For many small businesses built on a clientele of Amazon workers in South Lake Union and the Denny Regrade, their absence for the remainder of the year could be an existential threat.
It’s as if the neighborhoods surrounding one of America’s densest urban corporate headquarters have been sucked back a decade in a matter of months, to a time before some 50,000 well-paid Amazon employees streamed in each day, grabbing morning coffee or hitting the gym for a before-work sweat, swarming the streets in search of lunch and gathering over happy hour drinks.
Sales have plunged, but for most, the rent is still due.
Amazon has allowed its corporate employees to work from home since early March, though some choose to work in its offices or have roles that require it. The number coming in each day varies, a spokesperson said.
The company’s extension of the work-from-home policy this week to Jan. 8 upends the already tenuous coronavirus survival strategies that nearby small businesses have cobbled together with a mix of loans, grants and some rent relief (including from Amazon itself) and drastically revamped operations.
“There is no vibrancy, no energy and no livelihood without the Amazon employees,” said Di, who helps run her family’s two restaurants near the company’s headquarters buildings. She asked that her family’s name not be used. (“It’s a sore subject to bring out to the public and puts us in a very vulnerable position,” she explained.)
She pointed to Tom Douglas’ decision to close two restaurants frequented by Amazon employees. “If such a famous restaurant group is encountering struggles, imagine small business owners,” she said.
Di’s parents, Vietnamese refugees who came to the U.S. in the 1980s, both now in their 60s, have overcome more than a little adversity. They opened Mala Satay on Fairview Avenue during the 2019 snowstorms, but soon developed a regular crowd of lunching Amazon coders and corporate workers. They closed temporarily in March as sales evaporated, and to protect their health, reopening at the beginning of July.
Neighborhood residents and construction workers have flocked back. Grants from Amazon and the city of Seattle helped too, but without the Amazon trade there isn’t enough business to justify the cost of operating for lunch, said Di.
The family is examining whether a dinner service makes sense, while also adjusting operations at their other location, Meekong Bar in Belltown, as the rising number of COVID-19 cases recently has depressed sales there. They reopened Meekong Bar in April, hoping to generate enough revenue to cover their rent at both locations, forgoing any salary for the family. “It was definitely wishful thinking,” she said, adding that they’ve pleaded with landlords for rent relief and still await their decisions.
Jessica Notman, owner of Emerald City Pilates, had to lay off her four instructors who gave one-on-one lessons at her 500-square-foot studio on Fifth Avenue. After 10 years in business, the last five just a few blocks from the seat of the commerce and technology empire, she has a loyal customer base — including about half who are Amazon employees or their spouses. They have kept coming to her, maintaining enough business to support her as a sole proprietor.
Notman has benefited from a grant from Amazon — part of some $11 million in rent relief and grants the company says it has given to 900 small businesses surrounding its offices in Seattle and downtown Bellevue — as well as federal coronavirus relief loans. (An Amazon spokesperson said its grants have all been allocated; rent relief to tenants of its buildings is being extended to a fifth month.)
“I would be sweating it more with Amazon not coming back had I not gotten those,” Notman said. “I’ve been lucking out.”
She was watching the pandemic worsen in recent weeks and already bracing for an extension of work-from-home policies, confirmed by Amazon on Wednesday.
“I wasn’t really surprised by it,” she said. “Now, everybody is realizing this is going to be a long game. … I’ve already been in that mindset of Amazon’s not coming back for a long time.”
With operations adjusted to meet reopening requirements — masks, temperature checks, risk disclosure forms — she’s looking ahead to the winter and exploring ways to keep the studio a comfortable temperature with the windows open to fresh air.
She lives in the neighborhood, and notices the emptiness as she walks her dogs, Tucker and Freckles, Pomeranian and Great Pyrenees, respectively.
In the absence of Amazon workers, people living unsheltered or struggling with mental health issues are more visible. “It’s a little wilder in that sense, which is not the most comfortable feeling,” Notman said. “There’s definitely areas that I’m more cautious about than I used to be with less people around.”
While the streets felt desolate in spring, the area’s growing number of residents have come out more with the onset of summer weather, said Curt Archambault, who has lived with his wife in a condo at 2200 Westlake for about 11 years.
The development of that project, with its ground-floor Whole Foods Market and tony Pan Pacific Hotel, marked the start of a new era for a neighborhood that was previously home to old warehouses and commercial laundry buildings with abundant street parking and few places to eat.
There are roughly 12,000 residences in South Lake Union and the Regrade, housing about 21,500 people, according to an analysis from commercial real estate brokerages and 2018 census figures. Amazon says some 15% of its corporate employees live in the same ZIP code where they work.
Archambault said the quiet of the streets this spring reminded him of the neighborhood when he first moved in. “I remember what it was like — limited options for dining and other activities,” he said. “I don’t want it to go back to those days.”
Archambault, who also serves on the board of the South Lake Union Chamber of Commerce, said that while he and his wife remain leery of dining indoors, they have been frequenting local restaurants for takeout, walking to get it themselves whenever possible so that more money goes directly to the businesses rather than to delivery services.
“I feel obligated as a resident to help them as much as I can,” he said.
Archambault said Amazon has been working with the chamber, and is well aware of the challenges of the work-from-home extension on local businesses. A company spokesperson said Amazon is offering small businesses social media training, marketing their services to residents of nearby residential buildings and piloting a free restaurant delivery service, in addition to the financial support.
Amazon sees retail and restaurant tenants in their buildings “as amenities, not profit centers,” said Marc Chatalas, who co-owns the local Cactus restaurants with his brother, Bret. While many tech employers offer free, often lavish, food to employees in corporate cafeterias, Amazon does not, instead building space for restaurants and coffee shops into its buildings.
The Chatalas brothers opened their location in the heart of Amazon’s South Lake Union headquarters, now one of six in the region, in November 2011. In the early years, Marc Chatalas estimated 95% of their business came from the company. Having made it through the disruptions of the neighborhood’s construction boom, and with growing sales to people living nearby, “the prospect for 2020 was positive,” he said. Now, “we are simply hanging on, hoping to live to fight another day.”
As COVID-19 has ravaged the restaurant business, Amazon has “become the gold standard for what it means to be a collaborative and supportive landlord,” Chatalas said, adding that his company has benefited from both a grant and rent abatement from Amazon. “Sadly, very few landlords are offering meaningful help to small businesses, and the impact is going to be more dramatic than I think anyone realizes. These same landlords are going to have to retenant their spaces as we are all going to go broke.”
Seattle Times business reporter Katherine Khashimova Long contributed to this report.