STATE OF DOWNTOWN Economic Report / 2021

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STATE OF DOWNTOWN Economic Report / 2021
STATE OF
DOWNTOWN
   Economic Report / 2021
STATE OF DOWNTOWN Economic Report / 2021
TABLE OF CONTENTS

            03     Welcome Messages

            05     Downtown Seattle
                   2020 Report Card

            08     Economic Competitiveness   Economic Report Sponsor

             25    Transportation & Access

             32    Urban Experience

                                                                  Credit: Andrew Jacob Media

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                    TABLE OF CONTENTS                    /   01
STATE OF DOWNTOWN Economic Report / 2021
STATE OF DOWNTOWN 2021 ECONOMIC REPORT   ADVERTISEMENT   /   02
STATE OF DOWNTOWN Economic Report / 2021
A ME SSAGE FROM OUR PRE SIDENT & CEO

            Just a year ago, downtown Seattle was                That Seattle spirit is already at work.
            firing on all cylinders. We ended the prior          Many restaurants, retailers and nonprofits
            decade with record growth, outperforming             have creatively shifted their business
            almost every major city in the country on            models during the past year. In the first
            development, job and population growth.              week of 2021, there were roughly a dozen
                                                                 announcements of new business openings
            Since the onset of the pandemic, we’ve seen
                                                                 downtown and approximately 90 new business
            dozens of downtown businesses permanently
                                                                 announcements in 2020.
            close, and our arts, entertainment, tourism
            and hospitality sectors devastated. Indeed,          As we recover, we’re committed to
            downtowns across the world and the country           embracing a new vision for the center of
            have a unique and daunting set of challenges         our city, where everyone feels that they
            as we emerge from this historic event.               belong and everyone has an opportunity to
                                                                 participate and share in the prosperity. The
            The recovery of our downtown is critical to
                                                                 downtowns that rebuild in this way will be
            the economic future of our entire city; to
                                                                 more dynamic, desirable and resilient.
            our robust tax base and quality of life; to
            our ability to invest in infrastructure; and to      Whether you’re a longtime DSA member,
            provide opportunity for the next generation.         potential investor or exploring the benefits of
                                                                 DSA membership, we invite you to join us as
            The good news is that we are building back
                                                                 we reshape and reengerize this downtown into
            from a very strong base. We have some of the
                                                                 an even better version of the one we knew in
            most innovative private sector leaders in the
                                                                 March 2020.
            world, one of the largest downtown residential
            populations in the country, and we’re making
            generational investments in our city. We’ve
            seen hard times before. Each time downtown
                                                                                      Jon Scholes
            Seattle has faced challenges — whether it be
                                                                                      President & CEO
            the Great Fire of 1889, the 1950s-’60s flight to
                                                                                      Downtown Seattle Association
            the suburbs, or the collapse of the retail core in
            the early 1990s — we emerged stronger.

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                  WELCOME MESSAGES   /   03
STATE OF DOWNTOWN Economic Report / 2021
LET TER FROM THE MAYOR

                 The year 2020 was a brutal one of unprecedented and historic challenges for
                 our city: a global pandemic, a civil rights reckoning, a climate crisis and an
                 economic crisis that has had a devastating impact on our workers and our
                 local businesses, especially downtown.
                 With the lowest cases and hospitalizations of every major American city,
                 Seattle showed it could lead the way during the pandemic with our collective
                 actions. We began adapting early to respond to the COVID-19 pandemic,
                 establishing a first-in-the-nation small business support program to provide
                 grants to hundreds of struggling businesses, free citywide testing, and
                 assistance to our residents for rent, meals and child care.
                 The challenges ahead are some of the greatest in our city’s history, but 2021
                 also offers hope with a vaccine. Getting millions of our workers and residents
                 vaccinated will be key to reopening and economic recovery, and Seattle will
                 lead the nation with efforts on equitably distributing vaccines.
                 As we reopen the city, revitalizing and supporting downtown businesses,
                 nonprofits, workers and residents will be key to our long-term economic
                 recovery. I am proud to support the efforts of the Downtown Seattle
                 Association as they work to support their members, ratepayers and
                 stakeholders through the immense challenges brought on by COVID-19. I love
                 this city, and I am confident that we will come back more just and equitable.

                                   Stay healthy,
                                   Jenny A. Durkan
                                   Mayor of Seattle

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                            WELCOME MESSAGES   /   04
STATE OF DOWNTOWN Economic Report / 2021
DOWNTOWN SEATTLE 2020

Report Card

LIVE                                                                             WORK
Residential Population                                                           Total Number of Jobs
37% increase since 2010 / 2020 estimate: 84,201                                  37% increase since 2010 / 2020 estimate: 300,375

60%                                                                              60%

40%                                                                              40%

20%                                                                               20%

 0%                                                                                0%
       2010     2012         2014          2016          2018          2020             2010         2012          2014          2016    2018            2020

SHOP                                                                              PLAY
Brick-and-Mortar Retail Jobs                                                     Dining, Hotel, Recreation, Arts and
31% decrease since 2010 / 2020 estimate: 6,069                                   Entertainment Jobs
                                                                                 44% decrease since 2010 / 2020 estimate: 15,282
50%                                                                               50%

25%                                                                               25%

 0%                                                                                0%

-25%                                                                             -25%

-50%                                                                             -50%

       2010     2012         2014          2016          2018          2020             2010         2012          2014          2016    2018            2020

                          Sources: data on this page were derived from multiple sources, including CoStar, Esri, Puget Sound Regional
                       Council, Opportunity Insights and the Washington State Employment Security Department. Note that while most
                         jobs data are for March, we used 2Q estimates for 2020 to better capture the impacts of COVID-19. Population
                       data are for July of each year and 2020 population was adjusted downward based on occupancy data from CoStar.

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                           DOWNTOWN SEATTLE 2020 REPORT CARD   /    05
STATE OF DOWNTOWN Economic Report / 2021
5

                                                                                       N

                                                                Galer St.

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                                            UPTOWN                              SOUTH
                                 e
                                 .

                                                                              LAKE UNION

                                                                                                               WEST
                                                                                                              CAPITOL
                                                                                                               HILL

                                                                                    DENNY

                                                                                                                          Broadway
                                                          BELLTOWN                 TRIANGLE

                                                                                     RETAIL
                                                                                     CORE
                                                                            WEST
                                                                                                              FIRST
                                                                            EDGE
                                                                                                              HILL

                                                             WATERFRONT

         Downtown Is a Family                                                           PIONEER
         of Neighborhoods                                                               SQUARE                     CHINATOWN-
                                                                                                                  INTERNATIONAL
                                                                                                                     DISTRICT

      Downtown Seattle is a collection of 12
      neighborhoods that account for approximately
      half of all the economic activity in Seattle.
      Downtown is home to some of the densest
      neighborhoods in the Pacific Northwest. In
      fact, more than one in 10 Seattleites calls
      downtown home. During the COVID-induced
                                                                                               SODO
      downturn, these areas of residential density
      have been crucial to the survival of the street-
      level businesses that make downtown a vibrant
      urban center.

                                                                                              S. Lander St.

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                    NEIGHBORHOOD MAP   /   06
STATE OF DOWNTOWN Economic Report / 2021
From the vibrancy of Pike Place Market to the
        blue waters of Elliott Bay, there are so many
        things to love about downtown Seattle—
        including its resilience.

