In December 2008, a rare snowstorm dropped a foot of heavy powder on downtown Seattle. The city does not as a rule deal well with snow—people panicked. Abandoned cars lined the freeway. The Seattle Post-Intelligencer suspended publication for the first time in seventy years. (Six months later, under clearer skies, it would stop for good.) Two charter buses carrying students slid through the barrier of an overpass and teetered above Interstate 5—no one was injured, but the hole in the barrier remained. Like most residents, I was unable to get to work. Garbage service stopped; people went sledding on an old couch down Denny Way, the arterial connecting Capitol Hill to downtown. Retail businesses, unable to shut so close to Christmas, counted on their employees to make it in somehow—a housemate of mine snowshoed half an hour each way to his job at the downtown Patagonia. Another housemate, Adam, a financial analyst, was able to stay home with a clear conscience: along with 3,500 other Seattle-based employees of Washington Mutual, he had been laid off the month before. A number of former Starbucks employees were able to stay home as well: the coffee colossus was closing 600 stores nationwide, including five in its home city. Seattle was used to a little weather and the business cycle, but snow and subprime were something else. The city, like Starbucks, had overextended—and now it was hardly working at all.
Near the edge of the continent, where the US crumbles into the Pacific and bleeds upwards, toward Canada, Seattle sits tucked into Puget Sound. The Sound, a tatter-edged inlet, leaks down between the body of Washington State and the Olympic Peninsula—in late summer you can watch red, hook-nosed salmon fight their way over the dam where it enters the city via a system of locks to the north. From there, a channel empties into Lake Union, its houseboat-barnacled shores overlooked by a converted gas plant on a lumpish, waterfront park. The city’s easternmost border is formed by Lake Washington, the largest of its lakes—from the water you can watch cars stream across the floating bridge connecting Seattle to the largely suburban Eastside, where the towers of Bellevue rise below the snow-covered Cascades. Seattle is hilly: with the highest elevation located in and around the city center, it spills steeply down both sides of the ridge between lake and bay. The city grew by annexing surrounding small towns, and these neighborhoods, which maintain their individual characters—along with hyper-local, somewhat separatist political bodies—give the city a cozily suburban, patchworked feel. Ten minutes from downtown (only about twelve blocks square) it’s possible to find yourself on a street lined with verdant bungalows and craftsman homes, vegetable patches dotting the median.
People have lived off this land for centuries. Even before the arrival of white settlers, the richness of the Northwest’s natural environment enabled it to support one of the world’s only settled hunter-gatherer communities. The Duwamish, Chinook, Suquamish, and Coast Salish tribes lived off salmon, shellfish, and cedar, developing civilizations of some cultural and artistic sophistication. Settlers arrived via the Oregon Trail in 1851, gradually and sometimes violently annexing the land from the locals. An economy developed based on timber, which was shipped south to California, and a seemingly indomitable optimism. When the Northern Pacific Railroad decided to locate its terminus in the tiny village of Tacoma rather than its larger neighbor to the north, Seattle’s citizens began laying track for their own railroad on the Duwamish River. Thanks to this independent railroad, a steam-powered sawmill, and the Territorial University (now the University of Washington), the town prospered. When the Great Fire of 1889 destroyed Seattle’s entire central business district, residents noted what a fine job it had done ridding the city of rats. Washington National Building Loan & Investment Association, later Washington Mutual, was founded to provide rebuilding loans—including the country’s first amortized mortgages. The young city’s dogged optimism bore fruit in 1897, when in the midst of a recession brought on by the Panic of 1893 the steamship Portland docked in Seattle with a hold full of Yukon gold. As news of the gold strike spread, hundreds of thousands of unemployed men paid an average of $1,200 to go stake a claim in Alaska. Capitalizing on this sudden flood of “sourdoughs” rushing north to the gold fields, Seattle Post-Intelligencer editor Erastus Brainerd began to market Seattle as the “Gateway to Alaska.” Over the next decade, the city tripled in size.
