Seattles Chamber: Charting a Course to Relevance

Shortly after the steamer Portland docked in Seattle in 1897 with a reported ton of gold from the Alaskan Klondike, the Seattle Chamber of Commerce hired Erastus Brainerd, an itinerant journalist, to establish Seattle as the best departure point for prospectors. Brainerd did such a good job of promoting Seattle, the Gateway City to Alaska, that thousands flocked to the city, winning Seattle merchants millions of dollars in business and earning Brainerd a job as chamber president.

The move was one among many instances bringing the Great Northern Railway to Seattle, promoting the Lake Washington Ship Canal, building Boeing Field and pushing for world-class facilities at Sea-Tac Airport in which the chamber, formed in 1882, has played a key role in Seattles rise as an international city.

But after 135 years of representing the citys business interests and surviving many of the regions booms and busts, the organization, now called the Seattle Metropolitan Chamber of Commerce, is being tested by a rapidly changing political and economic landscape. It is walking a tightrope between its traditional mission of representing business interests and a new broader mission of taking on costly, often intractable, social issues not always popular among its membership.

The chamber, for example, played a key role in negotiating the 2014 compromise that phased in a $15-an-hour minimum wage over seven years in the city of Seattle. And it has supported Mayor Ed Murrays many proposed levies for everything from early-childhood education and affordable housing to public transit and parks.

Managing this balancing act is chamber President and CEO Maud Daudon, who promotes what she calls a triple bottom line: advancing the economy for its members and community, stewarding the effort to improve the regions quality of life and trying to help the citys less privileged residents benefit from the citys newfound prosperity.

We stand for many of the things the community stands for, Daudon asserts.

And do the chambers members back its support of so many progressive causes?

Im still here, Daudon says.

But the chambers most important function, and perhaps Daudons biggest challenge, is maintaining its influence in a region whose interests are not only more diverse, but in which the leftward drift of the Seattle City Council one executive calls it a leap to the left has created a climate many business leaders say is hostile to business.

Small and midsize businesses, which make up the bulk of the chambers membership, have sometimes felt the chamber has not done enough to slow the wave of new regulations that have recently included sick leave requirements, paid family leave, punitive measures for late scheduling changes and a new law taking effect in July that requires landlords to rent their housing on a first-come, first-served basis.

The chamber is a weak sister and cooperates too much with city government and is not standing up for business, says Hugh Brannon, a landlord and small businessman.

Its hard for the chamber to maintain its influence [in the city] and still be vocal about the needs of business, adds Mike Dunn, president of Dunn Lumber. It used to be that businesses were considered a respected partner to the city. Now we are seen as greedy villains.

One problem, says Dunn, is that the large companies hold so much sway over the chamber. The bigger you are, the less effect these rules have on the bottom line because you have the staff to do it, he notes. So when the city passed a paid-time-off ordinance, while that had little impact on larger companies, Dunns lumber company had to spend $200,000 on a new system to make sure it was abiding by the new regulations.

Chamber officials argue that without its involvement, many of the regulations would have been far more harmful to business owners. The chambers work to reach a compromise to have the $15 minimum wage implemented over seven years, for example, may have averted passage of a more extreme initiative that called for the $15 minimum wage to be effective immediately.

Such controversy may be an unavoidable result of Daudons mission. When she was hired to head the chamber in 2012, she sought to change its strategic role from an institution that was resistant to new ideas and therefore often excluded from the key issues of the day to an organization that took on challenging issues and embraced problem solving.

By building alliances and guiding the chamber in a new direction, Daudon has helped to make it more relevant than it was five years ago, says Bob Donegan, the president of Ivars and chair of the chambers board from 2012-13. Her experience as CFO of the Port [of Seattle] and as [Seattles] deputy mayor gave her a window into political decision making how important it is to understand those on the other side of the table. Shes been good at building coalitions.

Now, says Donegan, Anytime the mayor, the county executive, the port commission has an initiative, one of the first places they go is the chamber. We see the drafts and outlines of new proposals.

Donegan says the chamber has also gotten increasingly positive ratings in polls as a source for reliable information.