        In the face of the pandemic’s harsh impact,
        DSA continues to strive to ensure the health
        of the city’s urban center, and the quality
        of life within it. The future of downtown
        remains bright, and we can’t wait to
        be reunited with it once again.

      lanepowell.com | 800.426.5801

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                  ADVERTISEMENT   /   07
STATE OF DOWNTOWN Economic Report / 2021
Economic
Competitiveness

                                                    Murals on First Avenue
STATE OF DOWNTOWN 2021 ECONOMIC REPORT   ECONOMIC COMPETITIVENESS    /   08
STATE OF DOWNTOWN Economic Report / 2021
Seattle has been the envy of the nation, adding                                 can least afford it. Hotels, retail, restaurants, arts
                 jobs and residents faster than nearly every major                               and entertainment have been particularly affected.
                 city most years since 2010. Unfortunately, greater                              Those industries will likely take years to recover
                 Seattle was the first area in the nation to be                                  to pre-COVID-19 levels of activity. Federal aid and
                 impacted by COVID-19. Because of the growth of                                  downtown Seattle’s residential population of nearly
                 the tech sector and the area’s diverse, talented and                            90,000 have been key components in supporting
                 educated workforce, Seattle will have advantages                                small businesses that reopened. Downtown
                 over other cities in the years ahead. Still, a full                             neighborhoods saw restaurants and stores spill
                 recovery will likely take two or more years.                                    onto sidewalks and streets over the summer and
                                                                                                 innovate with tenting and heat to serve customers
                 Without intervention, the economic recovery will
                                                                                                 through the fall and winter.
                 be uneven. Many of the industries hit hardest are
                 in sectors dependent on foot traffic and visitors.                              In the section that follows, we look at the
                 With most office employees working from home                                    characteristics that have made downtown
                 and a once-thriving visitor industry decimated by                               Seattle the economic powerhouse of the region
                 the pandemic, businesses in the downtown core                                   and use these to assess the current health of the
                 face ongoing challenges. This especially impacts                                downtown economy.
                 people in lower-income job categories — those who

                                      Downtown Seattle Is the Heart
                                         of the City’s Economy

                       Downtown as a Percent of the City’s Total:                                                     Despite being less than 6% of
                                                                                                                      Seattle’s landmass, downtown
                                                                                                                      accounts for approximately
                                                                                                                      half of the economic activity
                                                                                                                      in Seattle, including more than
           81%                          78%                         55%                          54%                  half the jobs, about a third
                                                                                                                      of brick-and-mortar retail
                                                                                                                      sales, more than a third of
        Office Space                Hotel Rooms                      Jobs                     Commercial              leisure spending (including
         Inventory                                                                           Property Value
                                                                                                                      dining) and half the taxes
                                                                                                                      paid by businesses in the
                                                                                                                      city. Downtown businesses
           52%                          49%                         39%                           31%                 contribute 49% of the gross
                                                                                                                      regional product within the
                                                                                                                      city of Seattle.
       Business Taxes              Gross Regional              Leisure Spending            Brick-and-Mortar
           (2019)                  Product (2019)                   (2017)                    Sales (2017)

             Sources: CoStar, Emsi, Esri, Puget Sound Regional Council, Smith Travel Research and
            Visit Seattle. Figures are for 2020 unless otherwise specified. Leisure spending includes
                                   dining, arts, entertainment and recreation.

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                     ECONOMIC COMPETITIVENESS   /   09
Working Toward Inclusive Recovery
The coronavirus pandemic brought into clear focus                                ensure that the economic recovery supports the most
socioeconomic disparities across our country, state and                          vulnerable among us and provides opportunities for more
city. People of color, the elderly, low-income individuals,                      people to share in future economic prosperity.
people working in service industries and those without
                                                                                 As we work to rebuild, we must remove unnecessary
access to health resources have proven to be at much
                                                                                 barriers to permitting and housing development so more
higher risk.
                                                                                 people who want to live here can do so. This must be
The uprising against racial injustice over the summer                            met with investments in infrastructure that support our
of 2020 further elevated the inequities that exist and                           growing communities, particularly low- and middle-
the work that lies ahead. For downtown to be healthy                             income families, with greater investment in public schools,
and vibrant, we must commit to an inclusive recovery,                            recreational amenities, and open space. We must fulfill
meaning one that welcomes everyone to the city and                               our promise to complete the Sound Transit 3 package,
that provides economic opportunities and social support                          bring back buses to our streets, and improve the transit
for marginalized communities. As the heart of city life,                         rider experience because we know that transit is the great
downtowns should represent and welcome residents,                                equalizer for accessing jobs and housing. Finally, we
employees and visitors of all incomes, races and                                 must elevate our private sector partners who are boldly
ethnicities, genders and ages.                                                   reinventing ground-floor spaces to increase opportunities
                                                                                 for small businesses and entrepreneurs and then support
With the rollout of vaccines creating the potential for
                                                                                 them by providing a safe and welcoming place to
a further reopening of our economy, it is important to
                                                                                 conduct business.

                                             Downtown’s Most Vulnerable Populations

                 13,895                                                8,664                                                       7,853
       residents are senior citizens (65+)                        residents work in the                              households include someone
                                                                     service industry                                     with a disability

                 6,044                                                  5,128                                                  4,669
           households are below the                               households have no                                       households receive
                poverty level                                      internet at home                                        food stamps/SNAP

                  4,157                                                1,400                                                   15.4%
       residents have no health insurance                residents do not speak English well                       of downtown residents who are
                                                                                                                  in the workforce are unemployed

                              Source: Esri Community Analyst. These data are as of July 1, 2020. Note that Esri’s models reflect
                                 COVID-19’s estimated impacts for economic statistics but not for demographic statistics.

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                             ECONOMIC COMPETITIVENESS   /   10
Myrtle Edwards Park, Waterfront

                                                           Diversity Index

                                         +6                        52                            -11
                             change in downtown Seattle     downtown’s current         downtown Seattle compared
                               diversity index 2010–2019    diversity index score       to downtowns nationwide

                               The diversity index represents the likelihood that two persons chosen at
                               random from the same area belong to different races or ethnic groups. It
                               also captures the racial and ethnic diversity of a geographic area in a single
                               number, zero to 100 (a higher score represents a more diverse population).
                               From 2010 to 2019, downtown Seattle’s diversity index increased 6 points
                               from 46 to 52. This is still 11 points lower than the 2019 average of 63 for
                               downtowns nationwide.

In the 2020 International Downtown Association                           Affordability Metrics
Vitality Index, downtown Seattle scored high marks for                   Downtown Seattle percent difference from
its economy and vibrancy, on par with New York City                      nationwide downtown average
and San Francisco. Seattle’s center city also improved
on its diversity index score over the past decade.
However, compared to other U.S. downtowns, Seattle                          Median Owner-occupied
                                                                                    Housing Value                                              135%
scored low on other measures of inclusion, including
residential diversity, the share of the population that is                             Median Rent                    55%
middle income and home ownership affordability.
                                                                         Area Median Income (2018)             33%

                                                                           Income Spent on Housing
                                                                                and Transportation      9%

                                                                         Source: International Downtown Association, 2020 Downtown Vitality Index

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                               ECONOMIC COMPETITIVENESS       /   11
Who Works Downtown?