Seattle’s next great boom followed World War II, when a struggling aviation company operating out of a barn by Lake Union realized it could exploit military technology for commercial use. Boeing, founded by a Yale dropout who came west seeking a fortune in the timberlands, had paid for the construction of a wind tunnel at the University of Washington in 1916, enabling UW to offer classes in aeronautics, creating a reliable source of employees. As the war wound down, Boeing engineer George Schairer was sent to Germany as part of “Operation Paperclip,” an OSS mission to recruit German scientists and keep their knowledge from the USSR. In Braunschweig, Schairer discovered a mass of German research into “swept wings,” a design in which an aircraft’s wings were angled back to reduce drag and prevent the shockwaves that came with high speeds. Schairer reported his discovery to his superiors at the OSS but also to Boeing, suggesting that the concept bore urgent study. Though the information was shared with other companies, Boeing’s wind tunnel enabled the company’s engineers to get a head start on testing the swept wing concept, leading to the development of the B-47 Stratojet. The plane never saw combat, but its design made the jet engine practical; Boeing’s engineers adapted it into the “Dash 80” prototype passenger jet, which became the 707 in 1958. The jet age had arrived, and Seattle—now known as “Jet City”— came to rely almost entirely on its economic dividend. Boeing built the biggest building in the world for the production of its 747 just north of Seattle, and by 1970 was employing 100,800 people—known as “Incredibles”—throughout the region. When France’s Concorde began to look like the future of aviation, Boeing won the contract to produce the US’s first supersonic planes. (Seattle’s ill-fated basketball team, the SuperSonics, was named in honor of the occasion.) But in 1971, concerned about sonic booms and potential damage to the ozone, the US government withdrew funding. A simultaneous recession in the airline industry meant no new orders for over a year. Even as the 747 made its first commercial flight, Boeing fell on hard times. Its employment dropped to 37,000, and for the first time, people began leaving Seattle. The population dipped below half a million; it would take almost forty years to recover.
But there was a silver lining. In order to survive, Boeing began marketing the information technologies it had developed over the years, founding a computer-training center in Seattle. This wasn’t Stanford and Caltech (that is, what was coming to be known as Silicon Valley,) but it had its own charm. In 1979, a small software company called Micro-Soft relocated from Albuquerque to what was then the semirural city of Belleview. Its founders, Bill Gates and Paul Allen (24 and 26 at the time), had grown up in Seattle and attended the prestigious Lakeside Preparatory Academy. In fact, the Gateses, always an entrepreneurial bunch, had been in Seattle since 1880. The first Bill Gates used his delivery wagon to take victims of the Great Fire to safety; when gold was discovered, the family tried their luck in Alaska. It was apparently Allen who pushed to move their new company home. He argued that the Northwest guaranteed a more stable workforce than the already competitive Silicon Valley—the presence of UW meant a pool of trained computer scientists from which to draw. Nor was it insignificant, Gates biographers Stephen Manes and Paul Andrews write, that “the gray Seattle skies reinforced the Microsoft ethic of work till you drop.”
Steely gray in winter, dim and dove-like in spring, cloaked in fog in fall—Seattle’s weather is one of its bitter joys. Our famous rain is abstract, diffuse. More cotton ball than sheet, it is a woozy, three-dimensional rain that softens the city’s hard corners. Calling up moss and mushroom and penetrating everywhere with a kind of psychic damp, the climate almost literally grows into you. In summer, though, when the rain dries out and the clouds clear up, the city is a different place altogether. Not for nothing did Perry Como sing, “The bluest skies . . . are in Seattle.”
