Times Staff ReporterHerman Sarkowsky is a conservative, unemotional and at times bloodless businessman, “a man of incomparable business acumen,” one rival says, who has demonstrated an ability to make money, even when he isn’t trying, that borders on the eerie.
Sarkowsky says much of his ability is not calculated, it’s intuitive. At some level, this must be exciting – neurons whizzing all over the place, assessing and probing, accepting and rejecting – but Sarkowsky’s expression of the synaptic hubbub, his language and face, remain as laconic as an accountant’s. He retreats into the far reaches of an armchair and barely moves when he speaks. Even close associates find it impossible to determine what’s going on behind the poker face.
“He’s a good gambler. You don’t know if he’s won or lost,” says Faye Sarkowsky, Herman’s wife. Faye says there is a telltale “Sarkowsky smirk” when something pleases Herman, but it is so imperceptible that no one outside the family has ever reported a sighting.
Ten years ago this winter, Sarkowsky entrusted Fred Bassetti with what would eventually amount to $200 million of his and other people’s money, and asked him to design a skyscraper.
Bassetti was then a 62-year-old Seattle architect with the innocence of an 8-year-old and the energy of an adolescent. The only thing that has changed since is Bassetti’s age. He is as voluble and open as Sarkowsky is reserved. If you can’t tell whether Bassetti has won or lost, one or the other of you is dead.
“Fred sort of hits a wall, rebounds, then hits the other wall,” says Phillip “Skip” Norton, his partner.
Karlis Rekevics, another partner, says: “Once he’s said something, there is no way to talk him out of it. It can be frustrating, it can be humorous. Overall, it’s pretty exciting to work around him, even if it means you don’t speak to each other for months at a time.”
Bassetti is passionate, his ideas deeply held and richly delivered.
“I can’t tell you the contempt I feel,” Bassetti will say, beginning a critique of 20th century architecture that, left unfettered, will go on to include allusions to Hitler, Hamlet and pancake makeup.
“Well,” another conversation begins, “I fell in love over the weekend.”
This sort of psychological disrobing led one of Sarkowsky’s bankers to lament in print that Bassetti was “off the wall.” After quizzing a dozen people to find out what this meant, Bassetti concluded it was good.
“At least he didn’t say I was over the hill,” Bassetti said, and promptly ordered a set of vanity license plates inscribed OFFTHWL, a badge of enduring Bohemian artistry the sincerity of which is difficult to question.
“Fred’s architecture is a search for truth,” says one longtime associate.
Therein lies one of the wonders of contemporary city-building. It is carried in trains on separate tracks, defined by the developer’s search for money on one rail and the architect’s search for truth on the other.THE INTERVIEW
A large display board at the offices of Bassetti, Norton, Metler, Rekevics notes the status of each project the firm is working on: A school is being bid; a house designed; a small office building built.
The status of the 62-story AT&T Gateway Tower, the biggest, most expensive and longest-lived project in the firm’s history, is described less specifically.
“Gateway:” someone has scrawled, “The Saga Continues.”
The Gateway project went on BNMR’s boards a decade ago when the firm, in the person of Bassetti, was invited to interview for the job. BNMR was one of four firms Sarkowsky asked to make proposals for an office building at Sixth Avenue and Columbia Street in downtown Seattle.
Two other local firms, NBBJ and TRA, were also on Sarkowsky’s “short list” for what was a very vague project. All were selected because of their local prominence and availability. Besides the locals, Sarkowsky interviewed architects from 3D/International, a Texas company with an office in Seattle. 3D/I was invited because the company had just finished designing Seafirst Fifth Avenue Plaza across from Sarkowsky’s property. Rumors hinted that Seafirst Bank needed still more space, and Sarkowsky thought 3D/I’s past work for the bank might help lure it into his building.
The architects’ presentations were not formal designs. No one actually had a building in mind yet. To a large extent, Sarkowsky did not know even what zoning laws would allow. That was partly why he needed to hire an architect – to determine what was possible, then begin slogging through the city permit process.
The presentations dealt less with a building that would be built than with buildings that had been built – in essence, discussions of the architects’ resumes.
TRA, it turned out, was not nearly finished with One Union Square, a high-rise being built by Unico Properties, and was quickly eliminated. Bill Bain, a partner in NBBJ, showed up with “three or four guys in beards, corduroy jackets and desert boots,” and made a thoroughly “underwhelming presentation,” according to one person who was there. It, too, was eliminated.
That left 3D/I and Bassetti. Dick Krutze, a 3D/I vice president, wasn’t particularly inspiring in his presentation, but 3D/I’s people seldom were. The firm was not in the inspiration business. It had a reputation as a developer’s architect: Produce a straightforward design; get in, get it built, and get out.
Its management expertise and the connection to Seafirst were valuable to Sarkowsky, who was inclined to hire the company but was unsure of its design abilities. Additionally, although 3D/I had a local office, it was not a local firm. It had little of the community presence that was important to Sarkowsky, who moved in Seattle’s highest social circles.
BNMR, on the other hand, was entirely local. And if it was inspiration you wanted, well, Bassetti on his best days could make you believe he was building a stairway to heaven. Bassetti was highly regarded as a designer, frequently honored by his peers, and a prominent figure, fully involved in the life of the city, but Sarkowsky wondered if BNMR could handle a job this large.
Architects for large commercial ventures perform a multitude of tasks, conceptual design being the most public, most honored, and most criticized of them. But conception of buildings, like conception of babies, is in some sense the easiest, most pleasurable part of a process that takes a long time. One burst of inspiration by some creative genius – a “Crayola designer,” one member of Bassetti’s firm calls such people – does not a building make.
Someone must determine what will fill the crayon sketch. Someone, for example, must flawlessly produce more than 5,000 drawings just to specify the structural steel in a typical high-rise.
The project architect functions as a sort of general contractor for design, making sure the sticks and stones match the paper and pencil. The architect often selects and sometimes hires many of the subcontractors – the structural, mechanical and electrical engineers, elevator consultants, window-makers, stonecutters, many of these perhaps scattered all over the country, if not the world.
BNMR was not noted for its work on speculative commercial buildings. Its design ability was never questioned, but its administrative capacity for a large private project had never been tested.
Bassetti emphasized his commitment to the building owner’s needs: mainly, making money. He noted he was ready to hire a “time and cost control consultant” for the project. His somewhat quirky presentation, peppered with exclamation points, concluded by promising to “serve the Client so well that he won’t be troubled with the need of an interview next time.”
Sarkowsky loved it.
Still, preliminary probing of Seafirst executives made it clear the bank did not trust Bassetti’s administrative abilities. Sarkowsky split the baby in half. He hired Bassetti to do the design and 3D/I to manage the project.
The obvious good sense of this quickly went the way of all obvious good sense in the development business. It disintegrated. 3D/I was gone before the first spadeful of dirt was turned.
“They hit the wrong button with me,” Sarkowsky says. The button had a dollar sign on it. Hired to watch the money, 3D/I was let go because in Sarkowsky’s view it was spending too much of it. After winning the job, the company had closed its Seattle office, and its architects were commuting from Houston.
“Herman is a financier, not a developer,” Rekevics says. “He makes his money on paper sitting in his office. . . . These guys would come here and give Herman three days of Olympic Hotel bills and a couple of first-class airplane tickets. Herman says, `I can’t bank that. What I need is a master use permit; I don’t need hotel bills.’ ”
Sarkowsky wanted to find a development partner to run the project so he wouldn’t have to worry about such things. While the architects were flying back and forth to Houston, he had been looking for a partner. He had yet to find one.
Sarkowsky, the passive investor, for now was Sarkowsky the developer. And Bassetti, the freewheeling designer, was suddenly Bassetti the project bureaucrat. The odd couple had been joined – like two teen-agers no one else would ask to dance – by attrition.THE ARCHITECT
Bassetti was born in downtown Seattle just a block from Gateway’s site. His father was a dour Italian accountant, who published a group of community newspapers here.
Bassetti’s mother was a vivacious Norwegian, whose gregarious personality came through unchecked in her only son.
Bassetti graduated from Garfield High School and enrolled at the University of Washington, planning to become an engineer. He envisioned himself a man of action: “Look through a transit, wear a hard hat, brave the elements and build bridges or towers or something. But I found engineering, the way it was taught, to be rather dry and uninspiring.”
One day during his freshman year, he went to meet a friend at the School of Architecture. While waiting outside the friend’s class, he looked inside.
“I remember looking through the door . . . and seeing 30 freshman students doing watercolors. And I thought, `How can anybody do that?’ I could never draw even a stick figure,” Bassetti says. “But as I looked around the walls, here were these watercolors of lamaseries in the Tibetan Himalayas. And here was a picture of a restaurant cantilevered out over the rocks on the San Juan Islands. And there were men and women sitting out on the deck with martinis in their hands, seagulls were flying around.
“Seeing the romance of those drawings, it was the first time I became motivated.”
Thus inspired, Bassetti earned a degree in architecture and went to work designing government housing during World War II. After the war, he won a scholarship to graduate school at Harvard, where he was imbued with an intellectual framework to hang his enthusiasm on – Modernism.
Harvard at the time was one of the centers of the Modernist movement in the United States, and Bassetti studied with its master, Walter Gropius. The Silver Prince, as the painter Paul Klee called Gropius, had founded the Bauhaus School in Germany after World War I. From within its walls he engineered a revolution.
Modernism overthrew, then became, architectural convention. In place of the neoclassical, decorative fashions of the time, Gropius and his allies insisted on a strict formality in building. Geometry and function reigned. The spirit was captured exactly in the title of an early Modernist essay, “Ornament and Crime.”
Only “modern” materials, steel, concrete and glass, should be used. A building’s structure should be “expressed” by its form. Arched windows and doorways, pitched roofs and eaves were forbidden. Only flat roofs, pure rectangular doors and windows were allowed. The glass box became the standard form of contemporary commercial building.
Gropius eventually fled Hitler and came to the U.S. American architects flocked to Harvard to study with him. Being accepted into Gropius’ studio was an accomplishment in and of itself. The best young architects in the country wanted to be there. Philip Johnson studied with Gropius. I.M. Pei had the drawing table behind Bassetti in the design studio.
“It was very stimulating,” Bassetti says. “It was a little bit doctrinaire. We copied Gropius a little bit. We were not advanced enough to go beyond copying. We didn’t copy directly, but it all had that Bauhaus look.”
In 1947 Bassetti came home. He spent much of his first year remodeling porches and waiting for clients who never arrived. Eventually he began building homes, usually small homes on difficult sites. He built boxy, flat-roofed, correctly modern buildings, almost all of which, in addition to their Modernist lineage, had one thing in common.
They leaked.`THE SLOPED-ROOF PEOPLE’In a recent conversation, Skip Norton, referring to the stylish dress of a rival architect, made a disparaging comment about the fellow’s “double-vented suits.”
His partner Bassetti hadn’t a clue what this meant. Neither, really, did Norton, who was trying to make a point about the other architect’s pursuit of current style, which in men’s suits is marked not by double vents, but by no vents.
These are guys who have worn the same tweed sport coats for decades, who drive old MGs and regard reinforced concrete as one of the last worthwhile innovations. The firm in some ways is hopelessly out of date, which of course has always been Bassetti’s aim.
To Bassetti and friends, style implies the temporal, the passing fancy. This is bad in everything, but especially in big buildings, which are apt to be with us for a while. Gateway Tower, Bassetti says, might as well be permanent.
In contemporary design, a continuum runs from the cold intellectualism of Modernism to the sometimes sloppy, sometimes contrived, sometimes brilliant kitsch of Post-Modernism, which now occupies the popular middle ground, to the anarchistic notions of the Deconstructionists.
The degree to which these styles relate to popular taste ranges from outright hostility to downright pandering. The temptation to pander is enhanced by the curious position of the business of architecture. The architect doesn’t own what he designs. He does not have the freedom of a sculptor or painter. There are no patrons, only clients.
The architecture produced at BNMR is not neatly categorized. The partners were trained mainly in the Modern style, but they have evolved, not without difficulty, into something else.
The intellectual hold of Modernism was so strong that Bassetti can remember precisely the moment he began to question it:
He was on the roof of a house he had built for himself in Bellevue. It was night. It was raining. He was holding a flashlight in one hand, a bucket of tar in the other. He was wearing pajamas and a raincoat and an additional cloak of exasperation when the skies opened and something other than water fell out: This is stupid, he thought. This is Washington. It rains here. People would not have to get up in the middle of the night to patch leaks in their roofs if the roofs did not leak. Flat roofs leak. Hence: Build sloped roofs.
Bassetti had never been intentionally hostile to the people who would inhabit his buildings. His first house, for example, had such user-friendly features as a fireplace mantle set at precisely the height of its owner’s elbow, the better to lean on at cocktail time. The promise of perfection offered by Modernism was so powerful, however, that when clients would ask about the possibility of a flat roof leaking, Bassetti would tell them – and believe – that technology had solved the problem. Then he’d build the roof. And it would leak.
He sometimes went to extraordinary lengths to honor the creed. Before he came to his senses and put a new, pitched roof on the Hilltop house, he bolted a ladder to an exterior wall so he wouldn’t have to search for it in the dark when going up top for a midnight patch job. He was aware that the mounts he manufactured to secure the ladder, pieces of steel he bent into heretically decorative shapes, were violations of Modernism, but he went ahead with them, thinking himself something of a rebel, never realizing that the absurdity of putting the ladder there at all defined just how tiny his rebellion was.
“I don’t learn quickly, but, by God, when I finally do learn something, I don’t forget it,” he says. And from his last wet night on the roof onward, Bassetti began to think less of architecture as an imposition of his will on a building and more of it as a process of solving the particular problems of a particular site and use.
“Keep in mind that the building is a service, has to be usable, congenial to the user,” he says.
Bassetti can say these things and mean them. He’ll point out his favorite of his own designs is something as functional as a summer-camp shower house, then in the next breath begin talking in terms a building’s user hasn’t a hope of understanding. He will talk about the need for a building to declare itself, to tell where it is and how it got there, to speak the truth. He talks, for example, about the columns supporting Gateway as having a natural vitality not unlike a human hand, all hairy on one side and smooth on the other, sinewy, blue-veined, with bulging knuckles.
He talks about Gateway’s symbolism:
“The building is bilaterally symmetrical, like a person. It’s got a sloping roof. It says about the Northwest it rains here. It says about Seattle that it’s on a particular location and the hillside slopes down to the water. The terracing on the top of the building recalls the slope, stepping down to the water.”
His partner Rekevics says this somewhat less abstrusely.
“We’re all sloped-roof people,” he says. “That’s the way we see.”THE FENG-SHUI MEN
People have been planning cities almost since there were people and certainly since there were cities.
One of the first things the Sumerians did after inventing writing 6,000 years ago was use it to invent bureaucracy. Scholars say bureaucracy could not exist without a medium to transmit its rules. Writing provided the medium, and among the earliest rules devised within it were prescribed designs for cities.
At the height of their era, the Greeks produced Hippodamus, the first great city planner and an early proponent of what would become a standard urban form – the street grid. In their day, the Romans, possessors of great military might and a keen desire to move it about, became transportation experts and as such the first regional planners.
In ancient China, buildings were not built without first consulting a scholar whose job it was to discern the preferential orientation within a city of each building. Practitioners of this folk science of urban design were called feng-shui men. Feng shui is based on natural and supernatural signs including topography, location of nearby bodies of water and position of the stars.
What often seemed to Westerners mere superstition has gained recent converts who claim that whatever feng shui’s sources, its application produces sound design. They say its practice is not all that different from what we do today. We follow superstitions and call it social science.
The feng-shui men of Seattle live at 600 Fourth Ave. They are known as city planners. The planners consult the zoning code, not the stars. The code sometimes seems as immutable as the firmament, but it has proven wildly variable over the years.
The planners have entertained jarringly dissonant visions of the city they were planning. They have codified height limits, then revoked them; commissioned grand designs of great civic spaces, then rejected them; restricted the number of parking spaces downtown, then multiplied them; advocated construction of awnings, then taxed them; mandated open plazas, then filled them.
In many ways the superstitions of the Chinese geomancers were superior at least in their consistency.
Part of the reason for this is an unresolved debate at the heart of American urban life. That debate is between concentration and dispersion, and between the bewildering benefits and hindrances accompanying both. The debate in Seattle is nearly as old as the city.
It raged for most of the first two decades of the 20th century in the form of a dispute over whether the city ought to build a spacious civic center a mile north of the central commercial district on Yesler Way or allow commercial forces to thrust the city up toward the sky.
Seattle city engineer R.H. Thomson, a man so opposed to heights he even disliked hills – and proved it by bulldozing Denny Hill, creating the Regrade – pronounced tall buildings “unwholesome and dangerous.”
Others argued sophistication could be reached only by building up to become the New York of the West.
The business forces won this early debate and kept the focus of the city south, expanding north bit by bit over the next 70 years. One unforeseen result of this piecemeal process is that the city, by the standards of a good feng-shui man or any other seeker of sunlight, is built backwards, with the tallest buildings at its southern edge, blocking the sun.
The debate over density has carried through the years. Occasionally, building limits were tugged earthward, but seldom did they remain. Economics, ego and planning assumptions returned to triumph. Their stamp on the city is the collection of tall buildings in what the planners call DOC-1, the downtown office core.
The core is 31 full blocks and parts of six others platted by the city’s early settlers in the middle of a crescent that curves from south of the Kingdome to the foot of Queen Anne Hill. The crescent follows the shore of Elliott Bay. Keeping streets parallel to the bay dictated an irregular street geometry, defined by separate grids, the avenue and street pattern broken three “ways,” at Yesler Way, Olive Way and Denny Way.
DOC-1 is most of the middle grid, from Jefferson to Union streets and from I-5 to Second Avenue. It is zoned to be the center of the center, the most densely developed portion of the city.
The city’s zoning is based on the notion that any given piece of land ought to support buildings of a prescribed size. The size is defined by bulk. A building could be as high as construction techniques made possible, providing its total bulk, or square footage, is within the land’s assigned load.
The formula for determining the bulk is the “floor area ratio,” commonly called the FAR. Each commercial district in the city is assigned a base FAR. To determine the size of a building, a developer need only multiply the assigned FAR by the dimensions of his land. The product is the amount of square footage permitted.
The land Herman Sarkowsky owned, upon which sat two run-down apartment buildings, was a 120-foot by 127-foot plot, 15,240 square feet. DOC-1, where the land is, had a base FAR of 10 when Sarkowsky bought the property in 1979. Multiplying the FAR times the size of his plot yielded 152,400 square feet, enough for about a 10-story building.
Whatever Sarkowsky had in mind to build, a 10-story building was not it. The size of American commercial buildings has generally been related to the price of the land beneath them, and Sarkowsky’s investment in the property – at this point almost a million dollars, with other millions committed – was more than he could expect to recover quickly with a 10-story building. He wanted something bigger. By manipulating the zoning code, he thought he could get it.
The code, while restricting capacity of a site, regards site and capacity to be tethered, not glued. The development rights to a property can be transferred to any contiguous property. A developer who is able to secure adjacent rights can pile them atop his existing rights, multiplying the size of his building.
The old apartments were the only buildings on Sarkowsky’s block. The remaining three-quarters of the block was owned by the Washington State Department of Transportation and trisected by on- and off-ramps to I-5.
Sarkowsky, acting through James Mason, whom he had hired to help develop his property, had begun trying to secure the rights to DOT’s land. Mason, a former city planner, thought the ramps could be turned into tunnels and the lids covering them could be defined as “land,” which, if leased by Sarkowsky, could be added to his existing parcel.
“What is land?” is not the sort of issue the city’s Department of Construction and Land Use was accustomed to addressing. The process of seeking an answer was somewhat esoteric, but was resolved by the department’s ultimately straightforward determination that land, for the purposes of the zoning code, was that portion of the earth’s surface not covered by water. The freeway ramps, on most days, were land, meaning they had development rights.
Those rights could be transferred if DOT desired. After years of discussion, it did, indeed, desire, especially after negotiating a 77-year, $747,000-a-year lease.
If the issue – what was land – seemed arcane, its consequences were not.
Leasing the state land quadrupled the potential size of his building to more than 600,000 square feet. He was able to acquire almost as much again by further plying the labyrinth that the city’s zoning code had become.
Seattle for 25 years has had a system of bonuses that grants developers extra space if they provide a changing variety of presumed social services ranging from baby-sitting to bagel stands. In 1980, in a display of development dexterity that astounded almost everyone, Martin Selig announced he had achieved sufficient bonuses and development rights to build a 76-story high-rise on the block south of Sarkowsky’s. He had no guaranteed tenants and no partner.
Selig had been Seattle’s most active commercial developer for a decade, but he had been doing most of his work outside the downtown core.
The results of his announcement and his subsequent ability to fulfill it were the reordering of both the private calculations by which developers did business and the public rules that governed them. Both changes had significant effects on Sarkowsky.
Selig’s building, Columbia Center, brought 1.4 million feet of office space into what had been a sleepy rental market. It forced every other developer to reassess the income prospects for his own projects. Sarkowsky concluded the market could not simultaneously absorb his own building and Selig’s. He would have to slow down. Fortunately, he had an ally at hand – the bureaucracy.
The geological portion of the environmental impact statement filed with the city for Gateway Tower goes back in time to the Ice Age when the clay, sand and glacial till upon which Gateway is built were formed.
Gateway’s file with the city Department of Construction and Land Use isn’t quite as old, but it has moved at about the same pace as the glaciers. One planner who worked on Gateway has had three babies since the file was opened 10 years ago. The department itself has had four directors, and the zoning code was radically changed three times.
Gateway Tower, before its doors can open, will require the issuance of 20 separate permits, approvals and licenses from the city, county, state and federal governments.
Bassetti’s staff began going to Department of Construction and Land Use meetings to discuss a master use permit, an acknowledgment that a design meets the code, in the spring of 1980.
A permit was actually granted in 1983, but Sarkowsky’s various delays slowed the project. By the time he was ready to resume full speed, Columbia Center had caused people other than developers to re-examine the city’s office market. Objections to its construction prompted a rezoning of the downtown office core. Gateway, because it had been under way before the new rules took effect, was given a partial dispensation from them. Sarkowsky’s right to build it was grandfathered into law, but precisely what he could build was not.
Planners required Gateway to get a second permit, reinterpreting the bonuses it had been granted under the old code to see how they fit into the new one.
The shotgun marriage of the two codes often proved absurd, says Rekevics, the Bassetti partner whose job it was to acquire the permit.
“They had to bureaucratically realign the system with the building. It gets kind of ridiculous sometimes. It’s a line on the floor, and on one side of the line it’s a roof garden and on the other side it’s a plaza.”
Jon Hall, a former BNMR architect who worked on the permit process, says the city was particularly emphatic about “adjacency issues,” ensuring that pedestrians could get to the plazas that the bonus system encouraged. This was especially difficult because the freeway ramps sliced through the building’s civic front door on Fifth Avenue. Putting “lids” over the ramps had raised the project above street level. The resulting problem was “how to make it seem as though it were street level when there was no street,” Hall says.
City planners were not the only people seeking to influence the design. John Hempelmann, Selig’s attorney, wrote to the city asking without a hint of irony that Gateway’s permit be denied because it would block the views of Columbia Center tenants.
At one point, late in the process of seeking the second permit, agreeing to yet one more city-requested alteration, one of the BNMR architects scribbled in the margin of the city’s letter, “My God, let this be the last change.”
In the end, the city granted virtually everything Sarkowsky could have dreamed.
A series of shopping arcades set in and around a plaza at the building’s base – shops Bassetti says he would have built regardless of the bonuses – and a stairway between the plaza and Fifth Avenue would be built. In exchange, Gateway qualified for bonuses that totaled almost 400,000 square feet. The bonuses came to more than twice the square footage of the original building allowed by the law. These numbers, while measures of space, are also measures of money. The top rents in the office building, when it is finally occupied, are expected to be near $30 a square foot.
Gateway was growing into a big building. It had leaped on paper to 1,007,490 square feet.
There was only one way to use that much space.
Fred Bassetti is no special fan of tall buildings. He thinks Seattle has too many of them. He thinks they create too much shadow and too much congestion. But he also thinks the commercial life of the city makes the rest of its varied life possible, and he hungered for the chance to do a big building.
“I recognize the dichotomy and I wonder have I done a horrible thing,” Bassetti says.
Like everybody else, Bassetti has to earn a living. Contrary to popular belief, architecture is not a particularly lucrative profession, “at least not the way we do it,” he says.
In his best years, Bassetti’s income has been near $50,000, a good living but a fraction of that earned by many professionals. A high-rise like Gateway provides a source of income for an architectural firm for years.
Based on a percentage of construction cost, BNMR will take in somewhere in the neighborhood of $5 million on Gateway. This is by far the biggest fee the firm has ever earned. As a lump sum, it would have been a bonanza, but the firm has been working on Gateway for 10 years. Often, more than a dozen architects were devoting all their time to it.
Given the chance, Bassetti sought to make Gateway as tall as possible. “Make no mistake,” Bassetti has written. “Height is money.”
A skyscraper’s owner is selling space and view. The taller the building, the more of each he has to sell. This means going as high as the law allows.
By simple calculation, the million square feet would produce a building of about 50 stories, given a standard floor size of about 20,000 square feet. This figure is not entirely arbitrary. Tenants prefer it because it produces reasonably efficient interior spaces.
Efficiency aside, a floor of 20,000 square feet also provides exterior offices – that is, views – to all executives. This is not an idle concern for developers. The executives are the ones who decide where they will rent space. The floor size was thus set, and if Bassetti wanted more height he would have to get it by some other means.
He found it in the garage. “I originally thought of putting the garage underground to get the damned thing out of the way,” Bassetti says. “But the deeper you go, the costs increase geometrically. The bottom corner parking stall probably costs $100,000.”
Bassetti faced the additional complication of the freeway ramps, which cut through the site at exactly the place where the garage would naturally have been. Digging under the ramps meant going even deeper, so to save money, the garage was placed up the sloping site from the ramps; six of its 12 stories are above ground.
Bassetti says this had several serendipitous effects: The partly-above-grade garage cuts the drive time to the bottom floor in half; it is a buffer from the freeway; and it pushes the building higher. With the garage, a seven-story atrium and a health club sandwiched between the ground and the main portion of the tower, the actual office space does not start until the 16th floor.
This hoists the top of the building 700 feet and 62 stories into the air, taller than anything in town except Columbia Center. Once Bassetti knew how tall the building would be, the first person he went to see was structural engineer John Skilling. His firm, Skilling Ward Magnuson Barkshire, has engineered most of the high-rises in Seattle as well as hundreds of other structures elsewhere: buildings, bridges, tunnels, towers, runways, hangars, water tanks and warehouses, something on every populated continent, from projects as famous as the twin-towered New York World Trade Center to the Yakima Post Office.
“In nature,” Skilling will say, speaking as if buildings were indeed natural occurrences, “things like a tree or a building have good strong foundations.”
Sometimes, Skilling says, an architect will hand an engineer a building design and say, “Here it is. Make it stand up.” Bassetti’s approach was the opposite.
“I asked him what was the strongest, most economical structure for a tall building. He said steel tubes with concrete pumped into them. That’s where we ended up,” Bassetti says.
There are four such tubes on Gateway, each 9 feet in diameter, running more than 600 feet up the building. The tubes bear most of Gateway’s weight, and are an example of the sort of ingenuity for which SWMB is famed. The ingeniousness of the columns lies in their ability to join the advantages and mitigate the weaknesses of two dissimilar materials – concrete and steel.
Concrete, which is relatively cheap, has great compressive strength. It will bear tremendous weight with little deformation. It has, however, less tensile strength than paper. When bent, it breaks.
Steel, which is relatively expensive, has much greater tensile strength. It bends, but its compressive strength per dollar is much less than concrete. If loaded with too much weight, it buckles. This can be avoided by using heavier steel to bear more weight, but the cost can grow to be prohibitive.
If the two could be combined, the material would have the strengths of both and the weaknesses of neither. Thus, the invention of reinforced concrete, or concrete with steel rods in it. The great columns that hold up Gateway operate on the same principle, but with a special high-strength concrete on the inside surrounded by the “containment steel.”
The ingenuity rests not on mere technical expertise. It is based at least as much on cost. Structural engineers, like architects, don’t eat if their in-baskets are empty. Skilling is a constant salesman. What he’s selling is his firm’s ability to deliver a structural plan that will be at least as safe as anyone else can deliver, and cheaper besides.
There is a sort of four-minute mile in contemporary high-rise engineering. The goal is to reduce the pounds of steel per square foot of space in a building (or any structural substitute converted to the cost of steel). The barrier is 10 pounds per square foot.
Skilling eagerly distributes a slick graphic displaying the weight of the steel in every high-rise building in the world for which he has been able to obtain the information. The weights exceed 40 pounds per square foot in the older buildings. Most of the 118 buildings on the chart are between 20 and 30 pounds per square foot. In a yellow band on the chart’s far left are the lightest buildings. Ten of the 11 buildings in that band are Skilling’s. None of the high-rises has breached the 10-pound barrier yet. None but Skilling’s is close.
Gateway’s steel weighs 11.5 pounds per square foot, contributing to a total weight of 129 million pounds. The next-lightest high-rise of equivalent size is a 63-story building in Tokyo. It’s 28 pounds per square foot.
The significance of this to a developer is substantial. Steel commonly is the most expensive single material in a high-rise, as much as a third the total construction cost. For equivalent load-bearing capacity, steel can cost more than 20 times as much as high-strength concrete.
There are fundamentally two types of forces to be addressed in making sure a building stands up: a vertical force, gravity, which seeks to pull it down; and lateral forces, wind or earthquakes, which seek to push it over.
The effects of gravity, because they are constant, are easier to predict and overcome. The composite columns do most of the work themselves. The great compressive strength of the concrete allows the four columns to bear much of Gateway’s total weight directly into a 10-foot-thick concrete foundation.
The lateral forces, because they vary unpredictably, present a greater challenge to an engineer, Skilling says.
At first it seems unlikely that anything weighing 129 million pounds would be susceptible to the wind, but that weight is distributed throughout an extremely large object, most of which is empty. Gateway’s overall density is slight, nine pounds per cubic foot, the same as balsa wood. Consider what the wind might do to a 700-foot-long piece of balsa.
Most of Skilling’s analysis is aimed at engineering comfort. When he won the contract to engineer the 110-story World Trade Center, he found that no one had thoroughly studied the discomfort tall buildings inflict on their inhabitants. Many tall buildings sway several feet. This is much more likely to upset psyches than the building, but it can become a significant factor to tenants.
Skilling and architect Minoru Yamasaki set out to determine at what level of acceleration an occupant feels a building move. They built a room on a hydraulic pad and advertised free eye exams. People would come in for their exams, sit in a chair, and psychologists, hidden behind two-way mirrors, would start moving the room “in a figure eight, which is how a building moves.”
The reactions varied dramatically. Some people would complain at the slightest acceleration. Others would grip their chairs as if they were riding a tilt-a-whirl, yet never utter a sound. Skilling and the psychologists eventually established “a threshold of awareness . . . We determined the rate at which 2 percent of the people seriously objected and set that as the upper limit.”
To meet this threshold with Gateway, Skilling designed a simple square with a composite column at each corner. Joining the columns are a series of steel girders that cut across each plane of the box on a diagonal once every 10 floors. The result is a set of six giant X’s stacked from ground to roof.
The braces tie the columns together, making Gateway extremely rigid for a high-rise. In the fiercest gale expected to blow in the next century, Gateway’s top ought to sway about 8 inches, in a 7.5 Richter scale earthquake about 9 inches.
Because of the wide spread of the large columns, Bassetti likens the building’s ability to resist wind or earthquakes to a boxer’s broad stance. He could as easily compare it to a child’s lead-bottomed punching bag. The columns finish in a 44-million-pound concrete foundation, giving the building the structural characteristics of the world’s largest Tommee Tippee cup.