                                                                                       51%
                                                                                       are male and
                                                                                       49% are female

                                                                                       44%
                                                                                       have a bachelor’s
                                                                                       degree or higher

Jobs Are Key to Downtown’s
Continued Success                                                                      60%
                                                                                       are between the ages
                                                                                       of 30 and 54

Employment peaked in the first quarter of 2020 with an
estimated 348,000 jobs based downtown. After adding
129,000 jobs between 2010 and 2020, downtown lost 45,000
jobs in the second quarter of 2020. This compares to 28,000                            15%
jobs lost during the Great Recession. While some jobs are                              identify as Asian
coming back, we estimate downtown ended the year with                                  (the fastest-growing
                                                                                       employee population
approximately 20,000 fewer jobs compared to the first quarter.                         downtown by race)

Most job losses are expected to be temporary. However, with
remote working becoming more common and the effects of
COVID-19 on transit service, it is uncertain how long it will
take before the daytime worker population returns to previous
levels. In a September 2020 DSA survey of businesses and
                                                                                       50%
                                                                                       travel less than 10 miles
organizations in Seattle, nearly half of respondents said that                         to get to work
at least 25% of their employees had already returned to their
office or worksite and most expect at least 25% to return by
mid-2021. These workers, along with residents and visitors,
support a vibrant, diverse array of urban amenities such
as restaurants, bars, brick-and-mortar retailers and a lively
nightlife scene.                                                                       6%
                                                                                       also live downtown
Downtown has increasingly been a place for people to gather,
share ideas and enjoy the benefits of proximity. Amid a
pandemic, however, people are cautious about unnecessary
time spent outside the home. Many workers express a desire to
                                                                  Source: U.S. Census Bureau (onthemap.ces.
return to the office at least a few days per week. Downtown’s      census.gov). These represent 2018 figures.
return to vibrancy is tied to getting COVID-19 under control
and providing safe spaces conducive to the return of urban life
and the downtown workforce.

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                             ECONOMIC COMPETITIVENESS        /   12
Denny Triangle

                        COVID-19 Impacts Create Uncertainty
                           for Downtown’s Office Market
In 2020, downtown Seattle office rents fell by 6% and          Despite the pandemic, investors continue to show
vacancy increased from 5.4% to 8.7%. Much of the new           confidence in the Seattle market. Lab space is in high
vacancy was due to new construction as occupancy did not       demand. In fact, the vacancy rate for Seattle lab space at
decrease. Rent growth is expected to be flat through 2021      the end of 2020 was less than 1%, according to CBRE. The
before beginning to climb again the following year. The        area also saw some of the highest-priced office deals in the
amount of occupied office space downtown is expected           nation since the start of the pandemic, including the $652
to continue to increase annually but at a much lower rate      million sale of 2+U (Qualtrics Tower). This was the highest
than was seen over the past few years. Including new           price for a single-asset property in the Puget Sound region
construction, vacancy is expected to top out at 11.5% in the   and the seventh-largest in the U.S.
third quarter of 2021 and remain above 10% until 2024.

                                                                                                                  Source: CoStar

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                          ECONOMIC COMPETITIVENESS   /   13
Office Vacancy                                                                          Office Rent
Downtown Seattle (year-end data)                                                        Downtown Seattle (year-end data)

15%                                                                                     $50

                                                                                        $40

10%
                                                                                        $30

                                                                                        $20
5%

                                                                                        $10

0%                                                                                       $0

      2010                      2015                          2020               2025         2010                  2015                            2020             2025

  Actual             Forecast

                                                                                        Peer-city Comparisons
        Change in Occupied Office Space                                                 Occupied office space downtown grew only slightly in 2020,
        Net change in occupied square feet                                              yet our center city experienced one of the best performances
        in downtown Seattle each year                                                   among peer downtowns. San Francisco fared the worst, with
                                                                                        downtown occupancy decreasing 7.2%.
         2010                 0.9 M

             2011                         1.7 M
                                                                                        Change in Occupied Square Feet of Office Space
         2012                   1.1 M                                                   Among peer downtowns, year-over-year change, 2020
         2013                0.8 M

         2014                 0.9 M
                                                                                        San Francisco       -7.2%
         2015                                                            3.8 M
                                                                                        Austin                      -5.5%
         2016                                                 3.1 M

         2017                 0.9 M                                                     Boston                              -3.9%

         2018                                                    3.3 M                  Portland                                -2.8%

         2019                                         2.3 M
                                                                                        Denver                                  -2.7%
         2020        0.4 M
                                                                                        Salt Lake City                              -2.5%
        2021*         0.5 M

        2022*                           1.6 M                                           Washington, D.C.                                -1.6%

        2023*                         1.4 M                                             Atlanta                                             -1.3%

        2024*                             1.7 M
                                                                                        Los Angeles                                          -0.9%
        2025*                                 1.6 M
                                                                                        Vancouver, B.C.                                       -0.6%
        *2021-2025 show forecast data
                                                                                        Chicago                                                -0.4%

                                                                                        Seattle                                                            0.5%

                                                                                        Source: CoStar. The cities were selected based on similarities to Seattle that
                                                                                        make them competitive markets (for example, strong growth in tech talent).
                                                                                        For consistency, CoStar’s “multifamily” downtown boundary was used for each
                                                                                        city except for Seattle, where DSA’s boundary was used. Note that these are
                                                                                        preliminary numbers.

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                                 ECONOMIC COMPETITIVENESS      /   14
Downtown Office Construction

                                                                                     With an inventory of 79 million square feet of office
                                                                                     space, downtown supports a dynamic economy. This
                                                                                     sector has experienced a net gain of 17 million square
                                                                                     feet since 2010. This has expanded the downtown
                                                                                     office inventory by 27% over that period.
                                                                                     Currently, there are 3.1 million square feet of office
                                                                                     space under construction downtown. This is about on
                                                                                     par with the average over the past 10 years. Despite
                                                                                     this new supply, downtown occupancy rose from 86%
                                                                                     in 2010 to 91% by the end of 2020.
                                                                                     In addition to space under construction, there is more
                                                                                     than a half-million square feet in demolition, shoring
                                                                                     and excavation phases in preparation for future
                                                                                     development. An additional 7.7 million square feet are
                                                                                     in earlier stages of development (“land-use issued”
                                                                                     and “predevelopment” phases) and do not yet have
                                                                                     building permits.

Rainier Square

       Office Space Square Footage by Status and Completion Year

                                                                                                                Completed
                 2010                        1,169,000
                                                                                                                Under Construction
                 2011                               1,622,000
                                                                                                                Demolition, Shoring and Excavation
                 2012              534,000
                                                                                                                Land-use Issued
                 2013            409,000
                                                                                                                Predevelopment
                 2014   63,000
                                                                                                             The numbers next to each bar indicate the
                 2015                                                    2,593,000                           total square feet of office space completed
                                                                                                             or scheduled for completion each year.
                 2016                                                   2,521,000                            Please note that those in predevelopment
                                                                                                             have uncertain timelines and do not yet
                 2017                                                                3,621,000
                                                                                                             have land-use or building permits.
                 2018             500,000

                 2019                                                                            4,511,000

                 2020                        1,198,500

                 2021                                                   2,543,500

                 2022                                       2,022,000

       2023+ or TBD                                                                                                                              6,868,757

       Source: DSA 2020 Year-end Development Guide

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                  ECONOMIC COMPETITIVENESS           /   15
A Hot Housing
Market Cools                                                                                                             Credit: Alex Mulyar

                                                                                                                         The Cobb Building

The past decade was one of incredible       the center city had fewer occupied       decreased supply and increased
growth in the residential sector.           apartments at year-end than at the       demand and prices.
Approximately 45% of apartment              start. Downtown lost 1,594 apartment
                                                                                     One outcome of lower rents and
units downtown were built since             households in 2020, with vacancy
                                                                                     condo prices downtown is that they
2010 and yet vacancy was at a record        rising to 10.4%. Suburban markets
                                                                                     may become more affordable and
low of 5% by the end of 2019. High          saw a modest increase in occupancy
                                                                                     therefore accessible to a more diverse
demand drove rent increases faster          and a slight increase in vacancy,
                                                                                     spectrum of individuals. Younger
in Seattle than in most U.S. cities,        mostly driven by new construction.
                                                                                     artists, middle-income families and
though this was tempered somewhat
                                            The condo market downtown was            working-class households may find
by unprecedented residential
                                            also not immune to a downturn.           downtown more affordable in the
construction bringing new supply to
                                            Through the summer of 2020,              wake of geographic shifts caused
the market.
                                            downtown experienced increases in        by COVID-19.
In downtown, there are some signs           the number of listings and decreases
                                                                                     *2000 is as far back as this data set goes.
of residential demand slowing down.         in closed sales and prices while
For the first time since at least 2000*,    other areas of the Puget Sound saw