The weather, being in its way quite romantic, lends itself to introspection, bookishness, and a sort of unaffiliated mysticism. Seattle is considered the most literate city in the country—over half the adult population holds at least a bachelor’s degree. More of us are atheists than anywhere else in the US; quite a few people meditate. Support for same-sex marriage, reproductive rights, and gun control is a given. But beneath city’s tendency to quiet contemplation, progressivism, and art-making is what Greil Marcus calls, in reference to the Aberdeen, WA (two hours south of Seattle) rock band Nirvana, “True grunge: not just some music-business catchphrase, but dirt.” Early in the city’s history, workmen used a chute, or skid road, through what is now Pioneer Square to send freshly cut timber to the sawmill below, and the drunks and derelicts who filled the area gave rise to the meaning of the “skid row.” Kurt Cobain chose it as an early name for his band. Grunge, that disaffected, famous-for-hating-fame ethos, captured something in the city’s spirit: its real romance with self-contempt, sarcasm, and despondence. Depression here sends people to the bar or to the bridge, to the needle or to California. Homeless residents stare at magazines in downtown’s Rem Koolhas-designed public library, where they are allowed to be but not to sleep. Drunks still wander up and down skid row; along University Way, pierced and wayward kids crouch on the sidewalk with their dogs.
Grunge took the country’s youth culture by storm in the early 1990s. Meanwhile, a more insidious nationalization was slouching toward unsuspecting urban areas that were in the process of classing up. In 1971, two teachers and a writer had opened a storefront in Pike Place Market where they sold custom-roasted coffee beans. They named it Starbucks after the first mate on the Pequod—the one who didn’t want to chase the whale. A decade after the store opened, they hired Howard Schultz, then running American operations for the Norwegian plastics giant Hammarplast, as head of marketing and operations. Five years later, Schultz had bought the company from the original owners and started on a headlong drive to expand it all over the world. Starbucks opened stores in Chicago and Vancouver in 1987; the first New York store opened in 1994. That same year, a young hedge fund analyst named Jeff Bezos, noticing the astonishing growth in home internet use, quit his job to move to Seattle and open a business, Amazon.com, out of his garage. For a while it seemed that Seattle could succeed on something other than its rain and grungy, anti-establishment sulk. Early in the last decade, at the height of Seattle optimism, even the local bank got into the spirit of things: Washington Mutual took itself national, aiming to become, as its CEO said at the time, nothing less than “the Wal-Mart of banking.” WaMu launched an ad campaign, which debuted during the Oscars, featuring the rosy (and in retrospect worrisome) new slogan, “The Power of Yes.” Almost any loan, regardless of the income or situation of the borrower, would be approved, and WaMu proceeded to peddle its “flexible lending” with a sense of cheery informality—commercials ridiculed other lenders and their “rules.” Even the bank’s remarkably casual new ATMs were on-message, greeting customers with a “Hi there! May I have your secret code?” Instead of “Yes” or “No,” WaMu offered “Sure” or “No thanks.” It was as though someone had boxed up a bit of Seattle nice: clubby, a little corny, resolutely laidback, and self-consciously inclusive to the point of non-commitment—you needn’t even bank with them to avoid a fee. WaMu wanted to be more like a friend than anything else: “If we’ve done our jobs,” CEO Kerry Killinger said in 2003, “five years from now you’re not going to call us a bank.” This turned out to be true, though not in the way Killinger probably meant.
Success was changing Seattle, smoothing it out. In 2002, the city elected a square-jawed, brush-cut Chicagoan named Greg Nickels to the office of mayor. Widely seen as one of the most environmentally progressive politicians in the country—he urged cities to voluntarily adopt Kyoto protocols after the Bush Administration vetoed the treaty—Nickels was able to forge (or perhaps force) an alliance between Seattle’s developers and environmentalists. He advocated transit-friendly, walkable urban villages as a way to save outlying lands from development; in exchange, he was willing to sacrifice some of downtown’s trees. Through his efforts, the city council extended the downtown building-height cap from 240 to 400 feet, allowing for the new crop of “tall and slender” residential high-rises. In a skyline crisscrossed by the inverted orange Ls of construction cranes, these gleaming new towers began to rise like crisp stacks of dollar bills.
