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Brian Miller
Real Estate Editor

February 20, 2020

On the Block: The state of downtown is fabulous, except for those inconvenient rush-hour gunfights

No news was made during last week's Downtown Seattle Association gathering and economic report at the Hyatt Regency. Instead, news was discussed.

Mayor Jenny Durkan and the DSA's Jon Scholes both dwelled at length on the horrific, fatal Third and Pine shooting last month — as they should. The assembled lunchtime throng duly applauded each time that “open-air drug market” was condemned and the police were praised.

As is evident to passersby at that long-troubled intersection (“the lobby to our city,” per Scholes), the police presence is way up. I've noticed, too, that Amazon has hired its own private security guards, with guns, at its 300 Pine building on the next block (aka BlueShift, aka the nearly former Macy's building). That's on Amazon's dime, of course. (The company was also a title sponsor for the DSA luncheon.)

Photo by Brian Miller [enlarge]
Over the past three years, crime is up 30% in the quadrant of downtown that includes Third and Pine, according to the DSA’s Jon Scholes.

Durkan didn't announce any new funding or policing initiatives; and Scholes said the DSA and its private partners would have to step up. But Third and Pine is a very different beast from the DSA's commendable efforts to clean up and activate Westlake Park and Occidental Park.

Clearly, in Seattle's long-boom, very tight downtown office market, there's money sloshing around that might otherwise be spent on tenant amenities. (Would you like more Nespresso machines, more beanbag-chair-filled lounges, more doggy treat bowls, more yoga studios and bike parking?) The DSA could dig deeper into members' pockets, or the city could raise some new dedicated tax.

But the paradox to the DSA's rosy economic forecast, dubbed “Delivering on the New Decade,” is that while downtown is booming, no one has a concrete — much less funded — notion of how to address its yawning inequality and lingering pockets of violence/misery.

First the good news, some selected stats from the DSA: About 4.5 million square feet of office space was delivered last year. Over the past decade: 17.5 million square feet (a 34% increase). And about 7.8 million square feet was under construction at the middle of last year. (About 4.5 million is expected to deliver by 2021.) Downtown Seattle's office absorption rate is second only to Phoenix.

Jobs are up 52% over the past decade, with 112,000 new jobs to reach about 328,000 downtown. (The DSA doesn't project forward, and 5.2% annual growth, meaning 10,000-plus jobs per annum, may not be sustainable; still, it seems to be the new normal.)

The decade-long apartment boom has grown downtown's population by 42% to around 88,000 residents. The DSA estimates that 12,000 more will join them by 2024. About 3,263 downtown units were created last year, about 27,000 over the past decade, with nearly 10,000 more expected by 2021.

Planners often use the ideal metric of 1.5 jobs per housing unit. So, 10,000 new jobs per year requires about 7,500 apartments per year — not all them downtown, of course.

Hotels we'll leave for another day.

Then, back at Third and Pine, the bad news. Over the past three years, crime is up 30% in that quadrant of downtown, according to Scholes. His colleague Marilyn Boss cited the grim combination of homelessness, untreated mental illness and addiction, and crime.

You can't blame the lack of eyes on Third and Pine. Durkan says that 50,000 daily commuters pass by that corner each day. As Scholes says, it's a lobby — a public place, a transit hub, not someplace you want to linger.

Who actually owns the corner? The Gilmore is a condo, with affordable housing on top of the McDonald's and MoneyTree. California investors own the retail; and the Church of Scientology owns its storefront space next to the transit tunnel entrance.

Next door, the locally owned Gibraltar Tower has offices on top of shops vending cigars, beer, sundries and cellphones. The tenant mix is, to put it politely, sketchy. Should we blame the landlords for blight? But replace those tenants with a Starbucks, and would things be any different? Look south to the green mermaid Third and Pike, and I'd say no. Third has a culture and tradition of its own — like Skid Row or the Bowery.

Boss blamed “the failings of the criminal justice system that keeps repeat offenders on the streets.” Well, maybe. But crime is only part of the cocktail.

Up from San Francisco, keynote speaker Alicia John-Baptiste, an urban planning expert, compared our two blue prosperity/inequality bubbles with familiar observations and bromides. But there were no hard proposals.

The polite DSA gathering was not a Bernie Sanders rally, and there were no calls for a revolution. The closest John-Baptiste got to an incendiary slogan was “social inclusion,” which hardly lights the firebrands or sharpens the pitchforks.

To end nightmare commute times, to get homeless folks sheltered and the mentally ill treated, to create more housing — at all price points — she said, “This is a structural problem, and it requires structural reform.”

Fine, but what might that look like? We can only guess:

Structural reform means new laws, higher taxes, upzoning for more density, no parking requirements, minimal to zero design reviews, and/or waived SEPA reviews in already-built urban areas.

Structural reform means no more landmarking of dubious-but-familiar character buildings near transit hubs. (See the Capitol Crest Apartments, aka the Annapurna Cafe building on Capitol Hill, where a 50-unit, six-story redevelopment plan was recently thwarted by the landmarks board.)

Structural reform means that emergency shelters and permanent housing for the homeless would have to be exempt from public process and citizen lawsuits — so they could be built in any neighborhood.

Structural reform means federal spending on housing and infrastructure — unlikely in the current political climate. Structural reform means congestion pricing for single-car drivers, higher gas taxes to support transit and Tim Eyman's overdue retirement to the Sun Belt.

Structural reform, so far as the DSA is concerned, also means creating new land.

“One of the big threats is that we're just running out of space,” said Scholes of potential office sites — but the same is true for multifamily builders. Bellevue simply has more undeveloped or under-developed land. And it'll soon be linked to Seattle's downtown core by light rail. We can't compete with that, and that's why Amazon is expanding in Bellevue, not here. SLU is virtually built out, and certainly gridlocked unless you live within walking distance.

While there was a DSA panel last week on lidding Interstate 5 to gain 18 acres (mostly for needed parkland), the only way to create the space that Scholes and others want is via big zoning changes — single family to multifamily, mid-rise to high-rise, industrial to office and residential.

And that coming battle between competing interests will make Third and Pine seem tame and peaceful by comparison.

Got a tip? Contact DJC real estate editor Brian Miller at brian.miller@djc.com or call him at (206) 219-6517.

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