Annual Change in Occupied Apartment Units
Downtown Seattle

6,000

4,000

2,000

    0

-2,000

         2000              2005      2010         2015          2020          2025
                                                                                                                Sources: Costar, Northwest
   Actual       Forecast                                                                                            Multiple Listing Service

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                               ECONOMIC COMPETITIVENESS          /   16
Percentage of Units Vacant at the End of Each Year
                  Downtown Seattle

                  20%

                   15%

                  10%

                   5%

                   0%
                         2000                        2005                       2010    2015                     2020                   2025

                      Actual            Forecast               Source: CoStar

            Residential Units by Current Status and Delivery Year

                                                                                                  Completed
                    2010              829
                                                                                                  Under Construction
                     2011       202
                                                                                                  Demolition, Shoring and Excavation
                     2012                   1,875
                                                                                                  Land-use Issued
                    2013                       2,446
                                                                                                  Predevelopment
                    2014                             3,292
                                                                                               The numbers next to each bar indicate
                    2015                               3,600                                   the total units completed or scheduled
                                                                                               for completion that year. Please note that
                    2016                     2,199                                             those in predevelopment have uncertain
                                                                                               timelines and do not yet have land-use or
                     2017                                            5,723
                                                                                               building permits.
                     2018                               3,780

                    2019                             3,195

                    2020                    2,020

                     2021                                                       7,262

                    2022                                     4,104

             2023+ or TBD                                                                                                                   20,024

            Source: DSA 2020 Year-end Development Guide

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                      ECONOMIC COMPETITIVENESS   /   17
Peer-city Comparisons
                                                                                                   In 2020, downtown Seattle’s apartment rents
                                                                                                   decreased more than all of our peer downtowns
                                                                                                   except for Boston. All but Atlanta and Vancouver,
                                                                                                   British Columbia saw decreasing rents.
                                                                                                   In terms of the change in the number of occupied
                                                                                                   units, roughly half of the downtowns saw decreases
                                                                                                   and half increases. The number of occupied units
                                                                                                   in downtown Seattle decreased 3.1%. Downtown
                                                                                                   San Francisco fared the worst, with a 5.4% decrease
                                                                                                   in occupied units.

Onni South Lake Union

Year-over-year Change in                                                                Year-over-year Change in Apartment
Apartment Rents 2019-2020                                                               Occupancy 2019-2020
Percentage change in rent among                                                         Percentage change in number of units
peer downtowns                                                                          occupied among peer downtowns

Boston              -13.3%                                                              San Francisco         -5.4%

Seattle                  -11.1%                                                         Washington, D.C.            -4.5%

Chicago                   -10.2%                                                        Boston                       -4.2%

Los Angeles                  -9.4%                                                      Seattle                             -3.1%

Washington, D.C.             -9.4%                                                      Chicago                                -2.1%

Portland                           -6.6%                                                Los Angeles                                          0.3%

San Francisco                        -5.7%                                              Vancouver, B.C.                                             1.7%

Denver                                -4.5%                                             Denver                                                      1.8%

Austin                                     -2.9%                                        Austin                                                       2.0%

Salt Lake City                                -1.0%                                     Salt Lake City                                               2.2%

Atlanta                                                  0.6%                           Portland                                                      2.4%

Vancouver, B.C.                                                       7.3%              Atlanta                                                              4.6%

Source: CoStar. The cities were selected based on similarities to Seattle that make them competitive markets (for
example, strong growth in tech talent). For consistency, CoStar’s “multifamily” downtown boundary was used for
each city except for Seattle, where DSA’s boundary was used. Note that these are preliminary numbers.

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                                 ECONOMIC COMPETITIVENESS     /   18
Ben Paris, The State Hotel

A Visitor Industry
Devastated by COVID-19                                  Hotels
                                                        Downtown is the center of the visitor industry
                                                        for Seattle, with 37% of the Airbnb listings
With an incredible natural backdrop, outstanding
                                                        in the city, 78% of the hotel rooms and more
visitor amenities and an array of things to see and
                                                        than 80% of the hotel revenue. However, due
do, Seattle has long been the Northwest’s leading
                                                        to COVID-19 impacts, hotel revenue was down
destination for tourists and conventioneers. The
                                                        more than 90% nearly every day through the
loss of this business due to COVID-19 has had a
                                                        spring and summer of 2020. As many as 29
devastating economic impact. Before the pandemic,
                                                        hotels closed at least temporarily. By June, the
15 million people visited Pike Place Market each year
                                                        number of units listed on Airbnb in Seattle had
and 12 million visited the Seattle Center, where more
                                                        decreased by 26% year-over-year.
than 5,000 events were held annually. Locals, along
with visitors, have enjoyed downtown’s unmatched        The hotel sector is expected to take a long time
entertainment options, including art galleries,         to recover from the downturn, not returning to
performances, museums, professional sporting events     2019 levels until 2023 or later.
and myriad dining options.

                                                                         Sources: Airbnb, Pike Place Market, Seattle Center,
                                                                                     Visit Seattle and Smith Travel Research

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                ECONOMIC COMPETITIVENESS         /   19
Hotel Demand (Nights Sold)                                                               Hotel Revenue
Downtown Seattle                                                                         Downtown Seattle

5M                                                                                          $1B

4M
                                                                                         $750M

3M
                                                                                         $500M
2M

                                                                                         $250M
1M

0M                                                                                          $0M

     2012          2014           2016                2018            2020                    2012             2014             2016             2018             2020

  Actual        Forecast              Sources: Visit Seattle and Smith Travel Research

                                                                                                                   Thompson Seattle, West Edge

                                          Downtown Hotel Occupancy Compared to Peer Cities
                                                          July 2019 vs. 2020

 90%             91%                            89%                                               89%                           89%
                                                                87%                                                                                             86%
                                                                                                                84%
                                                                                81%
                                74%                                                                                                             74%

                                                                                                                                       34%                            36%
                                                                                                        31%           31%
                                                                      26%             28%                                                               28%
                                                      23%
                       20%
        15%                           17%

  Seattle     Vancouver, B.C.    Austin           Boston         Portland       Nashville         Denver      San Francisco     San Diego        Atlanta       Los Angeles

     2019       2020                      Sources: Visit Seattle and Smith Travel Research. Cities selected from those that Visit Seattle considers Seattle’s peer downtowns.

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                                 ECONOMIC COMPETITIVENESS          /   20
Hotel Jobs
                                                                                              Downtown Seattle
      Jobs at downtown hotels decreased                  8,000
      by approximately 4,000 in the second
      quarter of 2020 due to furloughs
      and layoffs. This represents a                     6,000

      loss equivalent to almost half the
      estimated 2019 hotel employment
                                                         4,000
      downtown.

                                                         2,000
      Source: Puget Sound Regional Council. Note that
      the 2020 figure was estimated using data from
      PSRC and the Washington State Employment
      Security Department. While PSRC figures are for       0
      March of each year, we estimated 2020 using
                                                                 2010   2012   2014   2016        2018          2020
      data from April to better capture the effects of
      COVID-19. The 2013 jobs data were unavailable
      and were therefore interpolated.

