December 8, 2022

Self-inflicted wounds make Seattle’s business losses worse

I’ll never forget the neon.

To be sure, it wasn’t the only dazzling thing about arriving here in the late summer of 2007.

This region had one of the most diverse economies in America, from tech to Boeing and deep-water ports. And it was only getting started — especially downtown.

That first summer, especially, I noticed how happy people seemed walking around the central city. The sense of pleasure was heightened by the Duck tours, passengers singing, years before poor maintenance caused a fatal crash.

Unlike so many American cities that lost their downtown retail and major corporate headquarters to suburbanization, Seattle didn’t. Retaining a strong core required repeated infusions of new capital, ideas and commitment. Most Seattleites loved their downtown and never gave up on it.

As a result, and despite the Great Recession’s grim reaper claiming a key employer, Washington Mutual, downtown was in amazing shape. And it was poised to get better with light rail, Amazon’s growing footprint and the arrival of other tech companies.

It boasted two major department stores, chain and local retail, Benaroya Hall, the Central Library, the Cinerama and the Seattle Art Museum. It was an architectural feast and very walkable. It was authentic. It was cool.

This placed Seattle ideally to take advantage of the “back to the city” movement, where millennials and empty-nest boomers flocked to good city cores — and corporate headquarters followed. For example, Weyerhaeuser relocated to Pioneer Square from Federal Way. And Amazon moved to the core and grew mightily to more than 50,000 well-paid jobs.

But downtown’s bloodstream was small business, much of it locally owned. We had two piano stores, two men’s hat stores, clothiers, shoe shops, art galleries, bakeries, luggage, office supplies, appliance repair, concert venues and restaurants ranging from easy eats to world famous.

And so many were graced with neon signs, a rarity in sterile modern American cities. They made the night magical and romantic.

All gone now — or too much of it.

My colleague Paul Roberts reports that since March, 126 street-level downtown business locations have closed. This data come from the Downtown Seattle Association. Other neighborhoods are no doubt suffering, too.

The pandemic and the ensuing loss of office workers is a big cause, but it’s not the only one.

Most frustrating and heartbreaking are the self-inflicted wounds.

Shops were looted, in some cases repeatedly, this past summer. It sullies the cause of social justice protests to link the two together. The looting was pure criminality.

The city’s lack of prosecution for most shoplifting is another big DIY problem. It played heavily into Macy’s decision to close before COVID-19 and is extremely costly for small retailers. Fear of street crime also helped kill the Kress IGA, my neighborhood supermarket. The chronic unsheltered, drug dealers and the mentally ill keep customers away and worry employees.

The loss of Bergman Luggage (and its big neon sign) is especially telling. Owner Hardial Gill said the downtown location had been profitable and the landlord accommodating during the pandemic. But the store faced repeated burglaries, tents on the sidewalk and finally looting.

“My guys are scared to go down there,” Gill said. His three other locations are doing well.

The pandemic effects on small business — which employs nearly half of all American workers — aren’t restricted to Seattle. Nationally, the online reviewer Yelp says nearly 100,000 small businesses that were open in March had closed permanently by September. Federal help was limited and hurt by widespread fraud.

Pre-COVID, downtown was tallying losses. Some outfits, such as the piano stores, City Kitchens, Borders and a fly fishing shop, didn’t make it out of the Great Recession. The pleasant upscale Ralph’s Grocery and Deli, a neighborhood fixture for more than three decades (open until 2 a.m.), closed in 2015 when owner Joe Cohen retired.

Office Depot closed on Fourth Avenue and Barnes and Noble was among the losses at Pacific Place, mostly casualties of e-commerce but also shoplifting. Yes, these were chains but they drew customers downtown who also spent money at nearby local stores and collected city taxes. And this was during the go-go years as Seattle ascended to become a superstar city.

Third Avenue is increasingly empty of retail. Along with Kress and Macy’s, Aaron Brothers, Bergman Luggage, Xanadu comics, Bed, Bath and Beyond, Payless Shoes, Columbia Sportswear and TJ Maxx are empty.

This past year Bartell Drugs closed at Third and Union, citing “the cost of broken and stolen items, armed security guards and regulations on businesses imposed by the city of Seattle (which) made the store unprofitable.”

Downtown had its share of crime in the good times. Nightclub shootings — including at the appropriately named Venom — were a big deal in 2007. Our condo at the border of Belltown and downtown proper faces Third Avenue, and I frequently interact with the street population. As a city guy, I’m a fan of Seattle Fire’s Realtime 911 site. I routinely passed the open-air drug market at Third and Pine.

Still, until lately, I felt comfortable. Now the sidewalks are emptier and certain categories of crime are rising, challenging Seattle’s recent history as an unusually safe city.

I remember being able to sit at Westlake Park at 11 p.m., waiting for a bus under the enchanting metropolitan night. Never being accosted by an aggressive panhandler or screaming souls off their meds. I wouldn’t do it today.

The new crime problem affecting citizens and hurting small businesses doesn’t have complex sociological roots. It’s because of City Hall. In addition to lax prosecution, especially of a core of repeat offenders, the mayor and City Council are to blame.

Mayor Jenny Durkin appears uncomfortable interacting with the business community and has lost power to an assertive council. That body is obsessed with defunding the police without a viable Plan B. Its membership is stuffed with career activists and pols, with thin business experience at best.

No wonder the council is hostile to business. Even the smallest shop is exploitative capitalism. The council’s loudest voices are running a “revolution.”

Only in a city made so prosperous by hated capitalism could this intellectual Ponzi scheme be tolerated or seem without consequences.

One of the things that most struck me about Seattle, its defining trait, was a genius for continuing reinvention. This was embodied by people such as Paul Allen and Bill Gates Sr., now both gone, and a host of civic stewards. Mostly business leaders, they were indispensable.

I don’t know if we’re minting new ones, or people such as grocer Joe Cohen. Today’s trust-fund millennial or rich software coder likely has no interest in running a bookshop or deli. Historically businesses come and go.

Replacements might not come after COVID, especially in a town where City Hall seems to think a robust, diverse economy grows magically on activist trees.

Now we’re facing an extinction-level event for small business: A gut-check for that genius for reinvention.

The neon is going out and we may not see it re-lit in our lifetimes.

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