One of the ways in which structural engineers reduce costs is to reduce floor-to-floor height. With shorter floors, more of them can be built for the same cost. This results in either offices with lower ceilings or a reduction in the space between the ceiling of one floor and the bottom of the floor above it.
This space is known as an interstice, a space between spaces. It’s Art Sirjord’s office.
Sirjord is the chief mechanical engineer on Gateway Tower. As in all social organizations, there is in the development community a hierarchy. At its top are money people, developers, and idea people, architects. In the next strata are the structural engineers.
Down several layers, beneath the glamorous ironworkers and the flashy brokers, not even on a layer of their own, but sort of threaded through the entire structure, like their work, unseen, living in the cracks, are the mechanical and electrical engineers.
They are responsible for heating, lighting, cooling, plumbing and ventilating high-rises. This is not particle physics. The systems are well-understood. As Sirjord says, “All you have to know about plumbing high-rises is the terminal velocity of falling fecal matter.”
More difficult than designing the systems is finding a place to put them. The easiest way to hide something in a building is to bury it beneath the floor, but mechanical systems depend on gravity to work. They must slope. Thus the battle for the interstitial space is joined.
“The structural engineer has become so persuasive on floor-to-floor height because it allows him to reduce the steel, I don’t think they ever take into account the cost caused by us having to work in small areas with limited access, beam cutting, simple inefficiencies,” Sirjord says.
The great shame of what he does, as Sirjord sees it, is that nobody appreciates it “until something goes wrong.” Developers will spend millions on grand marble lobbies and granite facades. They’ll coat elevators in mahogany, but ask for an extra inch in the interstitial space, and they’ll tell you to forget it.
Gateway is unusual in that Sirjord won more battles than he lost. In part because of Bassetti’s taste for problem-solving and his willingness to sacrifice design options in its service, and because Sarkowsky was willing to pay for it, Gateway has the most advanced mechanical system Sirjord has ever put in a high-rise.
The main feature is a separate ventilation system for each floor that allows occupants to dial in as much fresh air as they want. The system is capable of 100 percent fresh-air exchange. Many buildings exchange as little as 5 percent, and most office occupants live on recycled air. Sirjord’s system was conceived in response to a phenomenon called “sick building syndrome,” a condition in which poorly ventilated offices, filled with chemicals for copying machines, wood glue, paper dust, recycled air and who knows what-all, have been blamed for inducing illnesses.
The syndrome was first identified 20 years ago, but little has been done to alleviate it because it costs money. Proponents say fresh-air systems pay for themselves with increased efficiencies over time, but developers live on borrowed money.
“They’re stuck on first costs,” Sirjord says. “The genius of this system was the willingness of the owner and the architect to place the mechanical rooms on the outside walls. Most owners and leasing agents go nuts if you even mention this.”
Many people in the development community around town think Sarkowsky was nuts to place a mechanical room on the eastern edge of each floor, in prime view space. “It’s like giving money away,” one broker says.