                                                                                                    citizenM, South Lake Union

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                       ECONOMIC COMPETITIVENESS    /   21
Credit: Port of Seattle
                       The 2020 Seattle cruise season was canceled with a loss
                     of roughly $900 million in economic impact and 5,500 jobs.

                                                                       Smith Cove Cruise Terminal at Pier 91

Cruise Ships
                                                   Cruise Passengers
Seattle serves as the leading U.S.                 Port of Seattle
West Coast port for Alaska cruises.
The Port of Seattle has hosted more
                                                   2010                           961,698
than 1 million passengers annually
since 2017* and is homeport to                     2011                    885,949

the largest ships on the West                      2012                          934,900
Coast, including Norwegian Bliss,
                                                   2013                   870,994
Norwegian Encore and Ovation of the
Seas. The major cruise lines serving               2014                823,780

Seattle include Carnival, Celebrity,               2015                     898,032
Holland America, Norwegian
                                                   2016                             983,539
Cruise Line, Oceania, Princess and
Royal Caribbean.                                   2017                                     1,071,594

                                                   2018                                        1,114,888

*Due to the COVID-19 pandemic, all 2020 sailings   2019                                                 1,210,722
were canceled.
                                                   2020   0

                                                                                       Source: Port of Seattle

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                 ECONOMIC COMPETITIVENESS            /         22
Washington State Convention Center Addition, Summit building

                                                 Looking Ahead: The Washington State
                                                     Convention Center Addition

The Washington State Convention Center has been a                                     Opening in 2022, WSCC’s Summit building will be
powerful economic driver for our community. Since its                                 transformative, adding an estimated $260 million in annual
opening in 1988, people from outside Washington have                                  visitor spending and 3,900 direct and indirect jobs when
spent over $6.9 billion locally when coming to WSCC                                   fully operational. The Addition is also supporting as many
events. In 2019, this spending added an average of                                    as 6,000 union jobs during construction, including an
$986,062 per day to Washington’s economy and directly                                 estimated 900 apprentices. Located just one block northeast
generated some 3,616 jobs (full-time equivalent).                                     of the existing Arch building, Summit will double the
                                                                                      capacity of the center’s offerings.

Convention Attendance
Washington State Convention Center

                                                                                                           At least 76 future citywide
 2010                                                                       390,000
                                                                                                           conventions previously booked at the
 2011                                                                            420,000                   Washington State Convention Center
 2012                                                                            422,000                   have canceled, resulting in a loss of at
                                                                                                           least $512 million in economic impact.
 2013                                                                         404,000
                                                                                                           Cancellations represent a definite loss
 2014                                                                            420,000                   to the region because of Seattle’s lack
 2015                                                                     380,000                          of available future dates and the fact
                                                                                                           that we have a smaller convention
 2016                                                                     380,000
                                                                                                           center compared to other major cities.
 2017                                                                      383,000

 2018                                                                         400,000

 2019                                                                       390,000

2020*                     95,000

*2020 figure is an unofficial estimate.   Sources: Pine Street Group, Washington State Convention Center

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                        ECONOMIC COMPETITIVENESS      /   23
Credit: Urban Villages

                                                                                                                                  RailSpur, Pioneer Square

                                                  Downtown Development
In conjunction with the State of Downtown Economic                                new projects announced in 2020 and some were canceled
Report, the Downtown Seattle Association publishes a                              or put on hold. Safety measures also delayed some projects
development guide each year to summarize construction                             underway. However, Seattle remains one of the top
and investment activity downtown. These statistics are a                          markets in the nation for new construction, once again
measure of optimism and confidence in the future of the                           outpacing all other U.S. cities in Rider Levett Bucknall’s
downtown economy.                                                                 crane index (July 2020).
COVID-19 has so far affected downtown construction
activity less than many other industries. There were fewer

                          Data Snapshot
                                                                      new residential units        new hotel rooms          square feet of new
                                                                                                                                office space

                         In 2020, downtown developers
                         completed 21 projects, including:
                                                                            2,020                       560                       1.2M

                         As of December 2020, 54 projects
                         were under construction, including:                8,840                           369                   3.1M

                                                       For the most up-to-date information, please visit:
                                                              downtownseattle.org/development
                                                                                                              Source: DSA 2020 Year-end Development Guide

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                ECONOMIC COMPETITIVENESS       /   24
Transportation
& Access

                                                Credit: @transit_culturalism

                                                     South Jackson Street
STATE OF DOWNTOWN 2021 ECONOMIC REPORT   TR ANSPORTATION & ACCESS      /   25
As the employment center of the region, it is essential                          Credit: Sound Transit

to have a variety of options to get to, through and
around downtown. Safe and reliable transportation is
a priority for DSA. Before COVID-19, Seattle had some
of the highest transit demand in the nation. COVID-19,
however, has impacted how people move about the
city. Preferences for transit and shared mobility
options have given way to a desire for personal space.
Between diminished transit service, social-distancing
requirements limiting capacity, and a large share of
the population expressing apprehension about riding
transit, bringing the downtown workforce back to
2019 levels of ridership will be a challenge. Shifting to
driving is simply not an option and is not consistent
with Seattle’s climate goals. What is needed for
continued economic prosperity for downtown and
the region is a smart, forward-looking, multi-pronged
mobility strategy.
In the section that follows, we look at how
transportation to and around downtown has changed
over the past year and explore some of the challenges
and opportunities ahead.
                                                                                                                                           LINK Light Rail

                                        COVID-19 Had a Profound Impact
                                          on Transportation in 2020

                                                                                                         Seattle was the first major metro area in
Apple Mobility Index
                                                                                                         the nation impacted by COVID-19. On
Average percent change from Jan. 13, 2020
                                                                                                         March 5, King County recommended that
                                                                                                         anyone who could work from home do
       48%
                                                             2020 Q2                                     so until at least the end of that month.
                                                                                                         This led to a massive contraction in the
                                                                                                         number of people moving around the city.
                                                             2020 Q3
                                               19%

             14%                                             2020 Q4                                     When Washington Gov. Jay Inslee issued
                                                     1%
                                                                                                         a statewide “Stay Home, Stay Healthy”
 -7%
                                                          Source: Apple Mobility Index.
                                                                                                         order on March 23, Seattleites were already
                                                          Data indexed to where
                                                          Jan. 13 = 100. Based on phone                  driving 45% less, taking transit 81% less
                                        -27%              searches for directions by                     frequently and walking 41% less, according
                                                          mode of travel. Note that this
                                                          data is particular to users of                 to the Apple Mobility Index (which uses a
                          -63%                            Apple products and therefore                   Jan. 13, 2020 baseline). When Seattleites
                                 -67%                     may not be representative of
                                                          the entire population.
                                                                                                         emerged from their homes again, driving
                   -77%
                                                                                                         was the dominant mode of travel. By
                                                                                                         December 2020, transit ridership remained
   DRIVING           TRANSIT              WALKING                                                        down nearly 70% compared to the
                                                                                                         baseline, while driving and walking were
                                                                                                         near pre-pandemic levels.

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                    TR ANSPORTATION & ACCESS   /   26
Washington State Ferry, downtown Seattle

                 Transportation Changes Year-over-year
                 Average daily percent change (2019–2020)

                  I-5 (Downtown)         King County Metro    Highway 99 Tunnel    Washington State Ferries     Amtrak (Cascades)
                                           (Systemwide)                                 (Downtown)

                        -16% -16%

                 -34%

                                                                            -54%
                                                -57%
                                                       -62%
                                                                     -65%                    -68% -65%
                                         -71%
                                                              -76%
                                                                                      -81%
                                                                                                                               -89%
                                                                                                                        -92%
                   Q2       Q3      Q4                                                                          -95%

In 2020, transit ridership, including ferries and long-distance rail, dropped 50% or more                              Sources: Seattle Department
according to each agency’s data, but has started to increase again. Driving showed the                                 of Transportation, Washington
                                                                                                                       State Department of
fastest return to normal by the end of the year, with vehicular traffic on I-5 just north and                          Transportation COVID-19
south of downtown down only 16%. According to the Seattle Department of Transportation,                                Multimodal Transportation System
                                                                                                                       Performance Dashboard
vehicle traffic counts on downtown surface streets are starting to tick up again as well.
Having been down approximately two-thirds from pre-COVID-19 levels in April and May,
surface traffic was down roughly a third from 2019 levels toward the end of 2020.

