The Startup Hall Story—How it Could Transform Seattle’s U District
The second floor of what used to be known only as Condon Hall—and the University of Washington’s ugliest building—holds seeds of a re-invented neighborhood where students, researchers, and entrepreneurs learn, work, and live; where tech startups and established companies build businesses with the technology and talent flowing from the university; and where professionals zip to jobs downtown on light rail.
That neighborhood, still about a decade off if all goes as planned, is being shaped today. All around the newly renamed Startup Hall—now home of former South Lake Union denizens Techstars Seattle, UP Global, and Founders’ Co-op—cranes and construction workers are building new dorms and an expanded mass transit system worthy of a world-class city. City planners are working on recommendations for zoning changes that, if approved by the city council as soon as next spring, could encourage construction of not only much-needed new housing, but also retail and commercial spaces to accommodate companies that want to be within walking distance to the region’s foremost center of research and producer of talent.
This is Seattle’s newest innovation district, an example of the kind of neighborhoods that are being created or revitalized around the world through an intentional mix of physical, economic, and networking assets. The Brookings Institution, in a report earlier this year, defines them as “geographic areas where leading-edge anchor institutions [such as research universities and hospitals] and companies cluster and connect with startups, business incubators and accelerators. They are also physically compact, transit-accessible, and technically-wired and offer mixed-use housing, office, and retail.” Prominent examples include Kendall Square in Cambridge, MA, and the Cortex district of St. Louis, MO.
These districts are being designed in response to several big trends: Innovative companies and individuals want to be near sources of new ideas and each other. Their leaders feel an imperative to collaborate within and among organizations. People want to work and live in vibrant communities where they can easily walk or take public transportation.
All of this fits the vision many people hold for the University District—a 405-acre area bounded by Portage Bay, the main UW campus, Interstate 5, and Ravenna Boulevard. The U District Partnership boiled down that vision in their 2013 strategic plan as: “A vibrant and innovative district of entrepreneurs, major employers, talented workers and diverse residents.”
The Brookings report suggests that innovation districts offer solutions to a range of economic, social, and environmental ills, from inequality to suburban sprawl. A clear case can be made for the latter, but the idea that innovation districts in urban settings create opportunities for people in adjacent low-income neighborhoods should be balanced with the realities of rising housing prices that typically follow the influx of high-paying technology jobs. (Students are already lamenting the high cost of housing in the University District, but the city also is taking steps to require developers to pay for affordable housing.)
Setting aside the housing issue, Startup Hall is more than a modest first step toward encouraging the entrepreneurial mix desired by U District leaders.
Inside Condon’s drab concrete monolith, past the exhortation to “start something” freshly painted in green on the second floor wall, a surprising amount of natural light spills into the former law school library, where the founders of ten promising startups toil away at Ikea desks on what could be the next break-out app. On the other end of the open-plan space, UP Global employees coordinate Startup Weekend events around the world. There is a co-working space where small teams can rent a desk for $350 a month, along with meeting rooms, plywood-clad phone booths so private conversations don’t disrupt the productive quiet, and areas for ping-pong, video games, and other activities to blow-off steam and relax with colleagues. A Bernese Mountain Dog named FIFA all but insists you pet her. Nearby, Chris DeVore is barefoot at his stand-up desk.
DeVore, who manages to come across in conversation as simultaneously relaxed and intense, is partner at Founders’ Co-op, director of Techstars Seattle, and a key arranger of the unique deal that brought Startup Hall into being.
Techstars, UP Global, and Founders’ Co-op—three outfits with complementary missions that embody Seattle’s startup scene—used to be in the city’s other, globally famous innovation district, South Lake Union.
The first Techstars Seattle class, in 2010, was housed in a building on Boren Avenue; UP Global was in the basement, and later in a building across the street at risk of being torn down and redeveloped. They moved in before Amazon started to occupy the surrounding buildings, when there was still “a more interesting, diverse mix of physical spaces for startups” in the neighborhood, DeVore said.
South Lake Union thrives today with thousands of Amazon employees and a sometimes-overlooked cluster of researchers and professionals in life sciences and global health. There’s the Fred Hutchinson Cancer Research Institute, Battelle Seattle, major pieces of the University of Washington’s life sciences research, the Bill & Melinda Gates Foundation, the Seattle Biomedical Research Institute, PATH, and others. But the run-down warehouses and shabby, low-rent spaces that were attractive to startups have largely been replaced—or will be soon—with condos and office buildings.
DeVore, who also serves as chairman of the Seattle Economic Development Commission (EDC), calls this great for the city. “Totally excited about South Lake Union, but for us hoping to be a center of gravity in the grassroots innovation community, our community needs stuff a little scrappier,” DeVore said. “They need Class B and C space. They need smaller footprints.”
The transformation of South Lake Union into an urban corporate headquarters campus for Amazon also put a damper on things like inter-organization networking and collaboration that innovation districts try to foster. “Amazon has been an incredibly powerful engine of excellence and recruiting of talent in the city, but Amazon as a company is a little bit of a fortress,” DeVore said. “They’re very secretive. All the buildings are badge-access only, so unless you have friends at Amazon, it’s not a very porous community.”