The design of Gateway Tower began, as Bassetti says design always begins, “with the terror of a white page.”
Gateway’s page, however, was far from untouched by the time it fell into Bassetti’s hands. A great deal had been scribbled on it by a wide variety of hands. The developer’s budget had sliced corners off the page. The city’s history, planners and politics had filled much of what remained. The peculiarities of the sloping site itself posed as many problems as everything else combined.
All of this produced what several people have described as the most difficult high-rise site in town. The task of building Gateway – challenging enough in purely financial terms – grew to require elements of urban reclamation, of engineering wizardry, of political will and, for the designer if for no one else, of art.
Bassetti is not an overly modest man, but he was more than willing to give up large parts of his design to other concerns. He gave Sirjord the view-blocking mechanical rooms. By placing half the parking garage above ground, he gave the base of the building over to automobiles. He proudly gave Skilling’s structure the most expressive elements of the design.
In many instances, Bassetti sought to make virtues of necessity. Fighting the freeway ramps at its feet, Bassetti realized Gateway wouldn’t work as a rectangle. By pulling the southwest corner of the rectangle back, he escaped the ramps and, suddenly, Columbia Center wasn’t dead ahead across the street. The view angled around it to the south. When he pulled back the northwest corner, the view opened to the north. All four corners were pulled back and Gateway became an elongated hexagon.
“Please bear in mind,” Bassetti wrote in one essay on the design, “that everything about Gateway Tower, where it stands on the site, its size, the materials used, its shape and appearance and color, have grown out of the process of problem-solving. Almost nothing is arbitrary.”
There is nonetheless little question that the guiding hand on the not-so-blank page was Bassetti’s own.
Gateway would become his: a tall building built by a man who dislikes tall buildings; a skyscraper built in the Post-Modern era by a man who despises Post-Modernism; a structure elegant in its efficiency, elegant in the way a mathematical proof is elegant, if not in the more popular sense of being pretty.
Following BNMR’s normal procedures, Bassetti, the partner who brought in the work, became the partner-in-charge and principal designer. Unresolved in-house arguments would have one solution – Bassetti’s.
Because it was Bassetti’s, Gateway would take on a certain shape. It would not have a flat roof because the first house Bassetti ever built for himself had a flat roof that leaked. Gateway came to have a distinctive arched gable roof that has appeared in building after building of Bassetti’s design, as if he were trying to exorcise some flat-topped Modernist demon.
Partner Skip Norton, who is not enamored of the roof, says the arch was inevitable. It has followed Bassetti for decades, from the design of a gate for the 1962 World’s Fair (a gate, by the way, that fell over shortly before the fair was set to open), to the roof of a library in Ellensburg, and now to Gateway.
At one point Sarkowsky had entered a partnership with The Koll Co., a Southern California developer. Koll wanted to know if everybody couldn’t save a few million dollars by flattening the roof.
Bassetti and the Sloped-Roof People were offended.
“Sure,” Bassetti says, recalling the debate. “You could do this.” He grabs a pen, draws seven quick lines in the form of a cube and labels it “El Cheapo.”
Bassetti had determined Gateway would have the arched roof as its most distinctive feature. He had plans for the roof. It would form not just a shape but a grand space.
The plumes you see coming from the tops of most high-rises are typically not caused by furnaces providing heat but by cooling systems extracting it.
High-rises, because of their immense sealed glass areas, accumulate heat. The top two floors of most of them are stuffed with cooling and ventilation equipment. This is the equipment Sirjord wanted to distribute to each floor and to the garage.
When Bassetti realized the mechanical equipment didn’t have to be on the top floors of the building, he was determined not to let it be.
With the equipment packed off to other destinations, it became possible to plan offices in the top. These grand offices, Bassetti decided, would be covered by one of the world’s largest skylights. He would cover the entire roof of the building in green glass, the same shade of green as the Washington Mutual Tower’s pyramid top, “so they can wink at each other across town.” Sarkowsky thought the idea a little far-fetched. They argued about the roof for months. Sarkowsky yielded. “Fred’s the kind of guy who’ll say: `I won’t have my name on it.’ I respect him for that,” he says.
Once Bassetti had settled on the sloped roof, a roof he says tells an observer it rains here, he had to decide what to do with the rainwater the building was talking about.
Most high-rises do not have a problem with rain. On a high-rise, unlike a house, that is one of the advantages of a flat roof. Usually, an architect will extend the exterior walls above the level of the roof. This mock wall, called a parapet, traps rainwater. The water is funneled into rooftop drains and carried into the building’s interior plumbing.
“You can hide a multitude of sins doing that, but it’s rather unexpressive,” Bassetti says. In any case, on a sloped roof with eaves overhanging the walls, there was no place to build a parapet.
Martin Selig had faced a similar problem with his Fourth and Blanchard Building, which is characterized by sharply angled roof lines. His designers chose to let the water run off the side. That works fine as long as the water remains water, but when it turns to ice in winter, it slides off in great sheets. At times the city has had to close the alley behind the building to protect pedestrians from the falling ice.
Bassetti didn’t have the luxury of an alley. Also, his ice would be 700 feet in the air. Allowing it to fall would turn Columbia Street into a missile range. That meant he had to carry the water off, and that meant gutters. Oh, my, did that mean gutters.
Karl Rekevics recalls Bassetti asking how big the gutters should be.
“The mechanical guy says take an 8-inch tube and cut it in half and that’s how big it should be.” Bassetti nodded. He made the gutters 5 feet wide.
They’re precast concrete, and each 18-foot section weighs 13,000 pounds. They look precisely like what the construction workers call them – pig troughs.
“It doesn’t have to be this size,” Bassetti admits. “I felt it was important that it have a presence that shows it does catch all this water.”
As big as the gutters are, it is difficult to tell what they are from the ground. Sticking out from the building more than 600 feet in the air, they mark the end of the roof. The combination of arch and gutters creates a mushroom effect, forming a cap on the stalk of the tower. Some people are reminded of something other than mushrooms, however.
Bassetti often talks about Gateway in feminine terms, likening his design intent to the act of capturing the natural beauty of an honest woman’s wrinkled face.
But Gateway is hardly feminine. Even Bassetti says it’s a “gutsy, masculine building, don’t you think?”
Masculine, certainly, although buildings are inevitably criticized as phallic. Given their nature, it is difficult to escape such a shape. It is equally difficult to recall another building so much that shape. Jokers at the construction site have christened the building “Fred’s Last Erection.”
The tower’s overall shape, whatever it reminds people of, was determined in large part in response to its site. That is less true of its color. Unlike almost every other aspect of design, color is a matter of nearly unlimited choice; and in the case of Gateway, nearly unlimited debate.
Years ago, Sarkowsky requested a model to display at a Downtown Seattle Association event.
Models are built endlessly in architects’ offices, usually out of whatever happens to be on hand. In this instance, that was white cardboard. It was hard to tell afterward exactly what anyone at the DSA meeting thought of Bassetti’s building, but one thing was clear. They loved the cardboard.
Person after person at the meeting came up to Geri Kraft, who was marketing the building for Sarkowsky, and commented on the model.
“It’s beautiful,” one said. “It just gleams.”
“Why don’t we have more of these,” said another.
Well, why don’t we have one, Sarkowsky said. No decision on color had been made. Bassetti wanted something colorful, not colorless, something to warm the cool winter skyline. But the white model created a life of its own. Suddenly, everybody wanted white. The market demanded it.
Bassetti reluctantly succumbed. An earlier decision had determined the building would not be a glass box and would be sheathed in stone. So a search for white stone ensued.
There is, it so happens, a geography to the color of granite, the most commonly used building stone. Grays tend to come from the United States, yellows from South America and darker reds and blacks from Scandinavia. Within those areas, each quarry might have a different color, depending on the specific mineral content of the stone.
Patrick Gordon, one of the designers of the Washington Mutual Tower at 1201 Third Ave., recalls traipsing over half of Brazil looking for yellow granite for that building. When he finally found it, he scrambled up the side of the quarry wall and painted out exactly the sections he wanted.
So the quarries of the world were scoured for Gateway.
“We had rocks here from every part of the planet,” Rekevics says.
There is, alas, no such thing as white granite. Bassetti was hardly chagrined to report these findings. “You can get some nice grays that are marketed as white, but you can’t get white,” he told Sarkowsky and Kraft.
What about marble then? they asked. Marble comes in white. There are white marble buildings right here in Seattle. Off Bassetti went in search of marble, which does, indeed, come in white. But the use of marble on high-rises, he discovered, has had a somewhat litigious history. It falls off.
In modern high-rises, exterior walls are not part of a building’s structure. Called curtain walls, they are essentially decorative. If stone is used, it is not used in thick blocks, but is cut into thin strips, normally less than an inch thick, and attached to the steel structure beneath.
Such thin sheets of stone expand and contract as they heat and cool. Cooling marble, however, never fully contracts to its preheated shape. Over thousands of heating and cooling cycles, this can become a problem. The marble bulges. If it bulges enough, it cracks. At worst, it falls.
BNMR’s Norton says the problem could have been solved simply by using white ceramic tiles. “I’m not a great fan of natural products cut into thin sheets and hanging 60 stories up in the air,” Norton says. Tiles would have given the owner a white building while also being, to use Bassetti’s language, more honest.
There is a suspicion, however, that for every proposed solution Bassetti would have found a problem. He did not want a white building. He wanted something warm. He wanted red. And that is what he got.
Sort of.
A Finnish granite, known commercially as Cardinal Red, was finally chosen. But even after Bassetti won the debate, the color continues to bedevil him. Cardinal Red is not, it turns out, very red. On the building it looks brown.
At some firms a great deal of effort would have been spent to eliminate this sort of surprise. Endless color studies would have been done. Photo collages from every conceivable angle would show the proposed new building in its surroundings. Some firms use a device called a magniscope that, by shrinking the viewer’s perspective, allows its user to view an architectural model as if it were full size.
Bassetti goes through the same processes but often intuitively, inside his head. He trusts his instincts and welcomes some surprises, providing as they do a sort of intellectual entertainment. He recently delighted in an unforeseen benefit of the building’s freeway neighborhood. The brown granite picks up thousands of reflections from cars as they move past it. In the right light, the whole tower sparkles.
This was a surprise but not entirely an accident. Gateway’s base, given its site, was naturally distinctive. The green-gabled top was not just distinctive, it was provocative. Bassetti sought some means to give similar variety to the main part of the building, the tower. He worked to vary its texture.
As a result, Gateway’s curtain wall is not a sheer face. Most of the windows are recessed and have granite sills. The only exceptions are the windows that front the structural X-braces behind the walls. Bassetti marked the presence of the braces by bringing these windows flush to the granite. The flush windows form a pattern of faint X’s, echoing the braces.
The combination of the flush and recessed windows, the sills, the brown granite and bronze glass give the walls a faceted surface intended to catch, fracture and reflect sunlight. That the hundreds of thousands of cars cruising past the building contribute to this makes Bassetti almost giddy.
The building — any building, Bassetti says — is composed of a mountain of such detail and the criticism from developers that he lacks attention to it infuriates him. Architecture is all detail, some intended, some not, some chosen, some discovered.

