Collaboration and community: Recent highlights from the Office of Economic Development

With the first half of 2018 in the rear-view mirror, we’d like to look back at some highlights of the last few months as we look forward to supporting you in your business and in your career.

Our teams have been hard at work for you in the community; we are pleased to report that as of mid-June, the combined efforts of our Small Business and Key Sector teams have directly provided services to 503 businesses. Our “Only in Seattle” team, through community partners, served an additional 374 businesses. In addition to individual contacts, read on for just a few examples of community convenings in which our office is engaged.

Africatown Innovation District Lunch and Learn:  In June, we were delighted to host Africatown in the Bertha Knight Landes Room of City Hall, where over 30 community and corporate leaders met to explore available resources and programs in support of a robust innovation district in the Central District. With a shared goal of preparing underrepresented youth for meaningful careers in IT and the creative economy, participants mapped current efforts, reflected on what is and isn’t working, and articulated their commitment to a more equitable tech economy. We thank GeekWire, Microsoft, HTC, HEREseattle, Seattle Colleges, Vulcan, Social Venture Partners and our City colleagues in Arts, IT, and Planning and Development for their time and energy. We look forward to next steps!

 

Peer Networking Event on Commercial Affordability: In our work with the Mayor’s Small Business Advisory Council, market and systemic pressures continue to make commercial affordability a significant challenge facing small businesses. In May, we convened about 15 business district managers from across Seattle at a local startup firm – Blokable – to discuss commercial affordability. The Office of Economic Development’s (OED) Only in Seattle, Small Business Development and Key Sectors teams, in partnership with the Seattle Chinatown International District Preservation and Development Authority (SCIDPDA) and Onpoint Real Estate Services, organized this peer networking event to share a model for commercial lease education workshops in Chinatown ID and Little Saigon, vet innovative solutions for affordable commercial space, and make connections between business districts.

 

Summer Youth Employment Experiences: As a part of our office’s efforts to provide a continuum of career-connected learning and work experiences for Seattle’s youth, every summer, employers across the public, private and non-profit sectors in Seattle open their doors to thousands of youth interns. We thank the private sector donors who have together contributed over $150,000 to support youth employment this year, and in particular, our valued partner JPMorgan Chase, who through five years of cumulative support, surpassed the $1 million mark in 2018!

Given our focus on equitable access and prioritization of under-served communities, including young women and people of color, we are thrilled to spotlight Zilllow Group’s “Shadow an Intern” event at their downtown headquarters. To better enable high school students to envision their careers and set themselves up for success, youth from TAF AcademyYWCA, and the Seattle Housing Authority enjoyed personalized tours of the Zillow office, and a panel focused on career development tips.

Until the fall, stay tuned to the Bottom Line Blog for updates, but in the meantime, please feel free to contact me if our office may better support you in your business and career!

Seattle’s business district managers discover new resources for commercial affordability

On May 31, 2018 about 15 business district managers from across Seattle gathered together at a local startup firm – Blokable – to discuss commercial affordability. The Office of Economic Development’s (OED) Only in Seattle, Small Business Development and Entrepreneurship and Innovation teams, in partnership with the Seattle Chinatown International District Preservation and Development Authority (SCIDPDA) and Onpoint Real Estate Services, organized this peer networking event to share a model for commercial lease education workshops in Chinatown ID and Little Saigon, vet innovative solutions for affordable commercial space, and make connections between business districts.

Blokable—a local startup manufacturer of pre-fabricated housing units that are modular, or stackable, to create multistory residential or mixed-use buildings—launched to reinvent the construction and manufacturing process to be more efficient, green and affordable. Blokable units are cheaper and can deliver results faster than the traditional affordable home building process; think 21st century, tech-enabled mobile homes with a completely redesigned building, delivery and installation process and the ability for commercial uses. Imagine the possibilities! We started the event with lunch catered by San Fernando’s and a self-tour of a Blokable unit – a 300ft2 studio, fully equipped with a bathroom, bedroom, kitchen, lighting and heating. The unit is mobile and can be transported on the back of a semi-truck to almost any destination. As we settled into the agenda, Aaron Holm, Blokable’s Co-CEO spoke to the group about the how the company started and the potential for commercial uses. Want to see Blokable in action? Check out the latest project in Edmonds, WA in partnership with Compass Housing Alliance.