Much of the construction was concentrated in South Lake Union, a moribund area of warehouses and car dealerships between the lake and downtown. (Bill Boeing built his first seaplane there in 1916.) Its transformation was a priority for Mayor Nickels, who hoped to use it as a magnet for the biotech industry. Vulcan Inc., owned by Microsoft co-founder (and now multibillionaire) Paul Allen, was and remains the area’s main development player despite its villainous-sounding name. It quietly bought up a critical mass of properties in the area in the late ’90s and early 2000s. In 2007, a Whole Foods and biodiesel station arrived in the neighborhood, and Microsoft announced that it would move some of its employees from Redmond to a new Vulcan building nearby. By year’s end, after a special ruling by the city council to adjust some of its building codes, Amazon decided to relocate its headquarters from the looming, fortress-like Pacific Medical Center on top of Beacon Hill to a 1.6 million square-foot Vulcan development. Shortly thereafter, a new streetcar line opened, Seattle’s first in over sixty-five years. The presence of this futuristic-looking orange and purple conveyance, which made no less than eleven stops in the half-developed neighborhood, looked to some like a symbol of the city’s willingness to prostitute itself to private interests. In addition to Vulcan’s contributions, the neighborhood required $1 billion in public investment, including $45 million for the streetcar, $6 million for a new waterfront park consisting mainly of a footbridge, and $200 million for a new electrical substation. When bicyclists (of which the city, despite its hills, has many) began to complain about the tracks causing accidents, a local cowboy singer wrote a song lampooning the “South Lake Union Trolley” as “a bump and grind machine”; a coffee stand offered tee-shirts reading “Ride the S.L.U.T.!”
A new resident of one of the high-rises told the Seattle Times that, looking out the window of her condo at the construction cranes, she felt like a pioneer.The neighborhood’s small residential area had once housed about nine hundred people, mostly artists and activists making below median wage. It included two hundred apartments for the homeless and mentally ill, co-op buildings, a soup kitchen, a women’s shelter, and a treatment program for homeless men. When the multimillion-dollar streetcar began running, the city decided to cancel $600,000 in funding for the Cascade People’s Center, a beloved volunteer-run community space that provided, among other things, free yoga classes, childcare, and a P-patch.
The April 2008 issue of Forbes included Seattle in its list of “recession-proof” cities, citing manufacturing growth, declining unemployment, and continued demand for products like those of Starbucks, Costco, and WaMu. Amazon and Microsoft were still hiring. But that May something strange began to happen—with three new condo buildings in progress in South Lake Union, Vulcan rolled out an incentive program, offering to pay part of the closing cost for current renters who’d like to buy. Across the city, other developers followed suit, offering prospective buyers cars, vacations, and Vespa scooters. The market for condos, it appeared, had stalled—Puget Sound Business Journal reported that while the number of listings had risen by 43 percent over the previous year, sales had decreased by the same percentage. My cousin moved into a building–the Aspira–which like most of the bright new residential towers had converted from condos to rentals for lack of sales. He estimates that it is still about half vacant. Even Microsoft decided against renting space in a second Vulcan building a few blocks away.
It got worse. Developers could no longer receive financing without showing that their units could sell. While visitors marveled that the city still had cranes up in the midst of a recession, gaping holes at street level where towers should have been bore witness to the stillbirth of Seattle’s new downtown. Developers also worried about WaMu, less as a source of financing than as a tenant—the bank leased about a million square feet of office space downtown in addition to its own forty-two story building. And by July 2008, WaMu’s stock had dropped to $5 dollars a share from $45 a year earlier.