The green glass is going on the gable this week. Workmen are putting the last pieces of granite in place and soon the activity will move inside, where a final rush to finish the building by its spring target date will commence.
At this point, doubts about Bassetti have been made irrelevant by the building. Some 20,000 individual drawings were drawn — a damned fine set of drawings, Bassetti says. From them, a building — damned fine, as well, he hopes — has been nearly built.
What might have been a 10-story white marble building with a crew cut sits a 62-story reddish brown tower with a green-glass shower cap, the object of almost ten years of the most intense effort Bassetti could give it. He has had his chance to pre-empt space, for a time to play God. But when done, the building will no longer be his. It will belong to Sarkowsky who started it, to the banks that underwrote it, but even more people who didn’t ask for it and might not even want it — the citizens of Seattle.
Bassetti understands that any judgement of Gateway is not his to make, but theirs. Architecture in practice amounts to “a large subtle argument seldom understood,” he says. With a big building, the resolution to the argument sits off somewhere in the future.
“It’s like growing your kids up,” Bassetti says. “They’re all wonderful at six, but at 16? . . . I know there’s going to be plenty of surprises, I see them everyday. How the hell did that happen? Jesus Christ, how’d that happen?”




Coming into Seattle from the south, the collection of tall buildings rising from the Duwamish plain is an imposing sight.
The land where the first of those buildings sits is part way up an area once known as Profanity Hill, a name unkindly if not unreasonably applied by those who had to walk up it from the city center on Yesler Way. When it is cursed now, it is not for the size of the hill, but for the size of the buildings upon it.
The 76-story Columbia Seafirst Center is the tallest man-made object a northbound traveler would have seen since Los Angeles. Its new eastern neighbor, the 62-story AT&T Gateway Tower, is not much smaller. In addition to their sheer size, critics object to the cars, smog, shadow, congestion and wind the fancy towers bring with them.
Some of these problems of tall buildings could be eliminated – indeed many of the buildings themselves could be eliminated – by following some Shakespearean advice: Kill all the lawyers.
Most high-rise office buildings are filled with representatives of the professional classes: accountants, insurers, bankers, brokers and, especially, lawyers.
There are more than 15,000 lawyers in Washington state, twice as many as there were 10 years ago when neither Columbia Center nor Gateway Tower existed. More than half of those 15,000 lawyers are here in King County and, according to a recent census of the downtown Seattle tenant population, law firms rent nearly a third of all high-rise office space. Among the few things that have grown as fast as the number of lawyers are places to put them. By the time Gateway is finished next summer, the supply of office space in downtown Seattle that was a century in the making will have doubled in a decade.
The reasons for this are complex and many, but the result for the people building the space has been singular bedlam. The enormous growth of office space has outstripped demand, pitting high-rise developers in a high-stakes competition for tenants and survival.
Columbia Center and Gateway were conceived at about the same time, and they sit across the street from one another, but the six-year period between their construction might as well be an eon for the changes that occurred within it. They are bookends to an unprecedented era.
Martin Selig owns more office space than anyone in Seattle. Depending on where one draws the boundaries of downtown, he controls as much as a third of the market, space estimated to be worth a billion dollars. But this fall, desperate for cash, Selig was forced to sell Columbia Center to avoid foreclosure proceedings against other properties. And it isn’t clear that his profits from the $354 million deal will be sufficient to put him right.
Among other demands, Selig must pay off outstanding mortgages of $260 million, and he faces a potentially crippling capital-gains tax payment that, by rough calculation, could be as large as $90 million. That would leave only $4 million (only?) in after-tax profit – and New York Life Insurance Co., the lender threatening foreclosure, is demanding payment of $64 million.
There are those in the city who think this is only the beginning, that Selig will have to sell off his empire piece by piece to satisfy creditors.
Others in the real-estate community are fearful of stomping too hard, yet, on Selig’s grave, lest he climb out and stomp back, and they tell Selig stories with a special awe reserved in some societies for deities, which of course he is in theirs. The picture competitors and brokers paint of Selig’s style is one of calculated recklessness. Whether Selig recovers or not, they say, he has no one but himself to blame.
Seattle’s space wars began six years ago when Selig built Columbia Center, then did everything but kidnap tenants to fill it.
A new, premium office building should rent space for an average of at least $22 a square foot per year simply to meet mortgage payments, taxes and operating costs – more if the developer hopes to make a reasonable operating profit. Selig has rented space in Columbia Center for as little as $12, according to brokers.
Cerissa Merritt, a commercial broker with the firm Cushman and Wakefield, recounts one lease negotiation with Selig in which they had agreed on every point but the rent. Commercial leases can routinely be scores of pages long, addressing everything from the brand of carpet to the quality of wallboard in the bathrooms, so getting down to the rent is a more significant achievement than it might seem.
Merritt wanted $12.50 a square foot, and Selig was holding out for $14. Finally, Selig said, “Let’s flip for it.” Merritt was taken aback, but she agreed.
Selig tossed, looked at the coin and announced, “That just cost me $283,000.”
Merritt burst out laughing.
“What are you laughing at?” Selig said. “You just lost $7,000 in commissions.”
Selig, despite his reputation for aggressive deal-making, is a notoriously bad negotiator. He agrees to everything. A prospective tenant will run through a list of demands, Selig nodding, yes, yes, yes. When the tenant is done, Selig will peer out over the top of his half-height reading glasses and say, “Is that it?”
“I must have done something right,” Selig says. “The buildings are all filled up.” Selig says.
Selig’s business philosophy is simple: Pack the tenants in at whatever rate of return you can get, and let the banks cover the negative cash flow. His “profit” is supposed to come as the value of the buildings inflates over time and he is able to borrow more and more against them. An acquaintance says Selig once described this strategy as being similar to that of a heavily indebted Third World nation:
“Get the banks to loan you enough money, they cannot afford to let you fail.”
It amounts to a sort of pyramid scheme whereby he continues to expand his base to feed everything above it. He expands his debt, borrowing from past deals to finance new ones.
The pyramid began to topple, however, this summer when one of his lenders, New York Life, sued Selig for attempting to pay mortgages with checks that bounced all the way from Seattle to Manhattan. Selig publicly maintained the suit was a misunderstanding in the midst of a loan renegotiation, but in court documents he has acceded to all of New York Life’s demands. An army of lawyers and business-school graduates has descended and is combing through his accounting ledgers in search of whatever crumbs they can carry off.
Selig remains stoic. He continues to disparage his competitors, especially those who choose safety by taking on partners, thereby diluting their risks.
He also continues to deal. Just two weeks ago he received the city’s blessing to build a new building at Fourth Avenue and Vine Street.
“Deals walk in here every day,” he says. “In the business I’m in, your money will always run out before your deals do.”
Selig’s competitors follow his travails with a mixture of regret and glee. Although they had long forecast his demise, they are sorry to see one of their kind stumble, if only for what it says about their own chances of survival. But they greet his temporary absence from the marketplace as a window of opportunity.
Selig’s aggressiveness has set the terms in the downtown market, and the terms have not been favorable to the developers.
“Martin went into his war chest to the bottom on every deal,” Merritt says. Other developers had to match his deals or lose tenants. With Selig sidelined, they hope to redefine the market. Keith Riely, a veteran commercial appraiser, wonders if it might not be too late to do that.
Cheap rents have made the office-building market largely unprofitable, Riely says. “A building has its best income-producing capacity when it’s new. When it’s not new, it’s not new. People won’t pay as much to be in it.
“Some of these buildings will never catch up.”
Starting with Columbia Center in 1984, more than 8 million square feet of premium office space has been built downtown. In a roundabout way, Selig created much of his competition. The construction of the 1.4 million-square-foot Columbia Center was greeted unenthusiastically by many critics who regarded the huge black tower as out of scale with the city. They led an effort to rezone downtown to restrict further high-rise development, but three already planned high-rises, were allowed to proceed under the old rules, provided construction began within a prescribed period.
All three properties – Herman Sarkowsky’s Gateway Tower, Unico Properties’ Two Union Square and Prescott Properties’ Pacific First Centre – met the deadlines. Two Union and Pacific First opened this year. Gateway is scheduled for completion next spring.
Additionally, Wright Runstad, another developer, sensed an opportunity to pre-empt the market and rushed a fourth building, Washington Mutual Tower, into existence in the hopes of halting at least two of the other three others – Two Union and Gateway.
The pre-emptive strike backfired. All four buildings were built.
“We thought the money would be there for two of the buildings, possibly three. Never four,” says Barbara Dingfield, a Wright Runstad vice president. “We think somebody’s going to lose an incredible amount of money.”
“Why we had four buildings go up at once is because we keep changing the goddamned zoning, and people were trying to protect their property rights,” says Dick Clotfelter, president of Prescott, which is rumored now to be facing critical cash-flow shortages.
No one had anticipated the accumulation of surplus capital, particularly in booming economies abroad and pension funds at home, that has altered lending criteria and caused loans to be made that once would never have been considered.
“It’s my specialty, and I wonder sometimes if I know what’s going on,” Riely says.
Seattle developers were not unique in their overzealousness. Virtually every city in the United States has been overbuilt in the last decade, says Michael Beyard, an analyst with the Urban Land Institute, a national development association. Such speculative building is hardly new, Beyard says.
“In the Depression, when the Rockefeller Center was built, people wondered if there would ever be a market for the space. What is new is the sheer volume of speculative space in the ’80s. It was caused by a shift in the ’80s to the service economy and encouraged by the large quantity of money available. We’ve ended up with speculative buildings that may never be needed,” Beyard says. “They sort of went off the deep end.”
As manufacturing employment has declined in the United States, service employment has increased. Skyscrapers have replaced lumber mills. This is not entirely bad. As U.S. Sen. Bob Dole, during his pursuit of the vice presidency, was fond of saying, “It’s inside work and there’s no heavy lifting.”
If his choice of profession is any indication, Judge W.H. Bogle was no fan of heavy lifting, either. Bogle, a lawyer, who so far as anyone can tell never lifted anything much heavier than the title “judge,” which he appropriated without the bother of having been one, moved to Seattle in 1897 after a two-year exile in Yakima – having been sent east of the mountains by his Tacoma physician in search of a cure for consumption. In the 92 years since he arrived here, his law firm has occupied space in four buildings, each in its time one of the premier business addresses in the city.
In the fall of 1986, Bogle and Gates, which by then was the second-largest and fourth-oldest law firm in town, began investigating a move from the Bank of California Center upon expiration of its lease three years hence. Bogle was hardly alone. By the end of next year, only one of the 10 largest law firms in the city will inhabit the same building it was in 10 years ago.
The wayfaring nature of those firms contains within it much of the recent history of the American economy.
The growth of the service economy has been a primary reason law firms in Seattle are playing hopscotch across the downtown skyline. Although it sometimes might not seem like it, law firms do not exist to serve their own purposes. They serve clients and have grown to address the needs of those clients.
The shift away from manufacturing is one of many changes that underlie the physical transformation of downtown Seattle. Urbanization, the growth of new economies in high technology and medicine, the increase in international trade and general good times have all caused law firms to grow.
Even manufacturing itself has played a role. The largest law firm in Seattle not coincidentally has as its principal client Boeing. As Boeing has grown, so has that firm, Perkins Coie. Perkins led the charge into new quarters, not just taking premium space in the Washington Mutual Tower but taking an ownership stake in the building as well.
Many firms, Bogle included, simply outgrew their old premises. Just since the firm decided to move from the Bank of Cal, its needs have grown by a third, and when the firm moved last month, it took 160,000 feet.
The Bogle partners were not entirely eager to move. The Bank of Cal was new when the firm moved there in 1974. Its offices were comfortable, richly appointed, lawyerly spaces. The Bogle partners liked them so much that at one point they had tried to buy the building.
The location at Fifth Avenue and Madison Street in the heart of the traditional financial-government center was ideal: three blocks from the county courthouse, two from Interstate 5, just across the street from from the federal courthouse and the Rainier Club, which had become a kind of second office for many of the lawyers.
This last consideration seems casual but is the sort of thing that often plays a crucial role in determining business locations. The firm had been within the same three-block area for 80 years, and its members had acquired well-worn favorite places. There was “a lot of psychological inertia,” says James Tune, who as Bogle’s managing partner was charged with overseeing the firm’s office arrangements.
Initially, Tune says, the firm considered a new lease for more space in the Bank of Cal. In the midst of that investigation, the building was sold. The new owners, Continental Realty Corp. of New York, wanted Bogle to stay, but their lease proposal was the most expensive one Bogle received. Bogle could move to one of the more commodious new buildings and save money.
“I found it absolutely stunning,” Tune says. The cost, the lack of space and the need for technological renovation all helped persuade Bogle to move.
Even with the firm’s misgivings, the expiration of its Bank of Cal lease was fortuitous. The lease was expiring at a moment unlike any other in the city’s commercial real-estate history, a time when an office tenant the size of Bogle could very nearly dictate terms to a prospective landlord.
“Having made the decision that we weren’t going to be able to structure a deal with the Bank of California and were going to move out of that building, then I think it was very clear – and I think our behavior reflected this – that all things even being remotely equal, we would move into our client’s building,” Tune says.
All things turned out not to be equal.
The client was Herman Sarkowsky, Gateway Tower’s developer. Irwin Treiger, Bogle’s chairman, is one of Sarkowsky’s closest friends. Over 25 years, Bogle had worked on countless Sarkowsky business deals – his real-estate investments, his purchase and sale of Frederick & Nelson, the Egghead Software retail chain in which he is a significant investor, even Gateway Tower itself.
Over this past Thanksgiving weekend, Bogle moved into its latest Seattle quarters, the striking blue and alabaster tower called Two Union Square, owned not by Sarkowsky but by one of his competitors, Unico Properties. Before moving, Bogle listened to more than 60 offers and revisions of offers from six different prospective landlords. The firm was pitched everything from parking stalls to tax shelters. In the end, they lost a client and signed what is described by one of the people involved in the negotiations as the best lease in the history of the city.
Selig, the zoning laws and capital surpluses created the supply. The booming local economy created a demand. Together the two form a market, which, by classic free-enterprise theory, will at some point reach equilibrium. It hasn’t happened yet.
Supply has swamped demand. The developers say free enterprise within the local economy has been corrupted by the revamping of the zoning laws, forcing them to build when prudently they might otherwise have not.
Whoever is to blame, there is no question who benefits: downtown office tenants. The market became so enticing, the deals so rich, especially for big tenants, many planned moves into new buildings simply because of what they were offered. Led by Selig, developers were literally giving away the only thing they had to sell – space. “Free rent,” despite the oxymoronic nature of the phrase, became common as long-term leases typically included some initial free period.
One broker recalls sitting in a negotiation with a developer when the tenant asked for a period of free rent. The developer said: “I can’t do that. How about I write you a check for $150,000 instead?”
Such signing bonuses, which except for their size are equivalent to factory rebates on new-automobile purchases, were sometimes used as a way around restrictions a lender might have placed on rents.
“You get into just pure imagination. . . . The softer the market, the more complicated the deal,” says Craig Kinzer, a broker with the Norman Co., which Bogle hired to help it find new space. In a hard market, developers say, here’s the rent, here’s what you get.
Kinzer says the market was driven by the excess supply. “Maybe tenants that wouldn’t have thought to move, or wouldn’t have thought to expand, began to be lured into the promised land by all these developers,” he says.
The deals fed upon themselves, encouraged by the circulation of what Kinzer calls “cocktail rents.”
Accountant Jones, for example, might ask Lawyer Chang what his firm is paying for the three floors it is about to lease in the Bothell Bank World Headquarters. Chang says $24 a square foot. Jones is incredulous.
“You’re paying 24 bucks in that fleabag? We’re only paying 16 in the new, gold-plated Atlantic West Tower.”
Rents are a complicated subject. They are typically scaled to increase dramatically over the length of a lease and up the height of a building. A quoted rate might or might not reflect cash inducements; it might or might not include free parking, lavish interior finishes, renewal options or guaranteed expansion space.
These complexities notwithstanding, the next day Chang, unaware that Jones is in the basement of the Atlantic Tower subleasing uncarpeted space with a view of the garage, is on the phone to his broker, wanting to know why Jones is only paying $16 a square foot.
Developers went to elaborate lengths to sell their buildings, courting the tenants and the brokerage community at breakfasts, lunches, dinners and cocktail parties, giving gifts, presentations and tours. Some built lavish marketing centers with huge models and video presentations.
They also went to elaborate lengths to denigrate the competition. If a law firm was looking at Pacific First Centre, which is in the retail center of downtown, Selig would say, “Do you really want to be in the garment district? In turn, everyone questioned Selig’s financial stability. And if some prospective tenant said he was thinking of moving to Gateway, a competitor might ask when, “Do you really think it will actually get built?”
Competitors did such a masterful job of introducing Gateway into the market as “the building behind Columbia Center” that some prospective tenants are surprised, once they tour the building, that the entire western horizon isn’t blacked out. Karlis Rekevics, one of Gateway’s architects, says designers were forced to find a way to make their building “a little different than everyone else. It becomes marketing.”
“We agonized over what would make Gateway unique,” he said. “So Fred (Bassetti) cut a notch out (of the top), and I said, `Well, why do you have to mutilate something to make it unique?’ Moshe Dayan had one eye, but that wasn’t what made him unique. And he didn’t cut his own eye out.”
Gerry Gerron, designer of Pacific First Centre, says architects and developers “construct a series of little edges.” First Interstate Center, for example, was the first high-rise in town to have granite counters in the restrooms. “Formica obviously makes much less a statement,” Gerron says.
Obviously. If you didn’t have granite johns, you might as well have had outhouses.
