How Seattle grew itself a new 'downtown'

Seattle's CBD is increasing spelled SLU. Here's an account of the remarkable, somewhat accidental rise of a hot commercial and residential zone called South Lake Union.

Crosscut archive image.

A rendering of the new Gates Foundation headquarters on Fifth Avenue North across from Seattle Center.

Seattle's CBD is increasing spelled SLU. Here's an account of the remarkable, somewhat accidental rise of a hot commercial and residential zone called South Lake Union.

One of the recurrent trends in Seattle history is the way its downtown business district keeps migrating northward. This leapfrogging has happened three times now, the most recent being the creation of a whole new downtown at South Lake Union. As Danny Westneat notes in a column in The Seattle Times, this spectacular success story has been little noted or celebrated. Maybe that's because we're not sure we like what we got?

Short history. Downtown began as Pioneer Square, which had drainage problems and got built out in the early 1890s with buildings that were pretty stubby. Next stop: Second Avenue around Columbia, where we built a financial district in boom period before World War I. Then came the big leapfrog by the department stores, led by Frederick & Nelson in 1918, looking for cheaper land to expand their offerings, and so our downtown crossroads became Fourth and Pine.

The new hot zone is South Lake Union, with iconic companies and their campuses such as the Hutch, Amazon, a whole research complex of the University of Washington, and the Gates Foundation.

Three factors made this happen, though I'm not sure we knew what we were doing. The first was the 1989 initiative (called CAP, for citizens' alternative plan) to cap the height of tall office buildings in the heart of the central business district. People like former City Councilmember Peter Steinbrueck were wary of dark, windy canyons, and those who had built the new towers were desirous of protecting their views and high lease rates. So the cap was installed and the safety valve of much higher buildings to the northeast, the Denny Triangle, was given as compensation. Up went the new buildings, mostly condos, in that northerly direction.

The second factor was the Seattle Commons proposal in 1995 for a 61-acre park south of Lake Union, as a magnet for upscale residences and commercial development. The public rejected the plans (twice), but the high-profile battles put the region into play, though the Fred Hutchison Cancer Research Center and REI had already discovered it. The Commons battles also brought Microsoft co-founder Paul Allen into the game. Allen had given the Commons $20 million to be able to buy key properties before land values zoomed upward, and the land thus purchased reverted to him when the voters nixed the Commons. Suddenly we had an inadvertent developer named Vulcan, loaded with cash and ideas, on the scene.

The third factor, less publicized, was the desire of the University of Washington to develop a kind of research campus and technology incubator along the lines of the Stanford Research Park. South Lake Union, with the Hutch already there and fairly easy to get to from the UW, became the place, with the initial focus on biomedical companies. That gave Vulcan a big, well-heeled tenant, and up went more buildings.

Mayor Greg Nickels, who had studied at the UW, was an eager partner, probably more to help UW and the technology transfers it was stimulating than to help Vulcan. A kind of deal was worked out, or stumbled upon, where Vulcan was the lightning rod for criticism while the UW moved quietly into the neighborhood.

Nickels also accelerated the rise of SLU by refusing to allow such new-economy development in two other competing areas, Interbay (between Queen Anne and Magnolia) and SoDo (south of Downtown and the stadiums). Previously, Mayor Paul Schell had cleared out the traffic patterns around the defunct Bay Freeway, helping rationalizs the scattered Vulcan holdings and prepare the way for Lake Union Park.

Eventually all these forces, along with the real estate bubble of 2002-08, combined into a kind of chain reaction. Amazon committed to the area, as did the Gates Foundation. Vulcan found its stride and was dominant enough to provide a kind of master plan for the area. You know you have a new hot zone when Tom Douglas begins opening new restaurants every block!

It all adds up to an impressive story of urban densification. Here's a summary from a recent report by Mike Mann on the area:

Between 2004 and 2010, the real estate development activities in Seattle’s South Lake Union neighborhood have exceeded the projections incorporated in Paul Sommers’ 'The Potential Economic and Fiscal Impacts of South Lake Union Development' report. Since 2004, the assessed value of newly constructed building exceeds $1.1 billion. In this time frame, the neighborhood has attracted over 13,000 permanent jobs, achieving over 72% of the City’s 2024 Comprehensive Plan goal for the South Lake Union Urban Center.  This magnitude of construction and economic activity has resulted in an average of $5 million per year in additional tax revenues to the City of Seattle.

There are problems, not surprisingly. Traffic congestion is likely to be the main one, since the area badly lacks east-west corridors. One partial solution, two-way Mercer, is locked in controversy; another, more crossings over the Aurora gulch, depends on there being money from the deep-bore tunnel project. Another problem is the relentless seeking of high rents and the costs of all the new buildings, pushing out more characterful uses and jeopardizing the incubation aspects of the area. (Startups need low rent.) A third tradeoff is a kind of hollowing out of the old downtown, as new companies locate north and funky startups head for Pioneer Square and Fremont. Downtown is for lawyers and tourists.

Still, what city wouldn't want to have this kind of smart urban densification? Who wouldn't want the parade of the world's leaders to the Gates Foundation and nearby hotels and watering holes? What could possibly be wrong with concentrating brains and technologies in a fairly coherent neighborhood?

There's an echo of this story of leapfrogging downtowns taking place on the Eastside. Bellevue has built up an impressive 20-block downtown, with major mall, handsome park, hotels, Microsoft-filled office towers, condos, and commercial spaces. But there is pressure to build a Greater Bellevue by leaping over I-405 and building transit-oriented projects along the Sound Transit route in the Bel-Red corridor leading to Microsoft.

Some, like Bellevue Square developer Kemper Freeman, argue for concentration and build-out of the core. His allies on the city council, fiscal conservatives wary of spending tax money on infrastructure for the expanded downtown, agree. Others, including Microsoft and developer Wright Runstad, push for an expanded Bellevue, in part to capture some of the businesses that South Lake Union is nabbing and to house such big-city features as an arena for major league hockey and basketball teams. The fight over Sound Transit's coming to the Eastside, which Freeman-backed I-1125 would jeopardize, is a proxy battle in this bigger war.

It's an intriguing debate. Curiously, such a debate does not seem to have been waged in Seattle, where leapfrogging comes naturally. Nor is it a debate, I think, that the CBD compacters can really win. The market forces for leapfrogging out to cheaper land and then upzoning it to a new, highly valued node of activity are normally too strong for politicians, planners, or "downtown establishments" to stymie. I suspect this pattern is also one of the reasons that Seattle has been able to continue growing and generating jobs and taxes and world-beating companies.


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