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                 TR ANSPORTATION & ACCESS   /   27
A Shift Toward More Remote Work
Many employees based downtown are currently working                                  the office after the pandemic is over. In addition to worker
from home due to COVID-19. Cell phone data aggregated                                preferences and a shift in office culture, COVID-19-related
by Placer.ai showed that weekday daytime visits to                                   school closures and lack of daycare options could keep
the neighborhood by those who work downtown have                                     employees from returning to their offices in the near term.
consistently been down about 80% compared to pre-
                                                                                     The current work-from-home period has some clear
pandemic levels. In a Commute Seattle survey, 89% of
                                                                                     downsides and a mix of in-office and remote work is likely
employers said that some portion of their employees are
                                                                                     in the future. A study published by Cushman & Wakefield
working remotely, with nearly three-quarters saying that
                                                                                     shows that not all people want to work from home and
between 81% and 100% of their employees were doing so
                                                                                     among those that do, most prefer a hybrid model. Working
as of May 2020. In that same survey, 50% of employers
                                                                                     exclusively from home, office workers feel disconnected,
anticipated a post-COVID-19 work culture where their
                                                                                     and there are fewer opportunities, particularly among new
employees would work from home at least a few times
                                                                                     hires who benefit from in-person mentoring when working
per week.
                                                                                     in an office setting. Cushman & Wakefield’s research also
This is in line with national surveys of employers as well                           showed that work-from-home scenarios are likely to have
as employees. In a meta-analysis of several national office                          only a slight impact on office absorption as offices increase
employee preference surveys, CoStar found that 21% of                                space per employee and utilize more square footage for
employees favor a fully remote work environment, 55%                                 flexible meeting spaces.
prefer partially remote and 25% prefer to work entirely at

           Remote Work Culture
           Among Seattle companies

                                              1%
                                  Every day

                                                              9%

                                A few times                   9%
                                    a week
                                                                                                            41%

                                About once                         15%
        REMOTE WORK FREQUENCY

                                   a week
                                                         7%

                                                                                                          Pre-COVID-19
                                A few times                                          27%
                                   a month                                                                Post-COVID-19
                                                              9%

                                                                                                       Questions asked:
                                About once                               17%
                                  a month                                                              Which best describes your organization’s
                                                                                                       remote work culture prior to COVID-19?
                                                    5%
                                                                                                       After COVID-19, what do you anticipate your
                                                                                                       organization’s remote work culture to be?
                                                                                     27%
                                     Never

                                                        6%

                                                   4%
                                    Unsure

                                                                               23%                     Source: Commute Seattle

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                                      TR ANSPORTATION & ACCESS   /   28
How Workers Commuted
                                              Before COVID-19
                                    In 2019, 74% of workers came downtown by some other means
                                  than driving alone. That number had been steadily rising for more
                                        than a decade. The largest share (46%) came by transit.

           Pre-COVID-19 Commute Choices
           Downtown Seattle workers

                                                                  3%
                                                           3%

                                                   6%

                                          7%
                                                                                                   Transit

                                                                                                   Drive Alone

                                                                                                   Carpool & Vanpool
                                    9%
                                                                                        46%        Walk

                                                                                                   Telework

                                                                                                   Bike

                                                                                                   Other

                                                  26%

            Source: Commute Seattle 2019 Commuter Mode
            Split Survey. Note that this data does not include
            workers who live downtown but commute to
            locations outside downtown; nor does it include the
            SoDo neighborhood. Figures are based on those who
            begin work between 6–9 a.m. on weekdays.

                                                                        Credit: Urban Villages

                                                                       Streetcar, Pioneer Square
STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                                        TR ANSPORTATION & ACCESS   /   29
Credit: Sound Transit

                                                                                                         U District Light Rail Station

                                The Need to Invest in a Variety
                                  of Transportation Options

In the face of the pandemic and beyond, Seattle and              are approximately $200 million less than the pre-COVID-19
the region are still actively investing in a world-class         forecast. Sound Transit projects a revenue gap of $6.1
transportation system to meet the future needs of the            billion from 2020 through 2041.
city. As workers return to their offices, there must be
                                                                 There is some positive news. Light-rail stations opening
viable options other than driving alone. Before COVID-19,
                                                                 in the University District, Roosevelt and Northgate will
nearly half of downtown employees took transit to work.
                                                                 connect these neighborhoods to downtown as early
Shifting even a quarter of these trips to cars is not a viable
                                                                 as fall 2021. New stations in Bellevue will allow for a
solution. Downtown has a limited supply of parking and
                                                                 24-minute ride from downtown Bellevue to Westlake
roadways were already at capacity pre-COVID-19. The
                                                                 Station by 2023 and commuters from Lynnwood will be
closure of the West Seattle Bridge due to structural issues
                                                                 able to access downtown by light rail starting in 2024.
has decreased road capacity further. Some city projects are
                                                                 Also, while funding issues could cause some delay, the
getting pushed out into the future, such as the Center City
                                                                 implementation of Sound Transit 3 is still on the horizon,
Connector streetcar along First Avenue. Without additional
                                                                 with opportunities to create greater, long-term access
resources to increase service levels and ensure riders have
                                                                 across the region. Passed in 2016, ST3 is the region’s
enough personal space, the system cannot sufficiently
                                                                 largest investment in our transportation future. It will
bring back downtown’s workforce.
                                                                 dramatically increase connectivity to, through and within
When we move to a post-COVID-19 world, there may                 downtown. The levy will fund an additional 62 miles of
initially be trepidation around transit use. Other               light-rail lines, expand bus rapid transit, increase Sounder
commuting options such as biking and walking can help            train capacity and add a second downtown transit tunnel
fill the gaps.                                                   to serve six new stations. In addition, 88% of Seattleites
                                                                 recently voted to fund 150,000 hours of transit service
Budget constraints may also limit the ability of transit
                                                                 over the next six years through the Seattle Transportation
agencies to provide adequate service as workers begin to
                                                                 Benefit District.
return downtown. The 2021-22 King County budget noted
that projected sales-tax revenues for Metro in 2021-2022

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                                             TR ANSPORTATION & ACCESS      /   30
It is important to provide a variety of safe, reliable
ways to travel. Long-term trends favor high transit
usage. However, in the wake of the pandemic and
with restricted road and transit capacity, other
options must also be explored. This could include
flexible remote-work options. Encouraging walking
and biking by providing ample welcoming safe
public spaces would also encourage the adoption of
these alternatives. Spreading out the workday with       Help your business get ready for the future of
staggered start times or compressed workweeks is         commuting. DSA partner Commute Seattle
another potential way of bringing workers back safely    provides free consultations and resources
in the short term while transportation capacity is       to businesses on topics like transportation
limited. In the long term, robust transit funding to     benefits, telework policies, carpool and vanpool
sustain and grow Seattle’s transit service will help     programs and supporting active commutes.
ensure a downtown and a region that are poised for       Visit commuteseattle.com to learn more and
recovery and continued investment.                       connect with their transportation specialists.