This little series of edges is examined in great detail by prospective tenants, or by brokers on their behalf, and developers build their buildings knowing they have to pass those tests. Gateway’s marketing people stress the building’s efficiency, it’s distinctive glass-roofed design and amenities that include an athletic club and conference center.
Dave Cortelyou, chief operating officer of Unico, says the design of Two Union Square was “market-driven entirely,” based in part on the results of a survey of Unico tenants. It is hard to imagine any tenant telling Cortelyou she wanted a blue and alabaster building shaped like a Bic lighter with yellow stripes down the side. And, in fact, none did; but many expressed a desire for diversity, and thus the color scheme was chosen. They also said they liked as many corner offices per floor as possible, and a typical floor in Two Union has 10 of them.
“There is an impact of keeping the corners open,” says Don Covey, Unico’s president. “Who makes decisions about renting office space? It’s the people who are in the corner offices.”
A 63-year-old neophyte in the high-rise development business, Sarkowsky admits to sort of wandering into this arena without any clear ambition or plan other than to diversify his investment portfolio.
He had spent 25 years as a builder of homes and small commercial properties before leaving the development business in 1974. He has since shown remarkable instincts as a broadly based investor in everything from stocks and bonds to Thoroughbreds and linebackers. He acquired the site Gateway Tower is being built on at Sixth Avenue and Columbia Street as part of a deal to salvage one of his rare bad investments. With it he also acquired more headaches than he had ever imagined. Low-income-housing advocates picketed his house. Banks shied from his project. Friends snickered he had gotten in over his head.
To a certain extent, he agrees. He began spooning money into the project in 1979, and the spoons soon turned to shovels. Eventually, he had sunk almost $20 million into what at that point was a parking lot leased to Joe Diamond. The money, spent on the land, low-income housing replacements, lawyers, architects, plans and permits, forced Sarkowsky to build the building.
“Sometimes,” he says, “buildings are built because that’s the only way the developer can get his money back.” Getting that money back was delayed greatly by the difficulty Sarkowsky had finding financing for the project. The financing, in turn, was difficult to find because the project had no tenants.
Commercial lenders typically require at least a quarter of the space in a building, and sometimes as much as 40 percent, be leased before they commit to a project. Rent is the only income a high-rise has, and without tenants a lender risks not getting paid.
Geraldine Kraft, a broker Sarkowsky hired to help develop and lease Gateway, says Sarkowsky had no enthusiasm or special talent for selling the building.
“Herman would do only what he had to. He had no feel for it and no desire to do it,” she says. She cites as an example a dinner presentation she had arranged for Lane Powell Moss & Miller, a law firm.
“I had reserved the Rainier Club from 5 to 7. All the (law) partners were going to be there. It had been set up for weeks. That afternoon Sarkowsky says, `Well, how long do I have to stay? Can I be home by 6 because we’re having company for dinner?’ ”
“We always seemed like a mom-and-pop operation,” Kraft recalls. “One presentation with Fred Bassetti (the lead architect) had Fred up there with a sample of the red granite when the marketing materials still showed it as a white building.”
Sarkowsky showed somewhat more enthusiasm when Kraft was courting AT&T. The communications giant wanted to consolidate operations it had scattered in four locations. The company was looking for 125,000 square feet, which would amount to a sixth of the office floors at Gateway.
“In a new building, somebody who rents 1,500 feet has no clout,” says Jack Emick, a partner in Emick/Howard, a local space-planning and design firm. “When you get around 4,000 feet, the whole world changes. It changes again at about 8,000 feet, changes again when you get full-floor tenants (13,000 to 20,000).”
Tenants the size of AT&T are not even in the same universe. Called anchor tenants, they legitimize projects and in many cases give lenders the assurance they want to lend money. AT&T looked at five buildings in Seattle: Gateway, Columbia Seafirst Center, Washington Mutual Tower, Pacific First Centre and Two Union Square.
One of the things the company was looking for was a building that could wear its name. Since Columbia Center already had a name tenant, Seafirst, it was quickly eliminated. Washington Mutual Tower, which at that time was known as 1201 Third Avenue, was eliminated in part because AT&T wanted what is known as an enhanced lease, the ability to share in the ownership of the building, and 1201’s anchor tenant, Perkins Coie, had already extracted that benefit from developer Wright Runstad.
Two Union Square had given away nothing, and it had no tenants. It demonstrated why not in its proposal to AT&T. Unico, the developer of Two Union, had for three decades managed the Metropolitan Tract, a 10-acre parcel in the middle of downtown owned by the University of Washington. For 40 years, Unico did not own properties, it managed them. And when the company decided to begin developing properties outside the tract, competitors say, it was slow to catch up to the competitive realities of the times.
The AT&T competition narrowed to Gateway and Pacific First Centre (then known as Stimson Center). AT&T liked Gateway’s location adjacent to Interstate 5, which it saw as both convenient and a significant advertising benefit. Gateway also made the best – that is, cheapest – proposal, according to Tom Schiable, an AT&T vice president.
According to information compiled from various sources, AT&T was given rent at an initial average cost of about $17 a square foot, the right to a share in the profits of the building if it is sold (or a straight cash payment one competitor estimated at $6 million if the building is not sold within nine years), and a $600,000 cash bonus to sign the lease. The company was also given the right to put its name on the project.
AT&T, Schiable says, made a heckuva deal. “Fortunately for us,” he says, “we usually do.”
Bogle and Gates’ 72 partners were well aware of the activity whirling around them. You couldn’t spend 10 minutes at the Rainier Club without somebody talking about some new deal. The firm began receiving unsolicited offers from Gateway and Two Union Square in the summer of 1986, three years before its Bank of Cal lease expired.
The Seattle real-estate market had functioned as an old boys’ network for generations. In the pre-Selig era, personal relationships had predominated, so it was not out of the ordinary for Sarkowsky to pick up the phone, as he did in February 1987, and call his friend and lawyer, Irwin Treiger, to ask what it would take to get Treiger’s firm as a tenant.
Kraft, Sarkowsky’s broker, had been pursuing Bogle and Gates for six months without progress. The call from Sarkowsky was an attempt to short-circuit the courtship and move directly to an arranged marriage.
“We never assumed it was automatic,” Kraft says. “We knew the deal had to be competitive. We started out strong and it deteriorated. It wasn’t handled real well on our part.
“Herman had a relationship with certain members of the firm, but there was a group of young Turks who he didn’t even know. Treiger early on presented the case for Gateway: The firm should, because of the relationship, move there unless there’s some significant reason why not. That’s the way the deal started out.
“But Bogle knew all the problems because it was handling all the legal work for the building. They knew all the problems with the financing.”
Gateway might have seemed like a mom-and-pop operation to Kraft largely because it was. While other developers were producing videos extolling their products, Gateway’s marketing center was a room with blank walls up until this summer. Sarkowsky says he was never particularly worried about the marketing. He was more concerned with getting the building built.
For more than a decade, Sarkowsky Investments’ payroll consisted of Sarkowsky, a secretary, a bookkeeper and at most one or two others. It is not a development organization, and Sarkowsky did not intend it to become one.
Recognizing that he had never undertaken anything the magnitude – in size or value – of a skyscraper, Sarkowsky recruited as partners First City Development of Canada and Kumagai Gumi of Japan. First City’s job was to obtain financing and to market the building. Kumagai’s was to build it.
By the time they entered the project, it was clear to everyone involved that Gateway, if built, would enter a tough market. Despite the growth in the local economy, says Jack Shaffer, a New York investment banker who helped put the Gateway partnership together, “you are a one-industry city. Your second-biggest industry is what, a university?”
“But what you’ve got here is staying power, which is what you need.”
The staying power Shaffer refers to are the deep pockets of the partners. First City is controlled by the Belzbergs, one of the wealthiest families in North America, and Kumagai is the sixth-largest general contracting-development company in the world. With Sarkowsky, they combined to contribute $30 million to the project, a commitment sufficient to persuade a consortium of Canadian, American and Japanese banks to lend them $165 million. The total $195 million is supposed to be sufficient to build the building, market it, pay interest on the loan and cover operating losses until the building is filled with tenants.
This is anticipated to be a five- to seven-year process, and at times it seems the partnership intends to use every day of it.
Gateway’s problems notwithstanding, Bogle’s leadership agreed with Treiger. Unless there was a compelling reason to go elsewhere, they would move to Gateway. With the Norman Co.’s assistance, Bogle developed what it called an “acceptable offer,” an estimate of the type of deal that could be struck in the market. It was “aggressive, but not ridiculous,” Kinzer, Bogle’s broker, says.
If Sarkowsky would agree to it, Bogle, without soliciting offers from anyone else, was his. Bogle detailed Jim Norman, the Norman Co.’s president, to present the offer to Neil Hokonson, First City’s representative in the Gateway ownership. Norman got “half, maybe a third of the way” through his presentation when Hokonson told him he had heard enough. The “acceptable offer” was ridiculous, Hokonson told him.
Fine, Norman said. Bogle would “go to the market.”
Fine, Hokonson said. See you there.
Bogle then set about soliciting proposals from a half dozen different developers, including Sarkowsky. An exhaustive Norman Co. analysis of the offers, festooned with computer modeling, charts and graphs, cut the list of buildings to three – Gateway, Two Union and Pacific First Centre.
Pacific First was rated the best deal financially, but the space Bogle would take in the building was beneath that occupied by Lane Powell, another large law firm. This didn’t sit well with some partners who disliked the image of being below another firm. Also, Pacific First’s views were not as good as the two others, and any future Bogle expansion within the building would require renting space on a separate elevator bank, an inefficient arrangement.
View is not an irrelevant consideration. Building rents typically increase from a quarter to 50 cents a square foot for each floor as one goes up in a building. As a result, Covey says, “any building generally leases from the top down and the bottom up. The middle floors are last to lease. People are either price-conscious or view-conscious.”
Bogle was both. Since none of the three buildings was actually built at the time of the negotiations, Kinzer hired photographers and chartered helicopters to hover above each site at precisely the altitude of Bogle’s floors. Then he began to negotiate high-rise views at low-rise rents.
Two Union, which was offering the top floors in the building, had the best views, a virtually unobstructed 360-degree panorama. The building was rated about equal with Gateway on several other subjective measurements, but Gateway’s financial package was somewhat better, Tune says. That, plus the fact that Sarkowsky was “a valued friend and a valued client,” led a committee of Bogle’s senior partners to recommend signing a letter of intent with Gateway.
The full partnership of the firm met on a rainy Saturday morning in December 1987, and debated the recommendation for six hours. In a vote weighted according to the number of shares in the firm each partner owned, the partners narrowly endorsed the recommendation and instructed Tune to draft a letter of intent with Gateway, provided Gateway could assure the firm the building would be done by the end of November 1989, when Bogle’s Bank of Cal lease expired. Failing that, Gateway would have to guarantee it would cover any costs Bogle would incur in extending its lease.
“This was the first time we began putting things in writing for Herman,” Tune says. “We’re talking about big, big dollars that would impact us.”
Big dollars, indeed. The total value of the leases Bogle was negotiating, with renewal options up to 20 years, was in excess of $75 million. Sarkowsky was happy to receive the news from Tune but was displeased by a phrase that said Bogle would proceed with him “absent a material change” in any other offers.
“When you think you have a deal and the guy says, `Let’s get a letter of intent drafted,’ and then the letter of intent, the last paragraph, says we reserve the right to look at any other deal provided there’s enough of a difference. I should have never gone along with it,” Sarkowsky says.
“That’s like a guy going out to bid and saying my bid is one dollar lower than the lowest bid you’re going to get. Why bother? . . . It seemed to me that they were going through the process without any real class. I thought it was a lousy exhibition of how you do these things, and I helped the process and I never should have. And I kick myself for that.”
Three weeks later, a material change did in fact occur. Two Union, which at this point was still looking for its first tenant, revised its proposal, offering what the real-estate grapevine said was a huge cash payment and an unheard-of 15 years of free parking.
The new offer got Bogle’s attention, and Tune scheduled another partnership meeting to discuss it. Politicking within the firm was intense. Senior members exerted strong pressure to go with Sarkowsky. A lot of the junior partners weren’t so convinced. They didn’t know him, didn’t much like his building and thought free parking for most of their careers wasn’t a bad idea. Once again, however, the vote favored Sarkowsky. But this time the condition that Sarkowsky provide assurance on the Bank of Cal lease was worded even more strongly. The vote was held Feb. 29, 1988, and it was clear by this point that Gateway would not be finished in time to meet their move-out date.
A week later Tune met with Sarkowsky, who reviewed and, Tune thought, agreed to the terms. On March 11, Tune met for the first time with Hokonson.
“I came out of that meeting a bit shaken, and I was shaken because for the first time I heard someone say to me, `Well, gee, we’re not sure we can offer you that sort of assurance on the Bank of California lease,’ ” Tune says.
“I guess my view is that perhaps Neil felt that the general terms that had been discussed were discussions, and everything was still up to be negotiated. Whereas, what I had in fact presented to our partners was what I had perceived to be a fairly solid deal that had been negotiated.”
A month later, still not having gotten what it perceived to be satisfactory assurance on the Bank of Cal lease, Bogle through Norman reopened negotiations with Unico about Two Union. At this point, Bogle began negotiating directly with the developers’ banks, seeking assurances on the Bank of Cal lease. The Bank of Montreal, Gateway’s lender, never agreed. Two weeks later, on April 25, Bogle and Unico signed a letter of intent to draft a lease.
Gateway’s final proposal to Bogle was actually a somewhat better deal for Bogle than Bogle’s “acceptable offer” proposal made a year earlier. Gateway had moved millions of dollars in that year, but by the time they arrived, it was too late.
Bogle was gone and Sarkowsky was left at the altar.
Jack Shaffer, Sarkowsky’s investment banker, says, initially not intending it as a compliment, that Hokonson uses “accounting techniques on a deal that’s emotional.” Shaffer then ponders for a moment and adds: “But it’s a good thing. He became the mortar that held the bricks together.”
Hokonson is an accountant by training. He does not attempt to paint himself as anything other than cold-blooded when it comes to real estate.
“Success is the ability to define risk and return and to structure a deal that will deliver it,” he says. “I try to take the emotion out of real estate altogether. It’s a business to me. Real estate just happens to be the medium.”
Some who have negotiated with Hokonson say there is very little negotiation involved. He sets a deal in his mind, then refuses to budge, they say. One person who has done other business with First City says Hokonson is simply doing his masters’ bidding.
“The Belzbergs are not that easy to deal with,” this person says. “You say you want a dime, OK, here’s a dime. Then they say, `What we really meant was we want 12 cents.’ So you give them 12 cents. They say, `Actually, what we meant was 15 cents.’ ”
In a sense, Sarkowsky didn’t lose Bogle to Unico. He lost them to Selig, who had defined a market Hokonson refused to deal in. But what Selig took away, he also gave back.
If, as Woody Allen says, 90 percent of greatness is showing up, Curt Ghan, Gateway’s marketing director, did a helluva job of coming to work last Feb. 21.
Ghan received a letter that day from Cerissa Merritt, the Cushman and Wakefield broker, who said she had a client with, as they say, “a large requirement,” 100,000 square feet.
“We didn’t know who it was and couldn’t figure it out,” Ghan says. A week later Ghan was giving Merritt and her client, Key Bank, a tour of Gateway.
“Key Bank,” Ghan thought. “Nah, they’re not moving. They’ve got a building named after them.”
Key Bank is the anchor tenant in a Martin Selig building, Key Tower, built expressly for the Seattle Trust bank on Second Avenue three years ago. Before Seattle Trust ever moved in, it was purchased by Key Bank of New York, which inherited the lease Seattle Trust had signed with Selig. The lease called for the bank to pay $25 a square foot, which its new officers thought was too much. The lease was written as a five-year commitment with options to renew for up to 30 years.
Selig admits the rent is above market rates but says he and the bank agreed to above-market rent as a means of offsetting Selig’s purchase of the property on which the high-rise was built. He says he had an oral agreement with Seattle Trust that the renewals were mere formalities. He threatened to sue the bank if it failed to exercise its first renewal.
What Selig did not tell Key officers was that he had developed acute cash-flow problems and for the first time was going to sell one of his high-rises. Key Tower, fully leased at high rents, was an excellent candidate. Japanese buyers, in fact, came to town to investigate the building.
When Key Bank went through with its threat to look for other space, the buyers fled town and Selig sued.
Within a month of the lawsuit, Gateway’s new lawyers – not Bogle and Gates – were drawing up a Key Bank lease. The key to the deal, Merritt says, was Sarkowsky. Key Bank officers felt wounded by Selig’s treatment.
“They needed a little romance,” she says. “Herman’s personality really solidified the deal. The bank needed a personality. They felt abused.”
“Key Bank came out of left field,” Ghan says. “I didn’t really think they were moving and wasn’t making an active marketing effort. . . . I guess I’m an optimist or I wouldn’t be doing this, but after we signed Key, I thought: If we hadn’t gotten them, who would we have gotten? Who’s left out there?”
Rob Swartz, a broker with Coldwell Banker, says the real art of selling space is in knowing the market.
“The guy who meets the market soonest is the guy who makes the deal,” he says. He recalls Daon, a Canadian development company, trying to resist the downward slide of rents. When presented with lease proposals tenants were getting from Selig, Daon representatives “kept sitting there saying, `Selig’s crazy.’ Every time he made another deal, they’d say, `Selig’s crazy.’ Well, he might be crazy, but they’re the ones who went broke, sitting there not making deals.”
Daon didn’t actually go broke, but it accumulated huge debts and eventually sold its major office projects here at what is presumed to be a loss. Of course, the Daon representatives might also have been right about Selig, whose wheeling and dealing, given his current circumstances, does not seem to have made much economic sense.
Hokonson, too, might be right. With recently enacted limits on the amount of new office space that can be built downtown, Gateway might be the last high-rise to be built for some time. It might, through a combination of luck and courage, have weathered the glut and be perfectly situated in the market.
On the other hand, the same thing that happened after the 1985 rezoning could happen again. Before another rezoning earlier this year, another group of buildings was allowed to proceed under the old rules. They could all be rushed into the market not because of demand, but to protect development rights.
But with all this other space still available, lenders wouldn’t give anybody money to build more, would they?
The new zoning laws allow only a certain amount of new downtown office space to be built each year. Early this month, the city made the award of that space for the first year under the new law to Martin Selig.
With all of his problems and all this other space available, lenders wouldn’t give him the money to build, would they?
Would they?