The chamber is at the forefront of all of todays issues, says John Schoettler, Amazons VP for global real estate and facilities and the chambers board chair last year. He cites the chambers backing for public transit spending, addressing the gender pay gap and dealing with homelessness as examples. The chambers key strength, he explains, is its ability to coordinate various interests to come up with a consensus in support of a particular approach to an issue.

With the chamber, says Schoettler, were all in the same boat, rowing the same way.

Tackling congestion has been a key priority, whether its hammering out the details for a new international arrivals terminal at overcrowded Sea-Tac Airport or building support for the $12 billion state transportation bill. When Curtis King, a Republican state senator from Yakima who is chair of the Senate Transportation Committee, expressed skepticism regarding the need for more spending on Seattle roads, Donegan says, We invited him to visit, picked him up at the airport and took him on a tour of places like [Routes] 520 and 167. King ended up supporting the additional spending.

The chambers membership is broadly based, both in size and geography. About 40 percent of it is based outside the city. And while members include giant corporations like Boeing, Amazon, Alaska Air Group and Starbucks, they also include hundreds of far smaller companies. Eighty percent of its members have fewer than 100 employees and one third have fewer than 10.

In recent years, the chamber has made an effort to be more inclusive and to represent the concerns of small businesses. It added to its board small-business executives such as Taylor Hoang, an entrepreneur who is also executive director of the Ethnic Business Coalition, and Sara Nelson, owner of Fremont Brewing Company, and also welcomed more nonprofit organizations. The chamber is opposing the city’s proposed soda tax in large part because of the impact small retailers say it will have on their businesses.

Besides a sometimes-hostile city government, the chamber faces other challenges. If the chamber were a company, analysts might point to the stiff competition it faces as more suburban chambers and industry associations lure away members and sponsor their own events, both important sources of revenues for the Seattle chamber.

The Seattle chamber charges membership fees that start at about $500 a year for companies with 25 or fewer employees; fees rise based on how much a company or organization wants to engage with the chamber and its work. Chamber membership during the past few years has averaged between 2,200 and 2,300, down from about 2,500 members a decade ago.

The chamber says it has focused on adding larger members, which tend to stay on board longer, as well as on developing strong reciprocal partnerships with neighborhood and ethnic chambers (there are 30 in the region).

Weve diversified revenue by engaging our members in more targeted ways, says Daudon. These initiatives include 100% Talent, a joint endeavor on gender equity with the Womens Funding Alliance; the Seattle Region Partnership, focused on connecting local residents with good jobs; and the Civic Alliance for a Sound Economy (CASE), the chambers political arm. The chamber also boosts its revenue by applying for grants: It has raised revenue by $1 million since Daudon took over.

Nonetheless, some former members have dropped their chamber membership in favor of industry associations that more closely match their corporate interests. We just didnt see the value, says one executive who says his company dropped its chamber membership in favor of two or three industry-related associations.

The advocacy, networking and events, staples of what the chamber offers, are increasingly being offered by other associations that better target their members, such as the Washington Technology Industry Association (WTIA), representing the tech sector, and Washington Life Science Association, representing the biotech and medical instruments sectors. The WTIA alone has a $2.4 million budget that funds a variety of programs and services, including lobbyists in Olympia.

Robert Wallace, CEO of Wallace Properties, says the various industry associations have taken some of the steam away from the chamber. Many now offer events in areas like commercial real estate that are all stuff the chamber used to do, says Wallace, who has been board chair at various times of both the Seattle Metro Chamber and the Bellevue Chamber of Commerce. When it comes to networking, there is much more competition for dollars and focus than there was 30 years ago.

Other city chambers such as Bellevues have taken the more traditional chamber approach of focusing exclusively on business concerns such as growth, taxes and regulations. Belle-vue Chamber of Commerce CEO Betty Capestany says, While our missions are similar and we have many mutual members, we each deliver our own value proposition and approach that best represents our area.

Daudon says the region is a different place from what it was five years ago and that new approaches are needed to stay relevant. But she sees other chambers as partners in the new approach rather than competitors.

Seattle issues tend to become state issues, she says in answer to a question about why the chamber spends so much time and effort on its relations with the Seattle City Council.

The chamber has expanded its visibility, in part, by offering office space and operational support to other organizations with which it is aligned as well as programs that have directly grown out of the chamber.

