Big numbers, fast growth at Amazon turn Seattle into a company town

SEATTLE - Amazon.com's extraordinary growth has turned Seattle into the biggest company town in the United States.

Amazon now occupies 19 percent of all prime office space in the city, the most for any employer in a major U.S. city, according to an analysis conducted for the Seattle Times.

Amazon's presence in Seattle is more than twice as large as any other company in any other big U.S. city, and the e-commerce giant's expansion here is just getting started.

The swarms of young workers crowding into South Lake Union every morning represent an urban campus that is unparalleled in the United States — and they have helped transform Seattle, for better or worse. Amazon's rapid rise has fueled an economy that has driven up wages and lowered unemployment, but also produced clogged traffic on the roads and sky-high housing prices.

And while Seattle's booming economy is often attributed to a wide variety of factors, increasingly, it's all about one company. Amazon now occupies more office space than the next 40 biggest employers in the city combined.

And that's only the beginning: Amazon's 8.1 million square feet in Seattle is expected to soar to more than 12 million square feet within five years.

The company's unparalleled impact in determining Seattle's fortunes may give some pause to those who experienced the downturn of the 1970s, when the shine of "Jet City" was tarnished as Boeing cut about two-thirds of its huge local workforce.

However, unlike Boeing, whose local operations focus on the single business of building airplanes, Amazon runs a vast web of mutually reinforcing but diverse businesses — selling computing power, retailing nearly everything, publishing books and producing films, among other things.

John Schoettler, Amazon's director of real estate, said that all he's experienced in his nearly two decades at Amazon is "steady, continued growth," the result of the company's zealous focus on satisfying customers.

The legacy of what so far amounts to $4 billion spent by the company on real estate here will be long-lasting, he said: "These buildings will stand for hundreds of years."

For this story, the real estate data firm CoStar provided a list of all office tenants in the nation's 20 biggest cities by population, looking at only Class A offices, the modern buildings used by the vast majority of major employers.

While other company campuses may be larger and more dominant in some suburbs — Microsoft in Redmond, Wash., or Apple, Google and Facebook in Silicon Valley — in big cities, corporate tenancy is generally fragmented. In most big cities, the top employer has less than 5 percent of local office space.

In Seattle, Amazon is in a league of its own. Its presence is nearly 20 times greater than that of the next-biggest employer.

Amazon got its start in a Bellevue, Wash., garage in 1994, and it first grew without much of a plan — its employees were scattered in various downtown Seattle buildings and in the former Pacific Medical Center building on Beacon Hill. When Schoettler, the Amazon real estate executive, joined the company in 2001, it had 630,000 square feet in Seattle.

In 2005, Schoettler said, he told CEO Jeff Bezos that the company needed a plan, and Bezos agreed. His only condition was that Amazon stay in downtown Seattle, Schoettler said.

That coincided with the reversal of a decades-long outflow from U.S. cities to their suburbs: By staying in the urban core, Amazon would attract members of the hip creative class.

"It was a very conscious decision we made," Schoettler said.

Allen had paid for 11.5 acres he intended to donate to an urban park project called the Seattle Commons. But when voters turned it down — twice, most recently in 1996 — the land went to Allen. His Vulcan development company then gobbled up more land in the neighborhood over the following decade, giving it about 60 acres.

Amazon's first request was for about 2 million square feet, to be delivered in 2010. That initial expansion, Schoettler said at a real estate conference, "was supposed to last us through 2016."

As it turned out, by then the company would have three times as much.

That's because its Seattle payroll was growing even faster than expected. The company now employs about 40,000 employees in Seattle, up from 5,000 in 2010.

Now it is by far the largest employer in the city. Under Amazon's current plans, there will be room in Seattle for more than 55,000 Amazonians at the beginning of next decade.

Altogether, Amazon occupies or plans to be in about three dozen office buildings in Seattle. And over the past decade, South Lake Union has had $668 million in infrastructure improvements.

Amazon has become the go-to scapegoat for people complaining about Seattle's problems associated with growth, like housing prices and clogged streets. And while it's certainly not the only reason Seattle is bursting at the seams, Amazon makes up a disproportionate share of the city's rapid growth.