Rocks can freeze, Italian longshoremen can strike, Burmese rebels
agitate, interest rates rise, partnerships disintegrate, steel shrink,
concrete crack, and parts of bodies become separated from their owners.
All these things can happen and, in fact, did in the course of
building the 62-story AT&T Gateway Tower at Fifth Avenue and Columbia
Street in downtown Seattle.
The range of risks encountered in building a skyscraper is
instructive. Each risk, when realized, has some cost, and each cost is
unevenly distributed.
For example, Herman Sarkowsky, developer of Gateway, did not
pay much attention one sunny day last summer when Spuds Cline, an
ironworker, got a finger caught between two pieces of steel. When the
steel moved and the finger wouldn’t, Cline lost part of it.
Cline cared a great deal about the finger, but wasn’t
particularly worried about the effect the collapse of the Japanese
stock market might have on interest rates, a process Sarkowsky follows
To Sarkowsky, cost is financial, a function of time or
materials. To construction workers like Cline, cost is more personal.
“How many jobs,” asks Jon Hagwood, Gateway’s construction
superintendent, “do you drive to work in the morning where you might
not come back at night?”
Construction is governed by the interplay of cost, risk and
responsibility. Builders try to estimate the first, contain the second
and assign the third.
As in much of life, it is easier in construction to be assigned
responsibility for failure than for success.
“Construction,” says Fred Bassetti, architect of Gateway, “is
largely a matter of figuring out who to blame.”


The Sears Tower in Chicago, at 1,454 feet, has been the tallest
building in the world for 16 years. This is not because no one knows
how to build a bigger one.
Engineers confidently predict they could build structures twice
that height, buildings soaring (or looming, depending on one’s
perspective) more than half a mile into the air.
Given this dazzling technical virtuosity, there is to the
outsider a perverse comfort in learning that the people who build tall
buildings face a fundamental uncertainty when they undertake their most
rudimentary task: digging holes.
In some sense, they say, taking the ground apart is more
difficult than putting a building together. A builder’s risk is
greatest “anytime you’re trying to anticipate costs you can’t see,”
says Rick Redman, president of Sellen Construction, one of Seattle’s
largest construction companies.
Soils engineers, taking into account local geology and
history, try to foresee what will happen when holes are dug, but the
earth is dark and hides its secrets well.
“Dealing with soil is unlike dealing with steel or concrete or
other materials engineers are accustomed to using,” says Paul Grant, a
local soils engineer. “Steel, for example, can be made uniformly to
whatever strength you desire. That’s not true with soils. They may vary
from spot to spot. Or be layered.”
“You find things you didn’t know,” says Dick Clotfelter, a
local developer. “You can get a fixed maximum (price) on materials.
Not on the ground.”
The risk of digging is exaggerated by its place at the head of
the construction schedule.
“If we screw around with the hole, we back up the whole job,”
says Bruce Hanson, the man who did Gateway’s excavation.


