Amazon Takes Over: How a Flood of People Could Remake Seattle

5/9/12Follow @curtwoodward

In Seattle, the future is pretty easy to find. Just head to Amazon.com’s neighborhood.

Just a few years ago, this corner of the city was dominated by warehouses and cheap rentals. It was a mostly forgotten area, infamous for the rush-hour traffic that piled up as drivers fled to the freeway.

Today, the place is alive. The blocks are packed with fresh new offices, condos, and bustling businesses. Food and drink are plentiful. People are everywhere.

There’s more on the way. In a dramatic expansion that could take nearly a decade, Amazon is buying three city blocks just a few minutes away from its current headquarters, where it wants to build three office towers of about 1 million square feet.

A few years from now, if those plans are realized, you’ll be able to stand on the edge of Amazon’s current campus in South Lake Union and look toward downtown as construction cranes remake the skyline. Block by block, Amazon is eating Seattle.

But the shiny new buildings aren’t really the story. If you want to see the true revolution that’s coming, look at the people filling up those offices: thousands of smart, skilled information workers, imported by one of the most ambitious forces of the digital age.

These people have a chance to remake the face of Seattle. Ten years from now, when you mention Seattle to an outsider, the corporate nameplate that springs to mind might not be Starbucks or Boeing or even Microsoft. If Amazon can sustain its growth, there’s a good chance this could become Amazon’s town.

“I don’t think you’ll recognize the two Seattles—one before Amazon was here, and one after,” local entrepreneur Bryan Trussel says. “They couldn’t help but affect the culture of the city.”

The 10th of Amazon.com's new headquarters buildings in Seattle.

THE NUMBERS

The funny thing about the most vital company in Seattle today is that nobody seems to know how many people actually work there. Amazon itself doesn’t say how many of its workers are at headquarters, part of an infamously secretive culture that refuses to give any more glimpses at the company’s workings than legally necessary. (The company declined to comment for this story before I even posed a real question.)

When I asked enterpriseSeattle, a local economic development group, to research Seattle employers with more than 4,000 people last year, Amazon didn’t even show up on the list—probably because it’s grown so fast that data providers haven’t been able to keep up.

But it’s possible to guess, and the most commonly used formula is estimating how many people could fit into Amazon’s current offices. Commercial real estate brokers say Amazon already occupies about 1.95 million square feet of space in Seattle. An industry rule of thumb holds that corporate offices can fit one worker for every 200 square feet of space (although tech companies are known to pack people in tighter than average).

That means you could probably peg Amazon’s Seattle workforce at around 10,000 people—a figure that would already make it the largest private employer in town, ahead of the 8,000 at Boeing’s military airplanes division, according to enterpriseSeattle’s research. “I think they’re the largest private employer in downtown Seattle that I can remember in my business career,” says local developer Matt Griffin.

Amazon is known to have leases on another 600,000 square feet of space, including the fifth and final phase of its 10-building headquarters campus, which is still under construction. But that’s just the beginning. [Updated to correct headquarters campus is five phases, 10 buildings.]

It’s Amazon’s striking plan for three new office towers on the edge of downtown Seattle that will truly supercharge its presence here. Once full, they will more than double Amazon’s current estimated workforce. At a recent Seattle City Council meeting, Amazon global real estate director John Schoettler gave the most detailed disclosure yet about how many workers Amazon is bringing into the city.

“Each building could hold approximately 4,000 employees. So we could say 12,000,” he said. “That’s a lot of jobs.”

That’s on top of the massive footprint that Amazon already has around South Lake Union, most of it through Microsoft co-founder Paul Allen’s Vulcan Real Estate.

“We’ve exceeded our growth projections. When we initially signed the leases with Vulcan to develop the South Lake Union project, it was supposed to last us through 2015-2016,” Schoettler said. “That was for 1.7 million square feet. We’ve added an additional million square feet to that. And now this would be an additional 3.2 million.”

That means Amazon could be on a path to have more than 20,000 workers in Seattle—a fairly staggering number of people working for one company in this city of about 600,000 residents. Should Amazon reach that size, it would be an institution around the same size as the University of Washington, which currently employs about 25,000 people in Seattle.

And just as important as the numbers are the kinds of people that Amazon is attracting: innovative, technically skilled, business-savvy knowledge workers from around the world. They’re the kind of people who will be prized in an economy increasingly driven by technological disruption.

Dan Bertolet, a Seattle-based urban planner who also analyzes development and density at Citytank, wrote recently that Amazon’s expansion is an example of how “Seattle’s exceptional combination of intellectual, economic and natural capital is propelling the city into a dynamic future.”

“And it’s also an investment in the right place—a walkable, transit-rich urban center, as opposed to the car-dependent burbs where Microsoft set up shop in their early years,” Bertolet said. “Furthermore, all those new jobs will draw more people to Seattle, and most of those people will want nearby places to live, fueling a virtuous cycle of densification.”

“It’s also bringing in a lot more intellectual capital to the Northwest,” says Griffin, the Seattle developer. “It’s the intellectual capital and horsepower that helps us to generate new jobs and new ideas.”

CITY VS. SUBURBS

Microsoft, which employs some 40,000 people throughout the broader region, sits just a few miles away from Seattle in suburban Redmond. The distance, however, is deceptively significant—the two cities are separated by a large lake—and has meant that Microsoft’s talent, wealth, and alumni are spread out and often disconnected from Seattle itself.

Trussel, the CEO of smartphone-app startup Glympse, has seen this dynamic up close.

He started at Microsoft in 1991, when the software company was still housed in a few one- and two-story buildings that the company leased “over in the woods in Redmond.”

Now, Microsoft boasts a sprawling complex tucked between the housing developments and shopping malls. Its presence has remade the suburbs on the eastern side of Lake Washington into an area of relative prosperity. Expedia, the online travel giant that spun out of Microsoft, has its corporate headquarters in nearby Bellevue, and one of the region’s top venture firms, Ignition Partners, is nearby. To this day, startups founded by former Microsofties still spring up around the Eastside.

That’s where Glympse started. The company makes a location-sharing app for smartphones that lets users show other people where they are at any given moment—sort of a self-tracking device that, for instance, lets your kids know how far away you are if you’re late to pick them up.

The company began with five employees, all working in a humble office in Redmond. They were literally minutes from their homes, and had no thoughts of relocating.

Then, Trussel says, he took on some venture cash to help Glympse grow. Board member Michelle Goldberg, a VC from Ignition Partners, said she presumed the group would be moving to Seattle for its next phase of growth.

“And I said, ‘No. Why would I move to Seattle? We’re all in Redmond, and we’re all close, and we don’t waste any time driving,’” Trussel recalls with a laugh. “And she gets a really serious look and says, ‘Bryan, if you’re going to build a consumer company in software, you need to be in Seattle.’”

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Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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