An acquisition spree in the early 2000s and the decision to begin doing business outside Washington State had opened up the bank to the market for high-risk loans. By 2004, almost 60 percent of its loan holdings were risky adjustable rate mortgages, subprimes, and home equities. In keeping with Kerry Killinger’s plan to become the Wal-Mart of home loans, as well as with Seattle’s general commitment to equitability and inclusion, underwriters were told to make loans “work” regardless of a borrower’s ability to pay. As one appraiser who did business with WaMu later told the New York Times: “It was the Wild West. If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan.” “The Power of Yes” fueled WaMu’s transformation from a frumpy Northwest thrift—which only made loans to its own customers—to a national powerhouse, which may have made loans to the dead. Forbes dubbed it “the tallest midget in the world.” True to Seattle’s spirit of cockeyed optimism, WaMu kept most of these loans on its books—the feeling was that the bank could get out of whatever trouble it was in. Yet by mid-2008, a third of WaMu’s loans in the ten cities hardest hit by the mortgage crisis were in foreclosure, amounting to about $9.7 billion in problems. Forced to cover this, the bank posted a $7.9 billion loss in the first six months of 2008. My housemate Adam was a Financial Analysis Analyst—that was his title—at the bank. His job involved making models of the mortgage portfolio, and for months, each time he produced a model showing that the bank was running out of money, his superiors insisted it was wrong. Adam had signed a non-disclosure agreement, promising not to share what he discovered with coworkers, let alone with the news vans on death watch outside the bank’s downtown tower, and he kept mum—in fact, he estimates that only about half of the bank’s corporate employees understood the severity of the bank’s financial position—but there was no disguising the beating WaMu was taking on Wall Street. Beginning on September 15th, 2008, in an old-fashioned run on the bank, $16.7 billion was withdrawn by customers over ten days—about 9 percent of WaMu’s total deposits. The bank made round after round of layoffs. Even Kerry Killinger was fired, his portrait in the WaMu Center lobby replaced, according to the Stranger, by a picture of an abacus. It was actually a relief, Adam told me, when on the morning of September 25th he arrived at work to find fifty uniformed policemen waiting to escort the traders who worked on his floor out of the building. In the largest bank failure in American history, an illiquid Washington Mutual had been seized by the federal Office of Thrift Supervision and hastily sold to JPMorgan Chase. Its holding company filed for bankruptcy the next day.
Construction in Seattle, which had remained robust through November, dropped, as a local economic forecaster put it, “like a piece of concrete.” Home prices fell 30 percent and the region shed over 50,000 jobs. I was working at Pacific Science Center, a non-profit science education museum dependant on the largesse of corporations like WaMu; one of our board members had been a senior vice-president at the bank. With donations on the decline, and an expensive exhibit that failed to draw, the Science Center instituted a mandatory five-day furlough and a wage and hiring freeze. When that was not enough, it laid off 8 percent of its staff. Around the corner, the Seattle Repertory Theater closed its production of The Three Musketeers a week early. Restaurants shuttered at such a clip that it was hard to keep track—a local news channel reported that north of the city, the Shell Creek Grill & Wine Bar had instituted a pay-what-you-like policy to get customers in the door. Reportedly, Seattlites only gave themselves a 25 percent discount, on average, but it wasn’t enough to save Shell Creek. With WaMu, Seattle had lost a major civic sponsor: the annual Winterfest parade, the Westlake Center Christmas Tree, and the Fourth of July fireworks on Lake Union had all been on the bank’s dime. Now WaMu branches everywhere were covered in plastic banners with a picture of a “Hello I’m” name tag reading “becoming Chase.” The signs were supposed to look friendly, but as the city watched its basketball team—owned, then sold off by none other than Starbucks CEO Howard Schultz—leave for Oklahoma, these were little grand openings no one wanted to attend.
The other shoe was finally dropping for commercial real estate downtown. Chase’s purchase deal with the FDIC allowed it to break WaMu’s leases with impunity. When it did, vacancies doubled. The hardest hit by the loss was the Seattle Art Museum, from which WaMu rented eight floors in a building adjacent to its tower. The rent the museum collected went to pay off bonds issued to finance an ambitious 2007 expansion. Chase gave the museum $10 million to lessen the blow, but WaMu’s departure tore a $60 million hole in its budget. Today, two floors of SAM’s building remain vacant. Across the street, at The Lusty Lady peep show—which depended on WaMu in an altogether different way—the dancers shimmied their last this past summer. The Lady’s beloved marquee, a reliable source of smartly topical, smutty puns, bid the city farewell: “Thanks for the mammaries,” it said.
What had Seattle, so smart and steadfast, done to be laid so low? In the quiet after the financial and then literal blizzard of 2008, the city felt small—the warm conviviality of bars and coffee shops filled with fellow sufferers suddenly too particular to be represented by the seventeen thousand identical Starbucks stores our home had inflicted on the world. As we waited for snowplows to arrive from Oregon, Seattlites, at least for a minute, forgot about making it on a national scale and had to concentrate on getting things to work again here—if only a bus line or two.