In most places on the planet where anyone would be tempted to build
anything tall, the surface of the earth has been hardened by time and
activity into a crust. People seldom know how deep or how even this
crust is or what will happen when it is removed.
They know, broadly speaking, what sorts of things can happen
when they dig. They also know that most of them are bad.
The first category of bad things involves the movement of the
earth. Cutting the crust can and often does release the material
beneath it, and that material, once the dirt above it is removed,
rises, or, as engineers say, rebounds.
Imagine at the extreme a jack-in-the-box. The crust of the
earth functions like the lid of the box, compressing the spring beneath
it. When it is opened, the spring rebounds. The earth never moves quite
that suddenly, but in some areas its movement is significant. In the
Mississippi delta regions of Louisiana, for example, the soil is
notably expansive, and when you dig in it, “it just keeps on coming
out,” says John Skilling, a Seattle structural engineer.
Sometimes the earth moves in other directions. Cutting the
crust releases pressure, and as the pressure escapes, the soils sink
and slide along the lines of previously existing, but unseen, fissures.
For example, when Interstate 5 was built in downtown Seattle in
the 1960s, the trench built through the city cut across several of
these fissures. Numerous buildings adjacent to the excavation moved
toward it. When the excavation for the Seattle Municipal Services
Building was dug in 1961, the adjacent portions of Fifth Avenue moved
down – that is, the street collapsed.
Sometimes, when the engineers have been smart or lucky, or
both, nothing happens when they dig. The earth stands still. They have
not at this point, however, escaped danger entirely. Even when the
earth itself doesn’t give them problems, things that other people have
put there do: sewer lines, water mains, gas pipes, foundations of old
buildings, tunnels, graves, artifacts, even, in one notable case in San
Francisco, a ship.
In some areas – New York City, for instance – archaeologists
are often assigned to excavation crews to ensure that valuable
artifacts are recognized as such. Some excavations have been halted for
months while historians puzzled over what was uncovered.
Seattle, a much younger city, does not have so much of its
history buried, but encounters with the past are not unheard of. When
the site for the Washington Mutual Tower at 1201 Third Ave. was being
excavated, crews were slowed when they ran into the foundation of a
building no one knew had been there. They never were able to figure out
what it was.
The soils of downtown Seattle range from sands and gravels,
which Grant classifies as “pretty good actors,” to a variety of
clays. The worst of these clays are fractured into large clumps, and
the individual pieces have extremely slick – both in appearance and
behavior – sides. Thus they are called slickensides and can be, Grant
says, “very bad actors.”
An analysis of the site for Gateway predicted that the “major
portion of the excavation should expose glacially preconsolidated
fine-grained soils . . . a clay layer 60-80 feet deep, underlain by
dense sand and glacial till.”
That was the scientific description. Bruce Hanson is a dirt
guy, not a scientist. He digs holes for a living, and this gives him a
distinctive world view. Most of the people involved in building Gateway
Tower view Columbia Seafirst Center, immediately across Fifth Avenue,
as an obstruction, a mammoth object in the western sky.
Hanson sees it as “the hole across the street.” That hole,
the biggest he has ever dug, contained 240,000 cubic yards of dirt.
Making such a hole involves two activities: digging dirt and
ensuring the dirt stays dug. These are known in the business as
excavating and shoring. As the excavator digs, the shoring contractor
builds a wall of steel piles and wood planks, known as lagging. This
shoring prevents dirt from falling into the hole.
As a rule, says John Battle, the Gateway project manager, “the
dirt guy and the shoring guy hate each other.” Hate might be too
strong a word, but they certainly have different perspectives.
Consider sand. Hanson loves it: It’s easy to dig, doesn’t stick
to his equipment and, best of all, he can usually find somebody to buy
it after he digs it.
Russ Podmayer hates sand. Podmayer, vice president of drilling
operations for DBM, the Federal Way contractor that handled the shoring
on Gateway, says sand simply won’t stay out of a hole. Now clay,
there’s good dirt, Podmayer says.
“It’s almost like drilling in heaven,” he says.
“It’s like digging in shit,” Hanson says. “It sticks in the
bucket. Sticks in the shovel. Sticks to the wheels. The city’s on your
back because you got to keep the streets clean. Nobody wants to buy
As they chase each other down the hole, each dependent on the
other, the digger and the shorer constantly get in each other’s way.
“In a small hole, it can get tight,” Hanson says. “Every
damned shoring contractor seems to bring every damned thing they can
find down into the hole – an 80-foot auger, which is always in the way,
forklifts, backhoes, everything they can find.”
The auger is used to drill what are called tiebacks. To keep
the shoring wall from collapsing, the shoring contractor drills up to
80 feet laterally into the sides of the excavation. He inserts a steel
cable into the hole he has drilled and pumps concrete in to surround
the cable. Friction between the concrete and the surrounding earth
holds the cable in place. The cable is pulled tight and clamped to the
wall. The cable counteracts the tendency of the earth to push the wall
into the hole. The wall holds the earth. The tiebacks hold the wall.
Hundreds of tiebacks might be made around an excavation.
Because they are often drilled in heavily developed areas, usually
under streets and other buildings, the driller runs a constant risk of
hitting things. On the Washington Mutual Tower, the shoring contractor
drilled into a sewer line. He discovered it only after pumping the
sewer full of concrete, backing up toilets all over the neighborhood.
Besides drilling into things, the driller runs the risk of
drilling into nothing. Keith Miller of the city engineer’s office
recalls being called out to the site of the excavation for First
Interstate Center just after rush hour one morning in 1982. The
contractor had inadvertently punched a hole in the sidewalk and found
empty space underneath.
He had earlier been drilling tiebacks into pea gravel under
Third Avenue. Unbeknownst to the drill operator, as the gravel was
augered out of the drill-hole, more would fall into its place. As long
as material kept coming out, the driller kept drilling.
Miller wanted to look closer to see how big a hole had been
drilled. He lowered himself down through the sidewalk. And disappeared.
He found himself walking through a cavern underneath Third Avenue,
wondering when the next Metro bus was due and just what the hell would
keep it from joining him in the hole.
The drilling had removed all of the dirt beneath the street,
which was kept from collapsing only by the utility pipes bridging it.
Miller ordered all traffic on the street halted immediately, and the
hole was eventually plugged with 110 cubic yards of concrete.
Gateway’s site was complicated by Interstate 5 access
ramps that cut through it. The ramps were supported by 8-foot-round,
steel-reinforced concrete columns. The tower’s foundation would replace
the columns, which had to be removed.
When Hanson wasn’t satisfied with the speed of the crew he had
hired to take out the columns, he bought a $50,000 hydraulic hammer
attachment for his backhoe and did the work himself.
By the time he was done with the entire excavation, he’d taken
one shovelful of concrete out of the hole for every dozen of dirt.
Breaking reinforced concrete is slow going, and the Gateway
management was pressing Hanson to speed up. The ownership had gotten
lucky with the excavation. The earth behaved and nothing unforeseen was
encountered beneath it, but, typical of the history of the project, its
biggest problems were self-inflicted.
Financing delays had imperiled the project for years, and they
had not been fully resolved by the time excavation began in January
1988. At one point, work was halted “because they ran out of money,”
Hanson said.
The site sat empty for two weeks while Sarkowsky and his
partners scrambled to tie down a $165 million construction loan.
Most of the city’s developers had given the Gateway project
a slim chance of ever being built when Sarkowsky announced it in 1980.
His inability to put together the financing over the next eight years
did nothing to alter this perception. Many people were more surprised
that work had ever begun on the site than they were when it stopped.
The loan difficulties were eventually resolved, but they put
the project behind schedule just as it started. This delay was hardly
Hanson’s fault, but until he got the hole dug, nothing else could
happen; and Battle, the project manager, wanted to catch up.
He did it by pushing Hanson, whom he calls, admiringly, one of
the “shrewdest, meanest guys in the world.”
“We pushed him and pushed him and all he did was get meaner,”
Battle says. And faster.


Jon Hagwood, the project superintendent for KG Construction,
Gateway’s general contractor, describes his first construction job:
“I had my little hard hat and my tools and stuff, went out on
a highway project and was earning $10 an hour as an apprentice. At
first, I really didn’t like it. Some hillbilly foreman screaming at me
all the time. He really didn’t have very good people skills.”
Hagwood says this with an apparent ingenuousness it would
normally be hard to imagine in a 6-foot-6 1/2-inch, 245-pound
construction boss, but he is well aware of the changes in the building
business implied in what he says. Twenty years ago, who would have
cared if a foreman had “people skills,” good or otherwise? His
principal qualification, in fact, might have been his lack of them.
Most of the people in construction had been born to it, sons
following fathers, chosen for their bloodlines, not their knowledge. As
society and construction have both become more complex, the people in
it have changed. Hagwood’s parents were white-collar, middle-class. He
had been a cinematography student before he went to work on a
construction site.
John Battle, Hagwood’s boss, is the scion of an Old South
political family and has an undergraduate degree in, of all things,
literature. He is given to talking about the dichotomy between
construction fantasies and realities.
“Estimates are done in heaven,” he says. “The project is run
in hell.”
Battle and Hagwood, as the leaders of the Gateway construction
operation, are charged with finding some middle ground between those
two points on the metaphysical map.
They are members of a transitional generation in construction.
Hillbilly foremen are fast being replaced by bright, young (and
sometimes dumb) college-educated “construction management
professionals.” Entire college curricula are now devoted to the
subject. Computer depictions of Critical Path Management schedules are
replacing hillbilly belligerence as the most frequently used
Entire development companies have been built upon strict
management regimes. Locally, the success of Wright Runstad is not so
much a result of brilliant building designs as it is rigorous
management of all phases of every project.
The Washington Mutual Tower, one of the most publicly admired
skyscrapers built in Seattle in recent years, is also envied within the
construction business for going from ground-breaking to occupancy in 19
months, one of the quickest high-rise schedules in history.
“There’s a lot of money involved. There’s a substantial
benefit to speeding up construction, on the order of a million dollars
a month,” says Steve Trainer, who managed the project for Wright
Battle and Hagwood are at some midpoint on the dirt-vs.-diploma
scale. Both started in the business as carpenters and converted to
management. Battle can scream and cuss with the craggiest old-timer,
but he holds a postgraduate architectural degree and wields his
Critical Path schedule like a diamond-tipped saw. Hagwood intimidates
just by the statement his body makes on the skyline, but tends to be a
cajoler rather than an enforcer.
Both are employees of KG Construction, an American subsidiary
of Kumagai Gumi, a Japanese firm that is one of the half-dozen largest
general contractors in the world. Kumagai, not coincidentally, is also
half owner of Gateway Tower.


As with almost every other aspect of the Gateway project, Kumagai’s
dual role as owner and contractor was not arrived at without
complication. Sarkowsky, the original owner of the project, had sought
partners for several years before signing deals with First City
Development of Canada and Kumagai.
In the meantime, he had been working with Howard S. Wright
Construction, a local company, as his prospective general contractor.
Kumagai invested $15 million in cash in the project, and as part of the
deal insisted its construction subsidiary share the general contracting
with Wright. The two firms established a joint venture partnership and
worked together through a year and a half of preconstruction planning.
The organization chart alternated between Wright and KG
hires. A Wright veteran, Clem Kynaston, managed the project, and KG
hired Battle as his assistant. It was a good fit. The two companies
worked together well in defining the work and lining up subcontractors
to do it.
“We sent letters of intent to all of the major subs, set
prices for elevators, mechanical equipment, electric, granite, windows,
window washing, fire prot done, despite all the delays.
“You never know when the job’s going to start. Especially this
one,” Battle says. “You want to gather momentum, but you want to keep
costs down.”
Suddenly, in the spring of 1988, when the excavation was nearly
complete and shortly before construction was finally set to begin,
Wright left the project, stating only that the parting was amicable.
Officials for the two companies agreed not to discuss it publicly, but
Wright people privately seethed. They complained that Kumagai Gumi had
used them to learn the local market and line up subcontractors, then
forced them off the job.
This was not simply a matter of pride. The general contracting
fee, which is generally set as a percentage of total construction cost,
is in the range of $2.5 million. Additionally, Wright had been a
subcontractor for $6 million worth of concrete work.
Whatever the reasons for the split, Wright had little choice in
the matter: KG’s parent was half owner of the building.
The immediate effect of the split was to empty half the jobs on
the organization chart and send Battle, who became the new project
manager, into a mad scramble to try to refill the Wright vacancies. As
much as 80 percent of the work on a high-rise is done by
subcontractors; the general contractor’s main responsibility is hiring
them and coordinating their activities. None of the subcontractors left
the job with Wright, but half the people charged with knowing what
those subs were supposed to do were gone.
One of the first things Battle did was bring Hagwood up from
California, where he had been working out of KG’s corporate offices, to
be project superintendent.
The superintendent and manager’s jobs mirror one another and,
in many respects, the larger process of building the building. Battle
wears a tie and spends most of his time in an office. One of his main
tasks is to bring the point of view of the workers to the owner and
architect. Hagwood wears jeans and spends most of his time on the site.
One of his main tasks is to bring the owner and architect’s point of
view to the people in the field.
There are conflicts inherent in the division between the
office, where the building is an intellectual construct expressed in
drawings, and the field, where the building is a physical construction
expressed in steel sticks and granite stones.
“The guys that do the work – the trades – all have a certain
mentality. They’re all product-oriented. They’re geared to it,”
Hagwood says. “They get frustrated when things get slowed down: `Let’s
do it.’ ”
When there’s a choice between speed and deliberation, the field
guys will choose speed every time. Sometimes they are difficult to
“In title, I’m in charge of the subs, but it’s like a lion
tamer in a cage,” Battle says. “Who’s in charge of whom?”


Once you have a hole, you need to put something in it, if for no
other reason than to keep the excavator from shoving the shoring
contractor into it.
Battle had been making plans to fill the hole for a year. He
prepared elaborate logistical sketches and marshaled resources as if he
were going to war. The departure of Wright was just one more element in
an already complicated calculus.
At 2 a.m. on Saturday, July 16, 1988, not coincidentally after
the bars had closed and a good 30 hours before the churches opened, 125
trucks began hauling concrete from eight different batch plants
scattered all over the Puget Sound region.
The trucks would drive more than 25,000 miles that night and
into the next afternoon, circling between the plants and the hole at
Sixth and Columbia. In 12 1/2 hours – the longest continuous concrete
pour in the history of the western United States – they filled a fifth
of the hole it had taken Bruce Hanson five months to dig.
The foundation pour had to be done all at once so that the
concrete would set all in one piece. It had to be done on a weekend
because the trucks would have backed up traffic to the Canadian border
if they had done it on a weekday. And it had to be done on Saturday
rather than Sunday because the Methodist Church down the block had
“I don’t know what we would have done if there had been a
synagogue in the neighborhood, too,” Battle says.
The original design for Gateway Tower had called for a
foundation made up of four large concrete piers sunk beneath the
excavation. The switch to a single 44-million-pound, 10-foot-thick slab
foundation had been made at KG’s suggestion because the mat delivered
equivalent structural integrity with less risk and cost in its
What a builder wants out of a foundation is stability, which is
a function of the foundation itself and the soil on which it sits. A
mat foundation typically will settle less than one with spread
footings. Think of it as the difference between pounding dirt with a
mallet and pounding it with a knife.
Soils can be heavily compacted to form what amounts to a solid
mass. When this compacting has already been performed by glaciers, such
soils are called preconsolidated.
Other soils have to be consolidated by man. In some cases this
is done by “preloading” a site with enough weight to compact it,
somewhat like sitting on a suitcase in order to shut the lid.
Gateway’s site was fortunate. Huge glaciers had lain over it
during the last ice age, consolidating it. It would easily bear the
foundation and the building that would go atop it – 129 million pounds
in total – and be expected to settle less than an inch.


