GSBA President & CEO Louise Chernin interviewed for Washington Post article about Amazon

by Robert McCartney | Apr 16, 2019
By Robert McCartney /Washington Post
Posted Apr 14, 2019 at 2:01 AM

Amazon’s rise in Seattle has earned it a mixed reputation as both a progressive-minded, economic godsend for the city and a self-centered behemoth.

SEATTLE — On an upper floor of Amazon’s Day 1 tower, foosball tables and beanbag games dot the shared spaces filled with mostly young employees and, occasionally, their dogs. Looking through tinted windows to downtown streets below, the workers can see five new Amazon buildings under construction in the three city blocks immediately around them.

The new buildings — four towers and a low-rise — will house some of the 9,000 new employees the company plans to hire in the near future. They will add another layer to the explosive growth that has made Amazon Seattle’s largest private employer in less than a decade.

Two miles to the east, in the historically African American Central District, the impact of Amazon’s rapid expansion is visible. A chain-link fence surrounds Earl’s Cuts and Styles, signaling that the neighborhood landmark is slated for demolition.

In its place will rise an upscale apartment building, similar to two across the street that cater to tech workers and other professionals who have been supplanting middle- and working-class black residents. Seattle’s tech boom accelerated the change, and African Americans now make up about 15 percent of the Central District’s population, down from 21 percent when Amazon arrived in 2010.

Amazon’s rise in Seattle has earned it a mixed reputation as both a progressive-minded, economic godsend for the city and a self-centered behemoth contributing too little to address the disruption it helped create, analysts say.

The online retail giant has created 45,000 jobs here, a welcome investment in this city of 725,000 people. Seattle was losing jobs to the suburbs before the Amazon buildup began and had just suffered the collapse of Washington Mutual in 2008.

The city also has at times feared that Boeing, a predecessor as its top employer, would cut operations or depart altogether. Old-timers still shudder to recall the “Boeing bust” in the 1970s, when a billboard was erected that said, “Will the last person leaving Seattle turn off the lights.”

But Amazon also draws much of the blame for pushing up housing costs and homelessness, aggravating traffic and even diluting Seattle’s identity as a quirky, laid-back city. Its contradictory record offers a guide to what northern Virginia and the Washington region can expect as the company builds a headquarters facility in Arlington, Virginia, bringing with it at least 25,000 jobs.

Seattle has “a sort of schizophrenic feeling about this hometown company,” City Council member Lisa Herbold said. “A lot of people believe that all growth is inherently good and don’t question what model of growth is good for cities that are already high-cost. . . . There are [other] people who have a lot of concerns.”

“It’s a bittersweet feeling,” said Lancaster, 51. “A lot of businesses that were here, they can’t afford to stay around anymore.”

Criticism of the company came to a head last year when it played a prominent role in a business coalition that successfully blocked a City Council effort to impose what came to be called the “Amazon tax,” a levy on large employers that would have been used to fund efforts to fight homelessness.

Asked to respond to critics in the Central District, a senior Amazon executive said no one set out to gentrify the neighborhood.

“I don’t think it was ever anyone’s intention . . . to displace anyone,” said John Schoettler, vice president of global real estate for Amazon. “It comes down to basic economics, and supply and demand. . . . We don’t have enough supply for the demand of housing.”

Amazon’s efforts to be a forward-thinking corporate citizen have attracted support. It prides itself on being innovative; the Day 1 building is named for a company slogan, “It’s Always Day 1.”

The company has won applause for its urban “placemaking,” or locating its dozens of buildings in downtown neighborhoods rather than isolated suburban campuses. Its buildings have dining facilities capable of holding only a third of the employees at each facility, to encourage workers to venture out and patronize neighborhood establishments.

“They brought fun, attractive restaurants into that area,” said Louise Chernin, president and chief executive of the Greater Seattle Business Association.

“You want to be angry at the big company because they’ve come in and disrupted things, but they’ve also created 45,000 jobs,” Chernin said. “The [Amazon] people who moved here shop. They eat out a lot.”

Amazon has actively promoted the use of public transit, such as by paying the full cost of its employees’ fare cards for light rail, buses and ferries — a perk that it is considering extending to new employees in Arlington. The company boasts that only a quarter of its Seattle employees commute to work by driving solo. Nearly 1 in 3 use transit, and more than 1 in 5 walk.

Accused of being stingy in its philanthropy, Amazon has made contributions to causes such as fighting family homelessness and supporting public schools.

After the city declared a state of emergency over homelessness in 2015, Amazon donated a former motel that it owned to Mary’s Place, which provides shelters for homeless families. In one of Amazon’s new buildings being erected downtown, Mary’s Place will have the bottom eight floors, providing room for 250 to 300 beds.

Last fall, Amazon surprised the Alliance for Education, a foundation that raises money for the city’s public schools, with a $2 million donation to create a “Right Now Needs Fund.” The fund gives principals up to $25,000 to provide students immediate assistance for items ranging from a coat or eyeglasses to food and medical care.

Schoettler, the Amazon executive, acknowledged the company had become more open about its efforts.

Such individual initiatives by Amazon in Seattle, though welcome, seem modest compared with the company’s momentous impact on the city’s overall economy and social structure, analysts say.

The arrival of tens of thousands of well-paid workers — earning what residents call “tech money,” or average total compensation of more than $150,000 a year for Amazon employees — has sent rents and housing prices soaring. The effect has been compounded as other tech giants — including Google, Expedia and Facebook — have expanded operations here to tap the tech talent attracted by Amazon.

Tim Thomas, a sociologist and demographer at the University of Washington who has studied Amazon’s impact, said a tipping point occurred in 2012, two years after Amazon moved into the South Lake Union area.

“There were a lot of areas that saw a massive injection of wealthy people,” Thomas said. “Rents went up. We also saw a spike in evictions. Affordable housing started to decline.”

Between 2013 and 2017, average rent for a one-bedroom apartment in the Seattle metro area rose 67 percent, from $913 a month to $1,528, according to the National Low Income Housing Coalition.

The effect has been felt even far from the company’s downtown towers. In two years, Chris Adam, a 28-year-old welder, has seen rent for his 500-square-foot studio apartment in south Seattle jump to $750 a month from $500. He said he has been threatened with eviction five times for late rent but has always managed to scrape together enough to avoid being thrown out. He does not blame tech companies for their success but wishes they would contribute more to helping folks like him.

“I can’t say I hold a grudge against Amazon or Google specifically,” said Adam, who earned less than $40,000 last year. But he added, “If you make a lot of money in this society, you should chip in.”