Eleven for 22: Seattle’s big problems ahead

Two weeks ago I set some markers – not predictions – for the New Year. I would now like to explore some specific issues that will affect Seattle and Washington.

Amazon. The city and state’s largest employer faces many challenges beyond the dislike of Seattle City Council. With founder Jeff Bezos stepping down to focus on his other businesses, the company only has its second CEO, Andy Jassy, ​​who headed the cloud computing division.

it’s face greater regulatory control around the world, including from President Joe Biden’s Federal Trade Commission Chairman Lina Khan, who is expected to address antitrust issues. Competitors like Walmart and Microsoft are formidable in retail and cloud computing.

Boeing. Even though Amazon has overtaken Boeing as Washington’s largest employer, the aerospace company still has a massive footprint here. It will be an important year as the company seeks to recover from the 737 MAX disaster and other setbacks.

Yet in exclusive interviews with my colleague Dominic Gates, senior executives failed to project enough vision and confidence to convince industry analysts that all will be well. MAX’s orders are lower than the competing airliner of Airbus, the debt is heavy, and a breakdown in defense and commercial aircraft is not unthinkable.

A big question is, can senior executives break free from the Jack Welch management culture that has dominated Boeing in recent years and return to the emphasis on engineering excellence? Or will “shareholder value” for Wall Street always be the # 1 position?

Bruce Harrell. Seattle’s new mayor inherits a series of challenges ranging from a homelessness crisis that has worsened as more money has been spent, to growing crime that threatens the city’s quality of life .

He’s got the chops and the temperament to make a big dent in the city’s problems – if he can establish a working relationship with the far-left militant majority in city council. Seattle is in dire need of a successful mayor.

A key part of Harrell’s mandate will be to establish communications and relationships with businesses early on. It goes from Amazon to the individual store away from the central core. The business is an ecosystem that includes both. Small businesses need large ones and vice versa.

China and trade. Washington’s merchandise exports fell from $ 60.3 billion in 2019 to just over $ 41 billion in 2020, down from a decade ago. Exports to China, our biggest customer, are about half of what they were in the mid-2010s.

A profound effect: Washington was the ninth largest exporter among states in 2020, up from the third a few years ago.

Part of the blame is the pandemic (exports to Canada, Japan and others have also fallen), but Trump’s trade war with China is the big violator. Both US political parties have hardened their stance against Beijing on everything from human rights violations and military build-up to a mercantilist trade policy that runs counter to US interests.

China faces several crises: a shrinking working-age population, a collapse in real estate, tighter political control of the economy by Xi Jinping, and continued COVID-19 stumbles. None of these points to better trade numbers for Washington.

Data compiled by WiserTrade, an international trade research company, offers some hope. Until October 2021, Washington’s exports of all commodities increased by more than 28% overall from the previous year and by 33% for China.

Cultural institutions. The recovery of the Seattle Symphony, Seattle Art Museum, theater, performances and other cultural assets is essential to the health and attractiveness of the city. COVID-19 gets a vote – will it force a stop or not? So far when I have been to Benaroya Hall they are checking proof of vaccination and the public is masked.

Gates Foundation. With the divorce of Bill Gates and Melinda French Gates, the world’s most influential nonprofit in Seattle is entering a period of uncertainty. It is to watch. Still, the pair donated $ 15 billion last year, bringing the donor’s endowment to $ 65 billion. For now, they are working together.

Real estate. Despite all of its problems, Seattle has managed to stay in the Top 10 Most Wanted Real Estate Markets in the report influencing emerging trends 2022 from PwC and the Urban Land Institute. At # 9, it’s the last city on the West Coast not to fall from the top (it was # 1 in 2018). The outlook for housing construction is solid.

But not all details provide comfort. Only 15% of real estate executives surveyed qualified commercial properties as ‘buying’, while 54% were ‘kept’ and 31% were ‘for sale’. These last two figures were even higher for office buildings.

Still, the report said: “One local interviewee said that ‘the growing diversity of Seattle’s population is a catalyst for attracting more diversity and top talent,” while another pointed to the “rich history of Seattle. ‘entrepreneurship from Boeing to Paccar’ – not to mention Amazon, Microsoft, Weyerhaeuser and retail giants Starbucks, Nordstrom and Costco, among other local legends. Significant projects underway include a major redevelopment of the central waterfront and expansion of the convention center, as well as head office projects for Microsoft and Amazon. ”

Note that not all are in the city.

Return to the office. Coronavirus variants keep pushing that or modify security protocols. I think a comeback is inevitable and is already happening on a limited scale (some totally disagree with me). Without it, much of the city’s employment and tax base will be affected.

Supply Chain. Our piece in this pandemic mess is the Northwest Seaport Alliance and its rail and road links. A good sign: the first phase of Seattle Terminal 5 opens this week for large ships. Four new Panamax Super-post cranes are ready for work on the first ship to call, MSC Monterey.

Third avenue. This main downtown thoroughfare was packed with businesses in 2019. It’s now transformed into a linear slum of closed shops, tents, people with drug addiction and outdoor drug trafficking. The pandemic played a role again, but the main driver was crime, including organized and widespread shoplifting. This caused the demise of Macy’s, Columbia Sportswear, IGA Kress, Bergman Luggage and more.

In 2022, I’ll see if Third can make a comeback. It is a marker for the entire downtown area and public safety throughout the city.

Upcoming election. Democrats seem likely to lose control of the US House and possibly the Senate. Our blue stronghold will remain. But GOP victories will hurt our funding for infrastructure and social services, hampering the Biden agenda. I hope I am wrong.

What did I miss? The comments section is waiting for you.

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