The company’s Amazon Web Services group, which competes to provide computing infrastructure to startups, is more open. “But in general, our organic interchange with Amazon, despite being co-located with them, was very small,” DeVore said.
With their lease coming up for renewal in August, the Techstars Seattle and Founders’ Co-op team was out looking for new digs that it could again share with UP Global. Meanwhile, DeVore, through his service on the Seattle EDC, had become familiar with various city and business leaders’ aspirations for economic development, and with the University of Washington’s goals for the University District neighborhood in particular.
“It became clear that the interests of the university and the city and us in the innovation community were very aligned around how we increase organic interchange amongst practitioners, academics, investors, et cetera,” DeVore said, “and if we’re going to do that in an organic way, where can we do that?”
The challenge for commercial tenants looking for even modest offices near the UW has been—and remains, for now—a lack of available space. The neighborhood is characterized by a patchwork of land ownership, as compared to South Lake Union where Microsoft co-founder Paul Allen’s Vulcan Real Estate amassed block upon block, and had the financial wherewithal to develop it en masse.
DeVore credits UW chief real estate officer Todd Timberlake for suggesting Condon Hall, which holds classrooms, a variety of student government and university services offices, and serves as the temporary home for departments whose buildings are being renovated. The idea was to use Condon “as a kind of landing pad for innovation activity in the neighborhood as a way to catalyze a longer-term transformation,” DeVore said. It was not an obvious idea, and it took “a little bit of a leap of faith” for all involved, he added.
“The U stretched themselves on how do they engage with a commercial tenant in a campus building. We stretched ourselves and our people, to be like, Hey, we’re going to go to the U District, and no, there’s not a center of gravity yet, but we’re going to make one, and we’re going to be founders of this new community,” DeVore said.
The lease agreement is modeled more on other urban co-working and startup spaces such as 1871 in Chicago and 1776 in Washington, D.C., than on past academic real estate partnerships, DeVore said. The UW, of course, is the owner and master lease-holder, and UW Real Estate manages the co-working space, with input from an advisory committee including DeVore and UP Global’s Dave Parker. “We are helping market and curate the companies that would be in the space, but it’s not our call. It’s up to UW Real Estate,” DeVore said, adding that it has to make economic sense for the university.
That said, there is no explicit focus on UW spinout companies or technologies at Startup Hall. “We were very careful and the U was very careful to not paint this thing purple and gold,” DeVore said. “They have their commercialization function. They have Fluke Hall, which is for university innovation. This is not that. We are in partnership with the university, but not in service to the university, other than we have an alignment of values and interests.”
DeVore is the first to acknowledge that the current collection of startups and startup supporters in a surplus building is a long way from a thriving innovation district, but he’s encouraged by the early response. Since Startup Hall officially opened for business last month, hundreds of visitors have come to open house events. Startups Wovn Energy, Stabilitas Ventures, and Pryvy—with a total of six people—are renting co-working space, Nathan Daum, startup manager with the UW, said via e-mail. And more want in. “Our early interest list outstrips the total 60 desks we have available,” he added. Groups including the Alliance of Angels and city of Seattle startup liason Rebecca Lovell are holding regular office hours. Dozens of meetups, lectures, workshops, and hackathons are filling Startup Hall’s event spaces this fall.
“Students are coming, department heads are coming, commercialization leadership is coming, as well as folks from the city—journalists are here and investors are here,” DeVore said. “So there is a palpable sense of enthusiasm and excitement about this potential new center of gravity for innovation activity in the city.”
And, he noted, the transition is helped by strong macro-economic forces, such as zoning changes as soon as next summer that could allow taller buildings and denser development if the city council approves. Also, the arrival of Link Light Rail service at Husky Stadium in 2016 will connect the UW to the rest of the city, with a second stop in the heart of the U District expected in 2021. “It’s hard to argue with the structural fundamentals,” DeVore said.
For the UW, which is embarking on a new effort to inject more innovation and entrepreneurship education into its curriculum, Startup Hall represents an important new asset.
“The fact that we have professional organizations coming in who can teach entrepreneurs and students how to actually run startups and make them professional, that’s fantastic,” said UW vice provost of innovation Vikram Jandhyala. “That’s the kind of learning and training we want students to be around, whether officially part of the program, or if they [just] get to walk through Startup Hall, talk to people, see the energy.”
Jandhyala plans to bring in students from his new experimental course on team software development “to see how it’s done in the real world,” he said.
DeVore said the strengths and needs of the startup community and the university complement each other well. “Talent is the most important ingredient for building an innovation company, and the U is the most open platform for pulling in and developing talent in the Northwest,” he said.
He added, “We are serving [Jandhyala’s innovation] agenda by finding ways to pull specific departments off campus—or to the edge of campus—and give them an open door that mixes academic innovation with commercial innovation, physically housed in Startup Hall.”