STATE OF DOWNTOWN 2021 ECONOMIC REPORT                                               TR ANSPORTATION & ACCESS   /   31
Urban Experience

                                                Pike Place Market
STATE OF DOWNTOWN 2021 ECONOMIC REPORT   URBAN EXPERIENCE   /   32
Holidays at Westlake Park

                            Downtown has a strong economic foundation.      Downtown is the center of Seattle’s cultural
                            In recent years, the center city has seen       life. Before COVID-19, downtown saw more
                            growth and investments that position Seattle    foot traffic, more park users and more tourists
                            for resiliency. Downtowns are strong due        than anywhere else in the city. While the
                            to their density, access to public spaces and   pandemic created a major economic setback,
                            diversity of residents compared to car-         we are confident that downtown will remain
                            centered neighborhoods. Downtown Seattle’s      an attractive place to visit, shop, live, work,
                            walkability and accessibility make it a place   play and invest.
                            that a large cross-section of society can
                                                                            In the section that follows, we look at what
                            access and enjoy. To ensure the resilience
                                                                            makes a vibrant urban experience and how
                            of downtown and the region, these assets
                                                                            downtown Seattle is performing against
                            should be protected and built upon. Ongoing
                                                                            these metrics.
                            attention to affordability, public amenities
                            and safety are critical.

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Pier 62, Seattle waterfront

Who Lives Downtown?                                               Downtown Demographics

Downtown Seattle has evolved into one of the most
dynamic urban centers in the country. During the
past decade, a prospering job market, a beautiful           84,201*                                  37
natural environment and vibrant shopping, arts,               population                         median age
restaurant and cultural scenes attracted record
numbers of new residents. While growth slowed in
2020 due to COVID-19-related factors, the downtown
core is expected to remain an attractive place to
                                                                 1.4                          $82,586
                                                         average household size          median household income
live in the years to come. Today more than one in 10
Seattleites — 84,000 people — live in the center city.
The following is a snapshot of who makes downtown
                                                           *Our downtown total population estimate from Esri was
their home. Please note that all statistics on             adjusted using residential occupancy data from CoStar to
downtown population and households are estimates                     account for changes due to COVID-19.

for July 1 of each year. Given the speed and severity
                                                                       Source: Esri Community Analyst
of the COVID-19 crisis, the data inputs used for these
estimates may not yet capture the full impact of
the pandemic.

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Educational Achievement                                                          While the city of Seattle ranks the
             Among downtown Seattle residents, age 25+                                        highest in the nation for educational
                                                                                              attainment, according to U.S.
                                                                                              Census Bureau data, the downtown
                                                                                              population scores even higher on
                                                                                              education than the city or county.
              No High School Diploma                 5%

                   High School Graduate                      8%

                           Some College                                             19%

                       Bachelor’s Degree                                                                        37%

                       Advanced Degree                                                           31%

                                                                                                       Credit: Seattle University

Children Under 18
Downtown Seattle

                   2,022
                                                                                   2010        More than 5,500 children under 18 live
                                                                                               downtown. In the past decade, school-
                                             1,637
                                                                                   2020        aged children (ages 5-17) increased by
                                                                                               168%. Downtown has the densest and
                                                                                               fastest-growing child population in
                                                                  1,252
                                                                                               the city but, is the only neighborhood
       966
                                                                                               without its own public school.

                                                                                        673
                                 543
                                                      422                 362

                                                                                               Source: Esri Community Analyst
AGE          0–4                       5–9                  10–14               15–17

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Households by Income
        Downtown Seattle
Fifth & Pine

                                 COVID-19 Had a Profound Impact
                                   on the Urban Environment

Loss of Foot Traffic Means the Loss of Business                                      Business Closures
COVID-19 led to the closure of many businesses downtown                              • According to a study by Yelp, more than 4,500 businesses
and across the region. In DSA’s Business Outlook Survey                                in the Seattle Metro area had closed between March and
conducted in May and September, restaurants and retail                                 April. By the end of August, that number was still over
were hit particularly hard and were more likely than those                             3,000, with 59% being permanent.
in most other industries to express concern about having
                                                                                     • DSA has tracked more than 220 permanent street-level
to close locations or pay rent. These industries, along with
                                                                                       business location closures in Seattle in 2020, including
arts, entertainment and hotels, also said it would take
                                                                                       more than 160 downtown alone.*
longer to bring employees back and become profitable than
those in other industries represented in the survey.                                 • Despite a decline in foot traffic downtown, roughly 90
                                                                                       businesses overcame all odds to open new storefronts
                                                                                       in 2020.

          *Note that this count refers to specific brick-and-mortar locations. Some of these businesses shifted to other models such as online and delivery
             and some may still have open locations downtown or elsewhere. While it’s assumed that the majority of these locations closed due to the
           pandemic, there may be other reasons for business closures. DSA’s business closure tracking is not a complete inventory. Rather, it is primarily
            based on news reports, announcements by individual businesses, and listings and direct observation of spaces that have gone up for lease.

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Creative Solutions
                                            in the Face of Crisis
                     Economic recovery could be a two- or three-year time horizon, but actions can be taken
                    now to sustain downtown’s treasured mix of amenities and ensure a thriving urban core.
                     Support for small business is essential. Creative adaptation of shared public space is key
                    to addressing the economic effects of the pandemic and impacts of social isolation. Also,
                       maintaining outreach, clean and safe services, which the DSA provides through the
                         Metropolitan Improvement District, are a foundation for recovery and renewal.
                               Below are just a few of the creative responses that emerged in 2020.

                                                                                     Takeout and Delivery
                                                                                     As COVID-19 impacted the ability
                                                                                     to serve large groups of patrons
                                                                                     with the same density, businesses
                                                                                     and nonprofits shifted gears. Some
                                                                                     restaurants enhanced delivery
                                                                                     services and added take-out options
                                                                                     and to-go windows for food and
                                                                                     cocktails. Some offered products
                                                                                     that were not previously part of their
                                                                                     business model. And some began
                                                                                     using their kitchens to make food for
                                                                                     those in need.
Credit: FareStart

Outdoor Seating
Many restaurants added outdoor seating. Some
brought shelters by way of tents, canopies
or plexiglass. Others experimented with
dining bubbles. In response to the impacts
of COVID-19 on local businesses, the Seattle
Department of Transportation has issued
special permits allowing for expanded use
of sidewalks and street space by restaurants.
At the start of 2021, there were 61 downtown
restaurants with these temporary outdoor
seating permits. DSA’s Park Ambassadors
spaced out tables and chairs for social
distancing and added spacing indicators for
food truck lines.

                                                                                                                    Pike Place Market

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Through the work of DSA and others, numerous murals
                                            were created in downtown neighborhoods:

                                38+           53+             50+                     53+                 39+
                                Belltown     Capitol Hill   Chinatown-ID        Pioneer Square           Retail Core

Local artist, Carina at Sixth & Pine

Urban Art
DSA helped coordinate corporate and private funding
to hire artists and create many storefront murals on
boarded-up buildings during business shutdowns.
The murals added a touch of vibrancy, creativity and
positivity and helped to deter graffiti and damage
while stores were closed. With these shutdowns, there
was more than an acre’s worth of plywood spread
across the facades of businesses in the Pike-Pine
corridor alone.

                                                                           Photo credit: Matt McDonald

                                                                       Street art, downtown Seattle

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Tougo Coffee, First Hill

                                 A Changing Retail Landscape
Assuming that downtown followed the trends for                                 Downtown’s Retail Real Estate
King County, the center city lost an estimated $103
                                                                               Downtown currently has 10.3 million square feet of retail
million in taxable retail sales in 2020 (a 5% drop for the
                                                                               space, with nearly a half million more under construction.
year). We also estimate (based on county trends) that
                                                                               After achieving a record low of 1.7% in 2019, downtown’s
approximately 4,400 brick-and-mortar retail jobs were
                                                                               retail vacancy is estimated to have reached 2.5% by the end
lost downtown in the second quarter, though some
                                                                               of 2020 and rent growth slowed to a halt.
of those have come back. This was after downtown
had seen a 5% increase in brick-and-mortar retail
employment in 2019.