Next, Ken Takahashi, OED’s Development Finance Advisor, introduced OED’s business services and shared the ways in which OED is supporting commercial affordability. Reasonable rents are not the only definition of commercial affordability. A broader approach includes innovative space ideas like Blokable’s products, and education efforts such as commercial lease education workshops, the second topic of the peer networking event.

Jennifer Tam, OED’s Restaurant Advocate and Shanti Breznau, SCIDPDA’s Business Development Manager, presented the model they are using for commercial lease education workshops in Chinatown ID and Little Saigon. They discussed how they developed the curriculum for the workshop series, outreach and engagement methods, and why local grassroots capacity is so critical to the success of designing and executing the workshop. The Commercial Lease Education Workshop overview provides additional details on the program, and you can get an inside look into the second workshop (Vietnamese, Simplified Chinese) that featured tenant improvements—a major factor when it comes to new and existing tenants. A unique feature of the workshop series is relationship building with business owners. Through Shanti’s connections, she knew translation and interpretation services would be essential to a successful workshop, and the content was translated into two languages – Vietnamese and Chinese.

In addition to the workshop series in Chinatown ID and Little Saigon, OED contracted with Onpoint Real Estate Services to provide city-wide workshops on broader lease education topics. Onpoint’s Managing Partner, Jaebadiah Gardner, and his staff will consult with individual business owners on their lease challenges for up to five hours for free. Please contact Yonas Seifu to learn more and get connected to Onpoint for your business needs.

Throughout the presentations, district managers were asked a guiding question – how could you adapt these services to work in your district? To close out the meeting, there was a robust conversation among all the attendees to iterate and expand on these offerings. OED will be following up individually with districts that expressed interest in hosting a commercial lease education workshop and explore partnership opportunities with Blokable to bring affordable commercial options to Seattle’s underutilized space. If you have any questions, please follow up with OED or one of our partners listed below.

More resources from the presentation can be found below:

Land use resources to monitor and track development:

Mayor Ed Murray releases commercial affordability plan

Today, Mayor Ed Murray’s Commercial Affordability Advisory Committee released recommendations to help ensure Seattle remains an affordable and equitable place to do business.

The Committee, which was made up of small business owners, developers, and members of the arts and music communities developed recommendations that focused on small, locally owned businesses.

The Committee’s work builds upon Mayor Ed Murray’s continued focus on affordability in Seattle, including increasing the minimum wage to $15.00 per hour and addressing housing affordability and livability through HALA.

“Affordability is vital to Seattle’s future. Whether it is ensuring people can make a living wage, afford to live where they work or whether they can afford to create something new, we must address affordability from every direction,” Mayor Ed Murray said. “Seattle’s small businesses are what make Seattle a city we love to work and live in. We must ensure that the uniqueness and high quality of life made possible by small businesses today, are possible as the city grows.”

“I want to thank the Commercial Affordability Advisory Committee for their work and their recommendations,” Brian Surratt, Director of the Mayor’s Office of Economic Development, said. “The recommendations will be instrumental as we work to fulfill Mayor Ed Murray’s goal for an affordable Seattle.”

The committee’s recommendations were the culmination of collaboration between small businesses and developers.

“The interests of small business owners and developers really are aligned,” committee member and local developer Liz Dunn said. “Developers who think strategically about the neighborhoods they are working in, understand that creating space which is attractive and affordable for small businesses is an essential ingredient for good development and for creating long term value for residents and property owners.  Building spaces that feel like they belong in a neighborhood, and add character to it, create a pedestrian-friendly experience and a true sense of place.”

