Liz Dunn at the Cloud Room.
I knew Liz Dunn a bit while we were both at Microsoft in the 90s, mostly as a passerby in the sterile hallways. When she retired from software, she pursued a passion for sustainable architectural rehabilitation. She launched Dunn & Hobbes, specializing in new-build urban infill projects, and adaptive reuse of character buildings left over from Seattle’s sometimes gritty past.
I recently stopped by one of Liz’s latest innovations, The Cloud Room, a membership-based shared office and social club, in one of her real estate projects on Capitol Hill called Chop House Row, and asked a few questions about the city she adopted and helped author into something exceptional.
Richard:
Seattle seems to have emerged, sort of unpredictably, just in the last few years, as a world leader in many different aspects. It's a leader in technology, philanthropy, in social initiatives, hospitality, architecture, and in many other ways. You've been here for 30 years. What do you think are the elements that somehow coalesced to make all this happen?
Liz:
That's a great question, and I think about it a lot. I think every success story is a combination of strategy, circumstances, and luck, and that's probably true in the case of Seattle. It's a beautiful place, as we all know, so I think looking back to when I arrived along with a bunch of my very young Microsoft colleagues, that was probably a major attraction.
The natural environment is a huge asset, but then the real story is the people-- the people who were born here, and the people who arrived as transplants and brought fresh ideas and an incredible amount of talent. In part, we have our tech industry to thank for this, at least in the early years, but there's so much diversity of entrepreneurship right now, it is everything from the art world, to design, to biotech, to food and beverage, and I think that talent attracts talent.
One of the things I like to say is that Seattle's kind of a sticky place. I know a number of people, including myself, who have tried to achieve escape velocity, who have gone and lived in another city for a couple years--- I've done that three times--but always end up coming back. Sometimes you need to just get away from a place to really fully appreciate its attributes, and so I love Seattle. I feel like I can do everything that I am passionate about successfully here, and in fact, it's an amazing platform. It's really come into its own, as you said, over the last five years. But that sort of platform has roots going back many years.
Richard:
Seattle seems almost like an incubator, where people come with their ideas to seek validation and support.
Liz:
Seattle is the perfect size to be able to make those connections. It's a city where entrepreneurs actually know each other. It's not just a town, it's a real city, where people from very different fields really do end up crossing paths.
Richard:
Seattle seems not afraid of failure. It encourages risk, and doesn't punish failure, and that's unusual. That breaks away from a lot of traditional cultures. You're never going to find an Internet startup in Saudi Arabia. Most governments are risk-averse. They're run by fear, but here the opposite is the norm, and the city has been, I think, rewarded for this approach. Why has a culture of experimentation and fearlessness developed here?
Liz:
I think if we go back to the idea of Seattle being a great platform for entrepreneurship, we see that "platform" implies support, and there's something very empathetic and supportive about the business climate in Seattle, even as compared to other entrepreneurial cities, such as San Francisco, L.A., or New York. There's something about the history of this city, with its provincial, community-oriented roots. It hasn't been a big city for all that long, and so that home-grown past still surfaces in all kinds of ways. We hear a lot about Seattle being too nice, but I think the way that manifests itself is by being a very accepting, welcoming place, forgiving of mistakes.
Richard:
And tolerant.
Liz:
Tolerant, very tolerant. There's just this absence of that sort of cutthroat environment, where people rejoice in other people's failures. In some of our more competitive cities there's just a little too much "me first" at the expense of the guy next to me. Seattle is a very collaborative place. I think it's easy to be brave. I will give you a specific example from the business I've built here. I often joke that I knew nothing about real estate development when I started my company. I was brave, but naïve. I had a passion for design and a passion for urbanism, and in Seattle I perceived an opportunity to make a difference, because it was at a very nascent stage of re-urbanization. A lot of cities have been re-urbanizing, and when I moved to Seattle, and particularly when I pivoted careers about 20 years ago, it was really the moment when Seattle was just starting to look at itself as a re-urbanizing city or a re-densifying city. I always say that I would never have been able to start a successful real estate business in one of those larger, more cutthroat cities, because there are a lot of hidden systems and subterfuges that I just wouldn't have understood.
