $201.5 million electrical substation, work that
includes burying electrical wires.

On weekdays, South Lake Union teems with young workers sporting Amazon
name tags and eating bananas that the company offers free to passersby. Many
are walking their dogs 4,000 employee-owned pups are registered with
headquarters access, helping Seattle earn notoriety recently for having more dogs
than children.

The campus has produced spillover benefits for the city. Amazons buildings are
home to 34 restaurants, including a culinary job-training program called FareStart.
More than 20 percent of employees walk to work, and fewer than half drive.

The companys longtime support for lesbian, gay, bisexual and transgender rights
including a $2.5 million donation that Bezos and his wife, MacKenzie, made in
support of same-sex marriage dovetail with the citys progressive politics. In
June, the company flew a rainbow flag above its headquarters for LGBT Pride
Month. It has more than 40 GLAmazon chapters for LGBT affinity around the
world.

We could have gone to the suburbs, and we could have built a campus, and we
would have had an entry gate where everybody would come and go so you would
be very inward-looking and very exclusive, Schoettler said, as opposed to being
in a very urban environment where you have to look outward, so youre very
inclusive, and everyone is your neighbor and everyone is welcome.
The housing struggle
Maybe no city could have built housing fast enough to keep prices from spiraling
upward during Amazons growth, but Seattle despite nearly leading the
nation in new apartment construction hasnt come close.

On the sidewalks, alongside rentable neon bikes, people subsist in tents and
sleeping bags in places locals say they did not congregate at 10 years ago a
warning sign for cities nationwide trying to capture a version of Seattles glory.

We dont have enough housing for low-income people especially, but we also
just dont have enough housing, said Myers, a longtime Seattle housing
advocate. And Amazon obviously impacts both of those things.

Officials at Bellwether Housing, the citys largest nonprofit manager of affordable

housing, at 2,000 units, report a vacancy rate of 1 percent. Its very rare that
someone moves out, because they have nowhere else to go, said chief executive
Susan Boyd.

A state analysis of evictions found they were driven not by social problems but by
economics. As Amazons boom has continued, the city approved a rule this year
requiring landlords to accept the first viable renter who applies rather than
cherry-picking a tech worker. The government also adopted an inclusionary
zoning policy requiring developers to set aside some new units at below-market
rates or pay into a fund to develop other affordable units.

Myers suggested other jurisdictions pay heed: If youre going to get an Amazon
thats going to create a ton of high-paying jobs and a ton of pressure on the
housing market, what are the things you can do before rents really skyrocket?
[Tell us where Amazons second headquarters should go]

Ask 10 experts where the company will put its next headquarters, and you may
get 10 different answers. The company prides itself on zigging when others zag,
making it more difficult to read the tea leaves. Still, many in Seattle say the
company probably has a good idea of its options. I suspect they have a shortlist,
said Healey, the Vulcan executive.

Landing the second headquarters would be a legacy-defining achievement for

nearly any governor or mayor, but lessons from Seattles Amazon experience
have bidders scrambling to show how they can meet Amazons insistence on
speed, low costs, transportation and inclusion particularly if they didnt focus
on them ahead of time.

East Coast cities such as Boston, New York and Washington may need to answer
for their own runaway real estate and housing prices. Governors, including
Republicans Chris Christie of New Jersey, Scott Walker of Wisconsin and Larry
Hogan of Maryland, may have to explain why they canceled major transit
projects. Charlotte and Indianapolis are bidding, but Amazon may want to know
the effect of state laws there affecting the rights of gay or transgender
employees.

Amy Liu of the Brookings Institution said the Amazon competition will hopefully
serve as a chance for elected leaders to take the temperature of how prepared
their neighborhoods and infrastructure are to drive growth, whether from
Amazon or elsewhere.

These are things every city should be doing anyway, she said.
Posted by Thavam