Mayor Nickels came up for reelection in 2009 and received a strong challenge from two relative unknowns. Mike McGinn, an environmental attorney and former Sierra Club leader, campaigned from the left of Nickels; Joe Mallahan, a vice-president of T-Mobile, from the right. McGinn built a coalition around opposition to an expensive Nickels-backed tunnel that was to replace the above-ground Viaduct and open the waterfront to the people. McGinn agreed that while the Viaduct should indeed be torn down, traffic should be dispersed through existing surface roads. A rumpled, bearish redhead with a thick beard and freckles, McGinn became known for riding his bike to campaign events and relying mostly on volunteers. He had no campaign manager, wrote his own policy papers, and was outspent three-to-one by both Mallahan and Nickels. But Nickels didn’t even make it out of August’s primary. Blaming his loss on the city’s bitterness over the Sonics, the mishandling of December’s “snowpocalypse,” and the unpopularity of the tunnel proposal, the political establishment—including Washington’s governor—hastily lined up behind Mallahan. McGinn continued to hold a hard line on the Viaduct and on cutting car use wherever possible, even opposing a repeal of the unpopular “head tax” that charges businesses $25 for each employee who drives to work alone. Organized labor abandoned him in favor of the business candidate, but it didn’t matter; in November, voters handed McGinn a victory. Since then, however, the new mayor has not played Seattle’s usual game of nice: the city council ignores him, he and Governor Christine Gregoire are—officially—not on speaking terms, and many Seattleites consider him a blundering obstructionist who’s after their cars. The tunnel remains under debate.
Seattle filled its $12 million budget gap last year by cutting library and parks funding; in 2011, with a projected $56 million shortfall, cuts will be deeper. Some, like local columnist Knute Berger, believe the city will once again spite its soul to save its pocketbook. A new and controversial proposal would allow lighted signs on buildings—proof, according to Mayor McGinn, that Seattle is open for business. Current city council president Richard Conlin hopes that the city will pull itself out of hard times using its environmental agenda for job-creation, becoming, for instance, a center for wind and solar technology. (This winter, new solar-powered trash compactors replaced garbage cans downtown.) In the summer of 2009, two months after Hearst pulled the plug on the Seattle P-I, the first light rail line began operating between the airport and downtown. It was a big win for Nickels, who had pushed the project though, and for the city, which had been waiting for a new transit system for almost forty years. An extension of the line is now under construction. But the new manifestations of smart growth sweep away dirt in the same way as the old—along the light rail lines in the south of the city, bungalows and low-income housing are being replaced by multi-unit dwellings, pricing out former, often minority residents who commuted by car.
The new mayor has polarized Seattle, but some, like the self-proclaimed “lushes and potheads” at the Stranger, are charmed by his sourpuss. By admitting to “overwhelm” during this winter’s snowstorm (another!), dismissing a decision on the tunnel contract as “nothing to celebrate,” and publicly calling the governor a liar, McGinn, in his rough way, has provided a necessary correction to Seattle’s ever increasing emphasis on civility. Favoring expanded bar hours and the implementation of “liquor stickers” to allow would-be drunk drivers to park without fear of getting towed, he is a counterweight to the kind of Northwestern virtue—verging on self-righteousness—that could not conceive of a bank as “nice” as WaMu quaffing the Kool-Aid of sub-prime loans.
Closed as part of the recession’s cost-cutting, the Starbucks near my old house has since reopened under a different name. Now called 15th Avenue Coffee and Tea, it was the first of three Seattle Starbucks franchises to abandon the national branding in favor of a more local, faux-independent look. The siren logo is gone, as is the automatic espresso machine; the cafe serves wine and microbrews and saves its grounds for local composters. Seattleites cheerfully protested the shop’s opening as “local-washing,” as they will, but it’s hard not to admire the chutzpah of the thing. Yes, the shop and its salvaged wood may well be an admission of failure—of global ambition, of limitless growth, even of Seattle’s plucky, optimistic faith in its future. Looking at the shop from the Starbucks across 15th Avenue, though, you would never guess that’s what it was.