One of the things I love about Seattle is that it's pretty squeaky clean. I mean, yeah, we have a lot of public process, but boy, it's a thoughtful city, and it's got a lot of integrity. If you are operating as an entrepreneur in a city that fundamentally has integrity, from its elected officials on down to its business community, you are going to be braver, because you know at least you're playing by the same set of rules as everybody else, and so it's just a safer place to take risks. I feel very fortunate, because I showed up at Microsoft when I was very young. It was also a very safe place to take risks. We were pushed to work really hard, but we were absolutely encouraged to push in whatever direction we thought was appropriate.
Richard:
At Microsoft, that came from the top.
Liz:
It came from the top, for sure. I think it was the most amazing training for me, for life. I'm so grateful for the time I spent at Microsoft, because at the age of 22 I was thrown into the deep end, and boy did I learn to swim. The decisions I got to make, and the work I got to do, were incredible. I feel like it accelerated my career 20 years, in some ways, compared to other jobs I might have landed in right out of college. The Microsoft culture was kind of reflective of the Seattle culture that I'm trying to describe, which is one of both safety and taking risks, trying new things. We're not afraid to experiment in this city.
Richard:
You pivoted into a career known for its closed systems and its old-boy network. You're Canadian, you're a woman, you're young, you're inexperienced, yet somehow you were able to make all this happen.
Liz:
I never felt like those were barriers or problems here. In a different city, I might have. I never really had to think about it. I feel very fortunate, because I know people encounter those as real barriers in lots of scenarios.
Richard:
You also touched upon how the city takes care of its community and its members, and how success has nurtured a sense of responsibility to the whole city. It feels like Seattle is on the leading edge of a lot of social reform. Everything from minimum wage to gay marriage, to even the marijuana laws, and other things that much of the rest of the world scoffs at. But Seattle made those decisions, and they seem to be working.
Liz:
The people who accrued and generated wealth here just seem to have a sense of responsibility around reinvesting in the community, and I mean at the philanthropic level, at the venture capital level, and more generally, the political level, the policy level.
We’ve seen serial entrepreneurial efforts by the same people. Rather than just accumulating wealth and sitting back and drinking margaritas on the beach all day, that wealth is actively invested into new ventures, new companies, new ideas. Everything from space travel to just phenomenal food and beverage establishments are on the table here. There's experimentation everywhere you look.
Richard:
In Los Angeles, where I now live, the goal seems to be to showcase wealth as much as possible, to be as flashy as possible, ostentatious and loud. The Seattle culture seems to be the opposite. The people here who achieve a measure of success are understated. They would rather use their money to invest in something that makes a difference.
Liz:
I'm able to recruit investors to my projects who could put their money into any real estate venture, but they like the fact that what I do is very local. I try to do things that are uniquely designed, that preserve some of the character of the city, or create new character, and so, I would like to believe I play a positive role in how we re-urbanize Seattle. I think my investors are activist investors. They're choosing to invest with me because there is an agenda layered onto what I do. It's not just about building space. If we build an office building, it's for a specific, innovative kind of tenant that we think is going to add something to this city. I'd like to think it's a very regenerative cycle.
Richard:
How do you think geography plays into Seattle’s emergence as a world leader? It's surrounded by mountains, oceans, clear lakes, clean rivers, and this allows people to spend a lot of their leisure time outdoors, in active pursuits. This has been cited as the most physically fit city in the country, and for good reason. That, perhaps, gives a balance to body and mind, and maybe helps not only the creative juices flow, but the enterprise energy and maybe the happiness level.
Liz:
I do think the physical environment takes some of that dog-eat-dog pressure off. It does give people a respite from work, work, work, success, success. I will say that geography has played one moderating role, which I can't tell if it's good or bad, but it has created a delay. We have a very fractured geography within the city. I can't think of any other city that's got so many bodies of water, massive hills, freeways built in the 1950s that cut scars and disconnect neighborhood from neighborhood. And we are just starting to figure out how to heal some of those geographical disconnects. I think our challenging geography slowed certain kinds of re-urbanization. It kept us from developing a really robust transportation system in the same timeframe as other cities. But I think in the long run we were able to learn from the mistakes of some cities that went first. We're thoughtful people here, and we are learners.
Richard:
It reminds me a little of the success of places like Switzerland and Costa Rica, with their systems of direct democracy. Rather than a flat landscape where an outer lord might have come in-- the Habsburgs of Central Europe, for instance -- and turned the land into an agricultural serfdom, owning the people and their crops, the hills and valleys kept out certain types, and compelled residents to communicate and cooperate with one other. As a result, the land never turned into a monoculture. Diversity is a big part of the story here, I think.