Retail Rent                                                                    Retail Rent Vacancy
Downtown Seattle                                                               Downtown Seattle
$50                                                                            4%

$40
                                                                               3%

$30

                                                                               2%

$20

                                                                               1%
$10

 $0                                                                            0%

      2010              2015               2020                     2025            2010                  2015              2020                     2025

  Actual     Forecast          Sources: Esri, Opportunity Insights, Puget Sound Forecaster, Puget Sound Regional Council.

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Peer-city Comparisons                                            Change in Occupied Square Feet
         Seattle was about on par with other                              of Retail Space
         downtowns nationally for retail                                  Among peer-city downtowns,
         performance. Retail occupancy was either                         year-over-year in 2020
         flat or down in all of these downtowns.
         Overall, they fared somewhat worse than
         their metro areas but, retail struggled at
                                                                          Austin             -2.1%

         both the downtown and metro levels.                              Denver             -2.0%

                                                                          Washington, D.C.     -1.8%

         Source: CoStar. The cities were selected based on similarities
         to Seattle that make them competitive markets (for example,      San Francisco          -1.6%
         strong growth in tech talent). For consistency, CoStar’s
         “multifamily” downtown boundary was used for each city           Salt Lake City         -1.6%
         except for Seattle, where DSA’s boundary was used. Note that
         these are preliminary numbers.                                   Portland                     -1.2%

                                                                          Los Angeles                    -1.0%

                                                                          Seattle                         -0.8%

                                                                          Atlanta                              -0.4%

                                                                          Chicago                                -0.3%

                                                                          Vancouver, B.C.                         -0.1%

                                                                          Boston                                    0.0%

                                                                                               Nordstrom flagship store, Seattle

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The Paramount Theatre

            Arts, Entertainment and Restaurant
            Industries Were Hit Hard in 2020
            Parts of the economy have already started to reopen with new protocols in place
            to ensure safety for workers and customers. Nevertheless, national polling and
            evidence from other areas that have reopened show that — regardless of the level of
            reopening — the pandemic will continue to have a depressing effect on the economy,
            particularly for sectors related to travel or in places where people congregate such as
            fitness centers, restaurants, hotels, sports, arts and entertainment venues.

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Job Impacts
                                                           Food-Service Jobs
While many of the jobs lost have already started           Downtown Seattle
coming back, COVID-19 shutdowns had a profound
impact on these industries. There were approximately       25,000
13,700 job losses among downtown food-service
workers in the second quarter of 2020. This is the         20,000
equivalent of approximately 60% of the total food-
service jobs downtown in 2019. Center city jobs in arts,
                                                           15,000
entertainment and recreation industries decreased by
roughly 6,300 in the second quarter, the equivalent of
                                                           10,000
approximately three-quarters of the employment in
these industries downtown in 2019.
                                                            5,000

                                                               0
                                                                    2010   2012      2014          2016          2018         2020

Economic Impacts to the Arts                               Arts, Entertainment and Recreation Jobs
                                                           Downtown Seattle
Nearly all arts organizations canceled programs due to
COVID-19 and a majority called off annual fundraisers,     10,000
a critical source of revenue for these organizations.
ArtsFund surveyed its members in March 2020 and
projected that Puget Sound-area arts organizations          7,500
would see the following as a direct result of COVID-19:

                                                            5,000
NEARLY                AS MUCH AS

5,000                 $135M
workers furloughed    in lost revenue in 2020               2,500
or laid off

                                                               0
                                                                    2010   2012      2014          2016          2018         2020

                                                                                  Source: Puget Sound Regional Council. Note that
                                                                                  the 2020 figure was estimated using data from
                                                                                  PSRC and the Washington State Employment
                                                                                  Security Department. While PSRC figures are for
                                                                                  March of each year, we estimated 2020 using
                                                                                  data from April to better capture the effects of
                                                                                  COVID-19. The 2013 jobs data were unavailable
                                                                                  and were therefore interpolated.

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COVID-19 Heightened Challenges Facing
                            Downtown’s Urban Environment

Before downtown can return to viability, some key
challenges must be addressed. Public spaces must
feel accessible, safe and welcoming to everyone.
Before COVID-19 and the civil unrest triggered
by the murders of George Floyd, Breonna Taylor
and others, the issue of homelessness nearly
always topped the list of concerns in downtown
stakeholder surveys, along with transportation
and housing affordability. Recently, there has
been a notable increase in the number of people
citing concerns about public safety as well.

    Violent Crime in Downtown Seattle
    Includes aggravated assault, homicide,
    rape and robbery                                                                                        Looking north from Beacon Hill

                                 1,936   1,955

                                                 1,835
                                                                   A Safe Urban Environment for Everyone
                         1,697
                                                                   Seattle’s criminal-justice and behavioral-health systems
                                                                   are fractured and fail to protect all Seattleites, deter crime,
                 1,541                                             support, or help those who become trapped in a cycle of
         1,486                                                     crime, arrest and release. In the face of a public-health crisis,
                                                                   this puts downtown small businesses in further jeopardy.
                                                                   Concerns over personal safety are compounding concerns
                                                                   about returning to the office. Citywide and downtown
                                                                   polling shows that Seattleites believe there is an urgent need
                                                                   to help people struggling in crisis on our streets. In this
                                                                   environment, downtown is in a fragile state and without
                                                                   action, this could have long-term impacts.
                                                                   Without a cohesive solution, downtown has seen an increase
                                                                   in reports of violence, theft, vandalism and individuals in
                                                                   crisis. All of these make the neighborhood feel less safe. The
                                                                   increase in violent crime is particularly disturbing. Between
                                                                   2015 and 2020, these crimes increased by 23%.
                                                                   As downtown reckons with the current health and economic
                                                                   crisis and continued social injustice, our city leaders must
                                                                   come together to forge a way that allows Seattle to be a
                                                                   model for cities around the world by becoming a safe and
         2015    2016    2017    2018    2019    2020              welcoming place for everyone and an attractive destination
                                                                   for visitors, residents and investment.
                                         Source: City of Seattle

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DSA Outreach Team near Western Avenue

                                             Seattle Continues to Face a
                                              Growing Homeless Crisis

A January 2020 point-in-time count conducted by All          As a region, we must address our growing homelessness
Home King County tallied 11,751 individuals experiencing     crisis. The city of Seattle and King County are moving
homelessness in King County — a 5% increase over 2019.       forward together on plans to merge operations and policy-
Roughly half of those were sleeping outside, mostly within   making for homelessness services. This is a much-needed
the city of Seattle.                                         step toward housing the incredible number of people
                                                             experiencing homelessness in Seattle and King County.
The need has only gotten more urgent in the face of a
                                                             However, this work has only begun. We can’t lose focus
public-health crisis. As COVID-19 outbreaks created fear
                                                             on what’s happening downtown, where hundreds sleep
of sleeping in shelters and capacity was limited due to
                                                             outside on any given night. A sustainable solution requires
social-distancing requirements, the number of tents
                                                             working together on many fronts. This includes increasing
throughout downtown’s neighborhoods multiplied
                                                             coordination, diversion and prevention, state and regional
dramatically. By the end of 2020, the number of tents
                                                             investment, and increased housing supply.
downtown had increased to more than three times the
highest previous record.

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