“Pioneer Square is a neighborhood that demonstrates how growth and small businesses can thrive together while preserving the arts and the historical legacy of the neighborhood all while paving the way for the future,” Karen True, Director of Business Development for the Pioneer Square Alliance, said. “The balance between new development in Pioneer Square and the interests of small business was a model as we developed our recommendations. I’m pleased the committee recommendations include tools for small business owners as well as property owners and developers.”

“As an immigrant and a small business owner, it is important to me that Seattle remains a place where anyone can start a business who has a good idea,” Solomon Dubie, owner of Café Avole, said. “The Commercial Affordability Advisory Committee worked hard to recommend ideas that will keep Seattle affordable for small businesses.”

The Committee made a variety of short- and long-term recommendations. Highlights included:

  • Explore a new entity focused on commercial affordability. This entity would provide support services for small businesses and small-scale building owners, including technical assistance, help navigating real estate issues and City processes, support from non-public funding resources, activation of public agency-owned property, and coordinated advocacy.
  • Institute new financial incentives. Advocate for legislative changes that would make it advantageous (via property tax exemptions and property tax assessments tied to building income) for property owners to support local small businesses. Stimulate a non-City fund that would provide alternative financing options for both small businesses and small property owners.
  • Make changes to public policy. Specifically, focus on the sale/lease of public property; affordable commercial space within mixed-use housing developments, public spaces or transit oriented properties; zoning that encourages small-scale commercial pockets in residential areas; and policies that promote a healthy mix of local, small businesses and chain/big box retail tenancy.
  • Improve the permitting process. Reduce permitting requirements for qualifying “light-impact” small business projects, strengthen design guidelines that favor small business and retail spaces, and enable greater neighborhood input on tenant selection.
  • Expand technical assistance programs. Increase or supplement the Office of Economic Development’s existing small business resources to include a third-party commercial affordability consulting team, coordinated and diversified outreach (more languages and formats), and an online “Marketplace Exchange” for the small business and property owner community.

Additional recommendations can be found in the full report: seattle.gov/CommercialAffordability.

Mayor Ed Murray directed his Office of Economic Development to work with small businesses, business districts, developers and other stakeholders to explore the implementation of the Commercial Affordability Advisory Committee’s recommendations.

In the short term, the mayor immediately committed to taking action. For example:

  • King Street Station Activation The City will transform the second floor and plaza space of King Street Station into affordable food and retail space that will serve as an attractive gathering place for neighboring residents, workers, and travelers. Funding: $360,000 in federal Community Development Block Grant (CDBG) funds for the renovation of tenant spaces, plus possible matching funds from other sources (e.g. federal grants, foundations).
  • Commercial Affordability Consulting Team The City will create a commercial affordability consulting team to assist small businesses and small-scale property owners with a broad range of real estate and business expertise (e.g. design of tenant spaces, feasibility analysis in renovating buildings, business plan development). Funding: at least $65,000 annually in CDBG funds.
  • Financial Support for Microbusinesses The City will assist low- and moderate-income owned microbusinesses (i.e., five or fewer employees) to overcome a critical obstacle to growth: low-cost capital. The City will partner with a nonprofit lender to provide Individual Development Accounts (IDAs) and 0% interest loans. Funding: $122,000 annually in CDBG funds for the IDA and 0% interest loan products.

 

To read the full response from the mayor including all of his action items, visit seattle.gov/CommercialAffordability.

The committee and the Office of Economic Development identified several pressures facing small businesses as Seattle grows. For example:

  • Space is becoming more expensive: In Seattle, asking retail rents are 7 percent higher than before the recession and 28 percent higher than their post-recession low in 2012.