Liz:
Some people call Seattle the city of neighborhoods, because each neighborhood has such a distinct identity, and I think that's partly because it is a city that is a bit geographically disconnected. You have to find one of the four bridges to get north of the ship canal. I think we need to celebrate that diversity, and preserve some of it, as we further urbanize. Interesting challenge, I will tell you, and that's the kind of thing I spend a lot of time thinking about.
Richard:
Let's talk about your initiatives, what you've been doing with urban graying and sustainability. You understand the qualities of old buildings, and also the ways to modernize them, and how to integrate to get the best of both, is that correct?
Liz:
Yup. I think Seattle's urbanization effort was somewhat delayed, compared to Toronto, where I came from, for example, but I've been able to focus a lot in the Capitol Hill neighborhood, and a part of the Capitol Hill neighborhood which had a great stock of old industrial auto row buildings, and again, my timing was very fortunate, because I arrived on the development scene at a moment when all those buildings were still sitting somewhat untouched, but something was about to happen. Sometimes I call it "teaching old dogs new tricks,” figuring out how to repurpose those buildings, rather than just tearing them down and building some homogeneous, cookie-cutter development-- which we see a lot of in every city in America. How do you keep the character? How do you keep the spice, the uniqueness, in a neighborhood?
I'm not a sentimental preservationist; in fact, I'm not a preservationist at all. I just fundamentally believe in the design value of these older structures, and that exciting vibe that keeping the old structure injects into the new project. It just makes it more interesting. I find it easier to find really interesting, innovative tenants for these old spaces. They like them better, because they feel that vibe of history and creativity that comes with age. But I'm not the least bit sentimental about trying to restore buildings to their perfect previous condition. We do crazy things with some of our buildings. We take pieces of roof off; we build stories on top of them. At this particular project, Chop House Row, where we are today, we peeled the roof and walls out of one whole bay of the building and turned it into an outdoor alley instead of an indoor space. We're always looking for the best way a particular building can be used to serve some new tenant.
Richard:
I remember when this was auto row. It was really grungy. It was really not a happy place. You've turned it into a neighborhood that is alluring; people want to come here, and want to eat at the restaurants, and use the spaces. But you've also seen real estate prices ratchet up, and the economies of the areas that you've touched have been vastly improved because of your vision and your efforts.
Liz:
So much so that I start to worry a bit, now, that we've kind of hit that cusp of gentrification, where some of the more creative users may be priced out. I'm on a Mayor's Task Force right now, trying to understand and tackle that problem. You want to keep those users, those creative, commercial users, in the neighborhood, doing their thing, and that is the double-edged sword of a successful city.
Richard:
Many cities, as they develop, have no priority on sustainability. It's all about the quarterly returns, and it's all about "How do we deal with our immediate problems?" Sustainability is a luxury for a lot of people, but you have always thought about, I believe, sustainability in what you've done. How did you get to that point, and are you representative of the city?
Liz:
Maybe it's a coincidence, but there are a bunch of like-minded people here, who truly are concerned about climate change, and are truly committed to sustainable solutions, and so I do think we have one of the more progressive real estate communities in the entire country. Sometimes we're swimming upstream compared to what's going on in the rest of the country, because we're trying to push the envelope on policy.
It speaks to the depth of the community here. Maybe it fits back to this idea of Seattle being just the right size city in which to find some coherence, consistency, and consensus. Certainly, in a city that's as physically beautiful as this, you're more aware of what we stand to lose.
Richard:
What is sustainable design?
Liz:
I would define it a little bit differently than a lot of people, because I'm very committed to reusing the buildings we have. If you look at the life cycle and the embodied energy that is thrown away when we demolish a building, it is astounding. That's something that is not as well-understood as it should be, shockingly, and so I think that combined with the mere fact that urbanization and walkability massively reduces our need for power and transportation, the best thing we can do for our world, and to prevent climate change, is to build thriving cities. It's not just about density. This is the last point I'll make, because I've been a pro-density advocate from the very beginning of my career, but it's about density that makes people want to come and stay. That requires not just raw square footage, but an amazing amount of character, and amenity value, and design appeal.
It's got to have meaning, just like Seattle.