Neil Hokonson, one of Sarkowsky’s partners, says the main risks in
building a tall building are two: that a developer will misjudge the
market for his product and that the cost of his basic commodity, money,
will surge out of control.
“The physical building of this building is the simplest part
of it,” he said last spring. “You get a bunch of construction guys,
architects and engineers, put them in a room and tell them to bring out
a building. Then you keep saying no until they bring out what you
Right, this is the easy part, ironworker Paul Cline said
shortly thereafter, leaning out from the building to rein in a wayward
beam, his body separated from the ground by a thin steel cable and 600
feet of empty air. Cline’s sarcastic judgment was echoed by others over
the past year as they molded 64,500 tons of materials into a building.
Hokonson’s was a statement more of optimism than arrogance. He
simply refuses to accept the fact that construction contains dangers
equal to his financial risk. It was also a statement of the obvious
fact that without financiers, there would be no buildings to build.
A version of this opinion is held by almost everybody in the
business. Members of each trade – from masons to elevator operators –
feel theirs is the critical work. This is due in part to a prevalence
in construction of what Battle calls traditional values, foremost among
them pride.
“What we do is empirical,” he says. “One of the sources of
our pride is it’s right there. You can see it.”
Along with the pride, the members of each link in the
construction chain commonly feel unappreciated by the others.
Paul Dias, who helped design the mechanical and electrical
systems for Gateway, is astonished that people are unaware of them.
“Here you have all these wonderful, complex systems, and nobody wants
to know they’re there.”
Bill Greenwood, an executive of Spider Staging, a Seattle
manufacturer of window-washing equipment, is exasperated by what he
feels is the lack of respect his equipment receives. “Architects
refuse to even think about it,” he says. “Some New York apartments
have been designed without any at all.”
(Gateway was little different in this respect. Karl Rekevics, a
member of the architectural design team for Gateway, says he tried
unsuccessfully for years to get Bassetti, the lead designer, to focus
on where window-washing equipment should be installed and stored.
“I’ll not let some damned window washer design my building,”
Rekevics recalls Bassetti saying. In the end, of course, the
window-washing equipment had to go somewhere, and it ended up being
stored under the peak of the distinctive glass gabled roof. Bassetti
had gone to great lengths and great expense to the owner to move
cooling and air-conditioning equipment that normally occupies the top
of high-rise buildings so he could create grand, dramatic interior
spaces in this peak. Closets for window-washing equipment were not
exactly what he had in mind.)
Ironworkers are exceptions to this feeling of being spurned.
“Everybody thinks they’re tough . . . ,” Hagwood says. “The
ironworkers think they’re the toughest.”
Paul Cline typified that toughness with an iron-headed view of
life. When a steel beam cut off part of his son’s finger, Cline
retrieved it and took it to the hospital to be sewn back on. When
surgeons told him that was impossible, he shrugged.
“The kid wasn’t going to be a piano player anyhow,” he said.
One day not long afterward, Cline was showing a visitor around
the erection deck, which by then was more than 500 feet up in the air,
when they stepped on a section of temporary flooring that began to give
way to their weight.
The visitor jumped. Cline calmly stepped aside, probably
feeling more endangered by the nervous guest than by the wavering
“You gotta die from something,” he said.
Six months later he did. Paul Cline and three other ironworkers
were killed when a tower crane collapsed at a San Francisco high-rise
site. The crash was a harsh reminder of the perils of the high wire
they had chosen to walk.
As crucial and sometimes dangerous as it is, the process of
hanging iron is relatively simple and well-understood.
The steel for Gateway had been ordered more than a year before
construction started – before, in fact, anyone knew that construction
would ever start.
“Steel takes six months to a year to fabricate. We had to make
the order,” Battle says. The risk for this gamble was borne by the
steel contractor, Canron, a Canadian company that had ordered the steel
without a guarantee of ever being paid.
Other materials were ordered on a similarly speculative basis.
These bets were placed solely on Herman Sarkowsky’s reputation as an
honorable man.
“The minute Herman signed the (construction) contract he spent
$30 million,” Battle says.
John Skilling, Gateway’s structural engineer, specializes in
designing skyscrapers that are extraordinarily light. He does this
mainly by minimizing the amount of steel, cutting both material and
cost from the structure. He uses elaborate computer models to trim each
piece of steel and substitutes concrete for steel in the main columns.
This approach requires that virtually every piece of steel be a
different size, which is more of a problem for the steel fabricator
than for the erector. By the time the steel arrives at the building
site, it is precisely labeled, presorted and presumably ready to go up.
“It’s an erector set,” says Eric Rowe, the Gateway project
engineer. “You bolt it together.”
The main variable in its erection is the amount of cutting the
ironworkers have to do to make it fit together.
“Ideally, you’d never put a torch to it,” Rowe says. The
Gateway steel – fabricated in Portland, Ore., Vancouver, Wash., and
Bangkok, Thailand – was not ideal, but close to it, says Rod Sutton,
who ran the job for The Erection Co.
The raising gang, working six 10-hour days to set 500 pieces of
steel a week, went as fast as it could using a single crane to lift the
steel into place.
Steel erectors, like virtually all subcontractors, bid for jobs
based on estimates of time. Almost all subcontracting contracts are
given to the low bidder, who presumably has given himself the narrowest
Time is money. Too much time is bankruptcy. This leads to a
certain sense of urgency. The faster the crew is able to throw the
steel up, the more profit the company earns. Adam Jones, The Erection
Co. owner, is a former ironworker, and his company has made its
reputation and Jones a fortune through speed.
He pushes for it and has been criticized (and fined) for
sacrificing safety in its service. The workers, rather than
complaining, take pride in speed.
“This guy was an ironworker for 20 years. He treats us
better,” Paul Cline said of Jones. “You couldn’t ask for a nicer guy.
The only thing you got to do is work your ass off.”


The raising gang’s long-distance conversations with women working
inside Seafirst Fifth Avenue Plaza directly across Columbia Street were
interrupted last year when a blizzard shut down the site. The
conversations, conducted via pantomime and placards, tended to
emphasize the company’s motto: We can get it up.
When the crew came back after several days, it was greeted by a
sign in a window across the way asking, “Why can’t you do it in the
The steel work, in fact, could have proceeded regardless of the
temperature. The accompanying concrete pours could not. In Skilling’s
design, each of four 9-foot-thick steel columns was to be filled with a
special high-strength concrete. Additionally, the steel erection could
not outpace the pouring of the concrete slab on each floor, since the
slabs were an integral part of the structure.
At one point, a prolonged cold spell threatened to halt the
entire job before a substitute supplier devised a way to heat rock and
keep making concrete. At another point, steel fabrication in Portland
was stopped when the Department of Defense demanded that the fabricator
drop everything it was doing to rush a government job. Jones set up a
yard on the Seattle docks and picked up the fabrication work himself.
Steel work was allocated eight months on Battle’s 28-month
timetable. Jones lost a month to weather and still met the schedule.
Although the notion of a “critical path” sounds like a New
Age road to enlightenment, it is merely an elaboration of the age-old
sequential nature of construction. You cannot, for example, put windows
in a building before you have erected the structure.
Battle likens the critical path to the turkey at a Thanksgiving
dinner. Almost any other item on the menu can be done too soon, too
late, or not at all, and its effect on the dinner will be marginal. But
if the turkey gets delayed, so does dinner. And in the case of a
commercial building, if the guests don’t eat, they don’t pay rent. The
owner is always in an urgent hurry to get paying customers in the door.
The critical elements on the path toward Gateway’s completion
included the digging and pouring of the foundation, erection of the
frame, installation of the elevators, application of the granite and
glass skin, and, still to be completed, the testing of all the
electrical, mechanical and safety systems.
The only crucial element that threatened to turn into a turkey
was the skin.
John Tawresey, an engineer whose expertise is designing
high-rise exteriors, which are called curtain walls, or cladding, says
that with few exceptions there are two sorts of companies in the
business of building those walls: those that have gone broke and those
that will.
“Every cladding company is sort of in the process of finding
the job it can’t handle,” Tawresey says.
Cladding is a complicated, time-intensive business. Virtually
every cladding system is custom-designed and, as in Gateway’s case,
frequently surpasses the steel as the most expensive element on a
On Gateway, there are 3,390 different sizes of stone and 36,352
separate granite slabs. If the estimate for applying each piece is off
by just 10 minutes, the contractor would have underestimated the labor
cost of applying the granite by $100,000.
The problem was further complicated on Gateway by the fact that
every element of the exterior – the granite, the windows, the
upper-floor skylight – was designed separately, as was the
window-washing equipment, which has to interact with the peculiarities
of all those other separately designed systems in order to do what it
is supposed to do.
Gateway’s owners employed what is known as a design-build
process for many of the major subsystems on the building. Rather than
have the project architects specify every aspect of the building, this
process pushes design responsibility for particular systems down to the
people who make the systems.
The architect establishes how a thing ought to look and sets
standards for how it ought to work, but the specific design of the
system is left to its manufacturer. All of the major elements of the
cladding were design-build systems.
This saves some money in design fees, but it has one tremendous
disadvantage: It presents “an enormous coordination problem,” Battle
says. “Blending all that stuff is a nightmare. It really skews
This was not a part of the building where anyone welcomed more
Progress at Gateway was unaffected by the difficulty of
ordering stone from two countries on the other side of an ocean,
shipping it to a third country several thousand miles away, milling it,
shipping it to New Jersey, then sending it by train to an assembly yard
in Lakewood in rural Pierce County.
After being bolted to a frame, the stone was trucked to
Seattle, lifted onto each floor of the building, and finally welded to
a steel superstructure, some of which was made on the other side of a
different ocean and shipped to Seattle precisely in advance of the
granite’s arrival from Lakewood.
Although at one point the State Department threatened to slap a
tariff on the granite and unrest in Southeast Asia threatened shipment
of the steel from ports in Thailand, this global dance proceeded apace.
The biggest hitch in the whole plan occurred four blocks west of the
building site, in John Skilling’s office.
One of the greatest difficulties in building a skyscraper is
determining how much and when the structure will shrink under the
burden of its own weight, which they all invariably do.
No one knows precisely where the disappearing length goes – if
the steel compresses or bows – or when. Skilling predicted only that at
some point 5 inches of Gateway’s 720 feet would disappear.
This shrinkage, called elastic shortening, occurs differently
in buildings of different design. The steel-and-concrete columns that
hold up most of Gateway’s weight have been used in only a handful of
buildings, and only on Gateway ar e they on the exterior.
The question was further complicated because weight was not
evenly distributed throughout the building, and the heaviest portions
were expected to shorten even more.
“No one’s ever built a building like this before. It’s all
theory,” Hagwood says.
The greatest difficulty was trying to figure out when the
settling would occur. The timing was important because the cladding,
particularly the windows, could not be put on the building until the
shortening occurred. If the cladding went on too soon, it could pop off
when the building settled. Battle was frustrated in his attempts to pin
Skilling down. The shortening will be complete, Skilling said, when the
last weight was loaded onto the building. In other words, when the last
tenant is moved in.
Obviously, Battle had to give the go-ahead to his cladding
subcontractors before tenants moved in; otherwise, there wouldn’t be
space to move into, unless the tenants wanted permanently open walls
and windows.
From the time the steel erection began, Rod McKenzie, a
surveyor, had been looking for the shortening. Every weekend he was at
the site with his instruments, measuring movement. “I was married to
this building,” he says.
McKenzie had worked on other Skilling designs and, in fact, had
got caught in the middle of a lawsuit between Skilling and developer
Martin Selig over the settling of Columbia Center. The engineers blamed
part of the problem on faulty surveying. McKenzie, a man possessing
what Battle terms “explosive pride,” was incensed by the allegation.
His supervisor asked him why.
“ `Why?’ I said. `This is what I do. You’re saying I don’t
know how to do it.’ ”
Building surveyors are the same people you see on road crews,
peering through transits, plotting the course of highways. The
principles of surveying roads are the same as those of surveying
buildings. In practice, however, the two can be quite different.
“In a highway, if you’re within half an inch, who cares? It’s
close enough. In buildings . . . you just can’t live with close
enough,” McKenzie says.
For what seemed like an extraordinary amount of time,
McKenzie’s attentiveness to Gateway went unrewarded. He found virtually
no settling for almost six months.
While McKenzie looked, Battle waited, watching his schedule
deteriorate. The cladding was supposed to be following the steel up the
building. Once the cladding was on, interior work could begin. The
sooner interiors were done, the sooner tenants could come in.
But the cladding wasn’t on and everybody knew it. Cladding
problems almost always indicate structural problems, and the
real-estate rumor-mongers were at work. One competing developer
circulated a cartoon showing Gateway leaning like the Tower of Pisa.
Battle’s critical path began taking on the qualities of a
critical mass. Every month of construction was costing the owners
roughly $3 million, and every day Battle was falling further behind
schedule. He had to do something. He eventually decided to load all the
cladding materials inside the building on the floors where they would
be installed. Besides getting the material closer to its ultimate
destination, he hoped the addition of the weight – more than 3 million
pounds – would help induce the settlement.
Finally, between the construction of the 38th and 40th floors,
the building shrank an inch and a quarter, then continued shrinking
almost weekly.
“When the big drop occurred, I couldn’t believe it. We redid
the measurements two, three times,” McKenzie said. “I called the
company we bought the equipment from and had them bring some more stuff
out. For two or three nights, I couldn’t sleep. Finally, I called
Skilling. They said, `Yeah, OK, that’s what we expected.’ ”
By this time, Battle would have fallen two months behind
schedule if he hadn’t been stacking the granite on the building. Once
again he was able to catch up. “This isn’t a passing attack,” Battle
says. “It’s a ground game. You grind it out.”


In several areas in the garage, the concrete finish is ragged. It
rained while the concrete was being poured and water drained down
through the building, dripping onto wet floors. In some places this
created a slurry, a water-heavy mixture atop the concrete that, if
allowed to dry in place, creates an uneven finish.
To prevent this, Scott Lee, the KG engineer in charge of the
concrete work, ordered the slurry pushed off the floor, over the side
of the building, a common practice on a low-rise site.
On the constricted Gateway site, where there was always a
danger of spraying a passing car or dropping the slurry on workers
below, this was not an appealing option, but it was one of the few Lee
had and he decided to try it. The first load of slurry was shoved over
the side from the eighth floor. It stayed within the bounds of the site
and hit no cars.
Unfortunately, as it fell, Hagwood walked out of the building
and the slurry landed on his head. He was uninjured, but unamused.
No more slurry would be shoved over the side. The result, while
it kept Hagwood dry, left Lee with no place to put the slop. It simply
sat on the floors and hardened, creating an uneven finish.
KG is now grinding and patching these areas to sell them to the
“Selling” is a term of the trade meaning getting the
architect, acting on behalf of the owner, to accept work. It is not
completed until the architect approves it, until in effect the owner
buys it from the general contractor.
The patchwork represents money out of KG’s pocket.
“Rain wasn’t in my estimate,” Battle says.
The architect, however, is not concerned with the cost but with
the finish, which is primarily an aesthetic question for which he is
The problem with the concrete is emblematic of the tension
between perfection on paper and imperfection in fact, positions Battle
had characterized as heaven and hell.
Gateway Tower, like almost every other construction project in
history, has ended up somewhere in between. The selling of some piece
of the building occurs weekly now as the contractor and architect work
through a punchlist of imperfections. Some pipes have been found in odd
positions, and there is a variety of nicks and scratches, but no major
flaws have surfaced. The builder is selling and it looks like the owner
will be buying.
Then what will he do with it?
By the time Gateway is completed this spring at a construction
cost of about $84 million, leases will have been signed for about 40
percent of its 990,000 square feet. The rest is empty.
Sarkowsky, who has been working on this high-rise for more than
a decade now, a sixth of his life, says he always figured the toughest
part was getting the building built.
“I never really worried about filling it up,” he says.
Maybe, one competitor says, it’s time he started.




Dirt: 80,000 cubic yards of mostly clay excavated from the site,
enough to fill 10 stories of the building.

Concrete: 864,000 pounds per foot. 79 million pounds total, enough
to lay a sidewalk to Portland.

Steel: 21 million pounds cut into 10,500 pieces weighing an average
of 1 ton apiece. The heaviest piece – a girder in the low-rise portion
of the tower – weights 18,500 pounds.

Some of the steel was rolled in Japan out of Australian ore, then
fabricated in Thailand and shipped to Seattle, where it was put
together with 75,000 specially designed bolts from Michigan.

Stone: 36,352 separate pieces of granite, most of it from Finland,
some from Sweden, all of it shipped to Italy for fabrication, then to
New Jersey, then to Lakewood, Pierce County, where it was bolted to
metal frames, trucked to Gateway and bolted and welded onto the

In all, 3 million pounds of granite in 3,390 different sizes cover
217,509 square feet on the exterior. Additional marble for interior
details was quarried in Italy, Pakistan, Central America and Finland
and milled in Italy.

Glass: 7,000 windows from Oregon. In the skylight alone, 30,300
square feet of glass, enough to cover 11 tennis courts.

Wire: 25,000 miles of electric wire, enough to wrap around the
Earth at the equator.

Elevators: 32 Otis Whisper Ride cabs operating in two miles of
shafts; interiors decorated with five different kinds of wood: walnut,
cherry and oak from the United States, padauk from Burma and ebony from
east Africa.

Toilets: 373.




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