  • Space is harder to find: Seattle’s retail vacancy rate in the third quarter of 2016 was 1.9 percent, down from a prerecession vacancy rate of 4.1 percent. Industrial vacancy decreased from 3.6 percent to 1.5 percent in the same time period. Decreased availability of commercial space across the city creates challenges for small businesses. They are not able to find space that is suitable for small business use, and what little space that is available has experienced dramatic rent increases as a result of limited selection.
  • Available space is getting larger: Many small businesses need small spaces, but the size of leased retail spaces is increasing. This compounds the affordability challenge for many business owners who may not be able to find appropriately sized spaces. Among existing buildings, 25 percent have available spaces under 1,000 square feet. Of the buildings that will come online in the future (those listed as proposed, under construction, or under renovation) the count falls to 20 percent. With only 1 in 5 planned buildings renting spaces under 1,000 square feet it may become harder for small businesses to find smaller spaces.
  • Small businesses are having difficulty obtaining access to lending capital: When ranked in order of dollars lent per capita, the top 10 census tracts received $7,228 per capita in small business loans from 2010 to 2014, more than 30 times more than the bottom 10 tracts, which received $230 per capita in small business loans in the same time period. These bottom ten census tracts are located in neighborhoods of the city including Rainier Beach, Beacon Hill, Delridge, and Lake City, all areas with concentrations of low-income, minority and immigrant-owned businesses and households, highlighting the need to expand technical assistance programs and outreach to underserved communities.

 

Additional data is featured throughout the report.

Mayor Ed Murray launches advisory committee to support commercial affordability

Mayor Ed Murray today announced today the launch of a Commercial Affordability Advisory Committee that will make recommendations on addressing the rising cost of commercial space for small businesses, develop opportunities to activate public spaces for entrepreneurs, and identify strategies to expand economic development throughout Seattle.

“Small businesses are essential to the economy our city,” said Mayor Ed Murray. “Many of Seattle’s greatest companies got their start in small, affordable storefronts, garages, food trucks, or as simple coffee shops. We will work with the small business community to encourage affordable spaces for existing businesses and develop new opportunities for those ready to launch their dream.”

During the current period of economic growth, new commercial space in Seattle often is dedicated for larger tenants, real estate values have increased commercial rents, and existing commercial properties have been redeveloped, displacing smaller businesses. The committee will review existing City policies and recommend steps to encourage development and preservation of commercial spaces. Recommendations will be made to the Mayor by September of this year.

“We have a business climate that is the envy of cities around the world,” said Brian Surratt, Director of the Office of Economic Development. “We cannot take today’s economic success for granted. By ensuring that the entrepreneurs of tomorrow have affordable options today to start businesses, we can be a city of opportunities and a world-class startup hub for all.”

The group will consider a broad range of solutions to commercial affordability, including incentivizing the construction of smaller commercial spaces, further activation of public spaces to the benefit of food trucks and other small businesses, and the inclusion of affordable commercial storefronts in more affordable housing projects.

About 80 percent of Seattle businesses are small businesses, according to the U.S. Census Bureau. The Paychex IHS Small Business Jobs Index cites Seattle as the number one U.S. metro area for small business job growth.

“As a member of the East African community, many of my friends and neighbors have started small businesses to support their families,” said Solomon Dubie, owner of Café Avole in Southeast Seattle. “I hope that my work on the Commercial Affordability Advisory Committee will help my community continue to find ways to start businesses and remain in business in Seattle as the city grows.”

The 15 member committee includes business owners, commercial real estate stakeholders, and business development advocates. Members include:

  • Liz Dunn, Dunn & Hobbes
  • Maiko Winkler-Chin, Seattle Chinatown International District PDA
  • Sam Farrazaino, Equinox Development Unlimited
  • John Chelico, JSH Properties
  • Don Blakeney, Downtown Seattle Association
  • Frank Gross, Thunder Road Guitars
  • Solomon Dubie, Café Avole
  • Susanna Tran, West Coast Commercial Realty
  • Dennis Comer, Brown Sugar Baking
  • Mariela Fletcher, MANILA MANILA Asian Retail Store and Food to Go
  • Mark Morel, Morel Industries
  • Tam Nguyen, Tamarind Tree and Long Provincial
  • Karen True, Alliance for Pioneer Square
  • Shanti Breznau, independent retail recruitment consultant
  • Megan Jasper, Sup Pop Records