Skip ads and navigation
Advertising
Our network sites seattlepi.comHelp

Digital economy may spark Tacoma's renaissance

Wednesday, August 16, 2000

By JOHN COOK
SEATTLE POST-INTELLIGENCER REPORTER

Before Pringles became a snack-food sensation, Mitch Ratcliffe remembers munching on the salty potato chips at his grandparents' home in Evansville, Ind. Like many Midwestern cities, the sleepy town on the banks of the Ohio River was frequently chosen as a testing ground for new products.

Ratcliffe believes Tacoma, the industrial city known for its infamous aroma, could have a similar role in the new economy.

  Photo
  Downtown Tacoma, looking north on Pacific Avenue. Cheap rents, less traffic, low housing costs and high technology have set the city buzzing. Phil H. Webber/P-I
With a publicly funded $100 million fiber optic network that links businesses and homes with super-fast Internet connections, Ratcliffe says Tacoma "is one of the best test beds on Earth for trying to figure out what a broad-band business looks like."

That's part of the reason the 39-year-old San Francisco technology executive chose the city as the site for his new venture capital business: Big Garden Ventures.

He is not the only one re-discovering Tacoma.

AtomicTangerine, a Silicon Valley venture capital consulting firm and Internet incubator, already employs 25 people in new offices on South Ninth Street. Lguide.com, a venture- backed start-up founded in Olympia last year, moved its headquarters to South Pine Street in July. And the Washington Software Alliance plans to start a South Sound chapter this week.

About 100 start-up technology companies have set up shop in Tacoma in the past 18 months, causing some of the locals to nickname major thoroughfare Commerce Street, e-Commerce Street. Even Amazon.com has discovered the city, establishing a call center in the south part of town nine months ago.

The rebirth of Tacoma has been talked about for years. But some in the City of Destiny say the transformation is finally occurring, thanks in part to the digital economy.

"Five years ago you could walk down the street and every other window was empty," said Ratcliffe, whose business portfolio includes LoudVox Productions and LoanTek. "Today we have two class A office buildings going up, and most of the existing office buildings are full."

Lease rates still fall well below that of Bellevue, Redmond and Seattle, an attractive perk for Internet start-ups looking to preserve cash. What's more, traffic congestion, parking and housing costs are nowhere near the levels of Seattle or the Eastside. Combine those benefits with a city government that bends over backwards for new enterprises and you have ingredients for a new high-tech hotbed.

"When you try opening an office in Redmond they just want to give you grief about putting in parking," says Bill Towey, co-founder of Tacoma Venture Partners, whose firm has backed a few south Sound start-ups. "If you come down to Tacoma they will say, 'How do we fix the road for you?' and the mayor will show up to welcome you."

Map

Juli Wilkerson, Tacoma's director of economic development, has played an important role in jump-starting the once stagnant city. She energetically ticks off a half dozen publicly funded projects -- from a new convention center and art museum to a multimillion-dollar cleanup of the waterfront -- as indicators that Tacoma's revival is for real.

Although she admits that cheap rents and Seattle's "overflow" have been drivers of the new technology businesses, Wilkerson also is quick to emphasize the $100 million fiber optic backbone that the City of Tacoma decided to build in 1997. Known as the Click! Network, the high-speed network connects every city block and alley with the equivalent of a T3 line. (A T3 line is capable of transmitting 45 million bits per second, the equivalent of 672 regular voice-grade telephone lines.)

"The 100 start-ups are telling us that they are here because of the Click! Network," said Wilkerson, who plans to begin aggressively promoting Tacoma as "America's No. 1 Wired City" this fall in business publications and newspapers.

The fiber-optic backbone played an important part in AtomicTangerine's decision to choose Tacoma over Seattle last month, said Diane Kegley, chief marketing officer at the Menlo Park, Calif.-based company.

"It makes establishing a business that much easier when you don't have to worry about getting a big (fiber-optic) pipe into a building," Kegley said. (Incidentally, she said the firm is still waiting to get a high-speed Internet connection in its San Francisco office.)

Chris Hedrick, chief executive of Lguide.com, said hooking up to the Click! Network was a breeze and one of the determining factors in deciding to consolidate operations near the University of Puget Sound.

"The city was very easy to work with," said Hedrick, former technology policy adviser to Gov. Gary Locke. "It was an enormous difference compared to our relationship with US West in Olympia, which had all sorts of problems."

Despite all of the activity, Tacoma still has a way to go before it becomes a technology hub. About 22 percent of Tacoma's work force commutes to Seattle. Also, there is not a high-tech anchor tenant like Microsoft, RealNetworks or InfoSpace that could spawn other businesses.

When asked what's missing from the city's technology community, Wilkerson is quick to point out the lack of venture capital.

"We are starting to get some firms that do angel money or seed money," she said. "But venture capital has been a slower start for us."

Another roadblock could be convincing 25-year-old techies that Tacoma is a hip place to live. Wilkerson says the city is starting to develop a night life with jazz clubs and other activities for younger workers. And she said the city is benefiting from the University of Washington's branch campus and new housing units in the downtown core.

Hedrick, whose firm employs 25, believes Tacoma is a good place to start a young company.

"There are 10 good restaurants within walking distance and parking is free," Hedrick said. In terms of quality of life, you can't beat it, he said.

Although the economic prosperity of Seattle has taken awhile to creep into Pierce County, Wilkerson said after years of work it is finally happening. The way she sees it, Tacoma will be a totally different city in three years.

To celebrate Tacoma's tech revival, the Washington Software Alliance will host a launch party tomorrow at the Point Defiance Zoo and Aquarium with U.S. Sens. Slade Gorton and Patty Murray and other government leaders. On Aug. 24, the Tacoma Chamber of Commerce will celebrate its first annual "E-Business Day," and citizens will be able to visit newly renovated buildings, tour dot-com businesses and attend a gala at the Tacoma Club. For more information on the events, visit www.wsa1.org or www.ebusinessday.org.

P-I reporter John Cook can be reached at 206-448-8075 or johncook@seattle-pi.com

OUR AFFILIATES
NWsource KOMO
Pacific Publishing

Seattle Post-Intelligencer
101 Elliott Ave. W.
Seattle, WA 98119
(206) 448-8000

Home Delivery: (206) 464-2121 or (800) 542-0820
seattlepi.com serves about 1.7 million unique visitors
and 30 million page views each month.

Send comments to newmedia@seattlepi.com
Send investigative tips to iteam@seattlepi.com
©1996-2008 Seattle Post-Intelligencer
Terms of Use/Privacy Policy

Hearst Newspapers