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Sunday, March 15, 1998 < Prev Next >

High-Tech Is Back In Town

Downtown Seattle Draws Some Biggies

As downtown Seattle sprouts glitzy new retail, office and residential developments, another face of the city is quietly emerging: From Pioneer Square to Lake Union, Seattle is becoming a high-tech mecca.

The growing trend became more evident this past week as software billionaire Paul Allen said he'll move his Vulcan Northwest corporate headquarters to an 11-story office tower he plans to build behind Union Station near Pioneer Square.

That followed the recent announcement by RealNetworks, a company that develops software products and services to access the World Wide Web, that it will lease up to 180,000 square feet of space in the Seattle International Trade Center overlooking Elliott Bay.

In contrast to the sprawling suburban campuses of Microsoft, Nintendo and other companies on the Eastside, Seattle's high-tech employers can be found in scattered office sites from Eastlake Avenue East by Lake Union to First Avenue South in Pioneer Square.

"The old vision was, you take a big chunk of land and say this is where our city's research is going to be," said Joel Horn of Wright Runstad, which is developing the World Trade Center; the complex, under construction on Seattle's waterfront, has snagged Visio as a tenant. "That isn't how it's going to work here. If we keep up with the wiring and work on the transit, the whole thing has the potential to be tied together as one large urban campus called Seattle," said Horn.

Where Seattle's high-tech future may lead is unclear. While Allen's Vulcan Northwest is not a high-tech company itself (the company manages Allen's business and civic ventures), it could be a beacon for other high-tech companies. The Union Station development, with plans for five office buildings, is drawing interest from everyone from law firms to insurance companies, the kind of eclectic mix that high-tech companies say is drawing them to Seattle in the first place.

Greg Smith, a principal at Martin Smith Real Estate Services, said 50 percent to 70 percent of the leasing deals today from Pioneer Square north along the waterfront to the Seattle International Trade Center are high-tech related.

"It's the excitement of downtown. It's fun to be there. You don't need your car to go everywhere. There is such a variety of things to do, from shopping to running to browsing," said Smith. A Martin Smith-led partnership, 2601 Elliott, is buying the trade center from a Canadian investment group.

"Our philosophy has always been to stay downtown," said Patty Cox, RealNetworks' facilities manager. "We were searching for a unique space that was outside the high-rise box. We wanted flexibility in designing the space and felt an older building would have a more creative environment."

RealNetworks began in Pioneer Square in 1995 and moved to the 1111 Third Avenue Building in 1996, where it occupies space on several floors. It is scheduled to move to the trade center in mid-1999.

In today's white-hot market, recruiting and retention of high-tech employees can be a company's No. 1 task, and, as in retail, location can be the difference.

WRQ, a developer of connectivity software, is another company that has eschewed the campuses of the Eastside for more traditional office spaces on Dexter Avenue North along Lake Union.

"There are parts of a suburban campus that are appealing, and others that are not," said WRQ executive Char Kaufer. "The idea that everyone needs to get into a car to get there is not."

Employees at WRQ can bike, run, bus and kayak to work. And while workers at a suburban location might be able to look out on a green expanse of lawn, WRQ employees in the Westlake Union Center and the 1100 Dexter Building can look out over the water. "There is something very relaxing about that," she said.

Like other high-tech companies that have put down roots in Seattle, WRQ started out in 1981 in a small building at the north end of Lake Union, moved to a larger space on Eastlake, relocated to the Westlake Union Center and then spilled over into the new 1100 Dexter Building, an Alper Northwest development, last year.

As high-tech companies have grown, so has their visibility in Seattle's business core and beyond.

Aldus, the desktop publishing company founded by Paul Brainerd, began in Pioneer Square. It was acquired in 1994 by Adobe Systems, based in San Jose. Adobe is now moving its Seattle operation to a new complex at the Quadrant Lake Union Center in Fremont. While it considered an Eastside move, the company decided to remain in Seattle, where most of its employees live.

The Adobe move opened up space in Merrill Place, an office building co-owned by Paul Allen and the Seattle development company Nitze-Stagen, who also are co-owners of the Union Station property.

Tera Computer, a fast-growing high-tech company, has signed a lease to occupy up to 131,000 square in Merrill Place over the next three years. The supercomputer company, now in offices on Eastlake Avenue, expects to double its work force of about 95 within the next 12 months.

Similarly, Visio, the Seattle-based software manufacturer, has signed a lease to move from its current location in the 520 Pike building in the heart of downtown Seattle to the new World Trade Center complex., the Internet bookseller, meanwhile, has staked out offices in the Columbia Building on Second Avenue between Pike and Pine streets. And, a Web development company with 50 employees, moved last month from an office on Post Alley to bigger space on Fourth Avenue across from Westlake Center.

Biotech firms such as ZymoGenetics and Immunex also continue to be major presences in Seattle.

The changes in Seattle office tenancy have come as no surprise to Martin Selig, who developed the city's tallest building, the 76-story Columbia Seafirst Center. Long the haven of the financial and legal communities, Seattle no longer is national headquarters to as many banks as it once was, and the growth of law firms has slowed. The interest that high-tech companies are showing in Seattle is an obvious plus, he noted: They're bringing in new jobs.

Horn, who unsuccessfully campaigned for a Commons park south of Lake Union, believes that that area is ripe for high-tech development in the future.

Then there is Union Station.

Kevin Daniels of Nitze-Stagen thinks high-tech companies will be naturally interested in the area.

But he's also gotten inquiries from law, accounting and insurance firms who want to get out of the congested financial district and locate near bus lines; the restaurants, art galleries and night clubs of Pioneer Square and the International District; and the upcoming new stadiums for the Mariners and Seahawks.

In other words, said Daniels and others, anything could go as Seattle's makeover continues.

Lee Moriwaki's phone message number is 206-464-2320. His e-mail address is:

The Seattle Times

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