The chambers annual budget of $5.6 million comes from membership fees, event revenue, grants and a building endowment established when it sold its building decades ago. The chamber also maintains a subsidiary that uses its memberships combined buying power to offer health care to small businesses at lower costs.

It really is like running a business, Daudon says. While the chambers various overseas trips are often advertised as information-gathering missions, Daudon has insisted that they also generate a profit for the chamber.

Former Seattle City Council member Jean Godden says that while the goals of the council and the chamber may not have meshed from time to time, the two groups have generally been mutually supportive. The council, for example, approved a budget in 2016 that included about $25,000 for the chambers gender pay initiative.

When the city adopted districts for council elections, the chamber started working with in-city chambers of commerce and neighborhood business associations to deepen its ties to the council by sponsoring roundtable discussions. The meetings, which now have covered all nine council members, have helped bridge the widening gap between business and the progressive council. In February, the chamber sponsored a roundtable with socialist council member Kshama Sawant. At the end of the meeting, Sawant acknowledged that though she may not always agree with the business community, there exist areas of common ground.

The chamber has benefited from a long history of often visionary leaders. George Duff, who was president for more than 25 years beginning in 1968, launched intercity and international study missions, which have helped position Seattle as a player in the global marketplace, and was a key force behind the construction of the Washington State Convention Center, which has been instrumental in bringing visitors to Seattle. Duff sold the chamber-owned building in the 1980s, creating an endowment to help cover rent for the organization. But many argue that those were simpler times when a relatively small number of city leaders could make a big difference. Seattle today, they say, is a much larger, more complex city with far more diverse interests.

So what lies ahead for the regions chamber? Transportation remains a focus, as does education. Joint work with the Brookings Institution suggest that the Greater Seattle area falls behind peer cities on important metrics. In particular, there is a yawning gap between the well-paid tech workers of the city and relatively low-paid service workers. The chamber hopes to narrow that gap by helping to train more workers to fill existing well-paid jobs in such areas as aerospace and maritime industries while creating more living-wage jobs by attracting foreign companies to establish operations here.

Bob Watt, Boeings head of corporate and community relations, says its vitally important for the chamber to remain an important voice for Seattle as companies in the region increasingly depend on the global market for their growth.

Watt poses this question: Where do you say you are from as you travel the world? His answer: Seattle. Watt continues: Where does Boeing build its planes? Seattle. He says thats what Boeing tells the world even though its factories are in Renton and Everett and North Carolina and elsewhere in the country and its corporate office is in Chicago.

The organization that made Seattle the departure point for gold prospectors and helped rebuild the city after the Great Fire may have trouble having its voice heard in an increasingly cacophonous public arena where politicians talk to voters who may not understand what it takes to keep an economy humming.

Prosperity is fleeting, says Daudon. Were in a boom now and its hard to realize that it isnt always going to be that way. She says organizations like the chamber, with its sense of the regions history, know how fragile growth can be and that drives efforts to benchmark competitiveness and focus on economic development.

The chamber and the community are mostly aligned with where we want to go, Daudon says. How is up for debate.

Maud Daudon was named president and CEO of the Seattle chamber in 2012
after holding top exec posts in the public and private sectors.

Multi-chambered
The Seattle Metropolitan Chamber of Commerce, based in the Rainier Tower downtown, houses 10 affiliated organizations, some of which are more independent than others:

The CleanTech Alliance

The Northwest Environment Business Council

The Economic Development Council of Seattle & King County

The Alliance for Education

The Civic Alliance for a Sound Economy

The Trade Development Alliance of Greater Seattle

The Washington Council on International Trade

The Washington State China Relations Council

Leadership Tomorrow

The Technology Alliance

Selling Seattle
Will consolidating trade organizations foster a stronger marketing approach?

In the mid-1990s, a group of Seattle officials returning from a trip to Asia found themselves at the airport in Guam talking about Seattles growing role in the global economy. That conversation led to the creation of the Trade Development Alliance of Greater Seattle (TDA).

For more than 20 years, the alliance has helped promote the region as a keystone in the global economy. It has led dozens of study missions to all parts of the world and hosted foreign delegations here. Its one of the few regional organizations that embraced King, Pierce and Snohomish counties, both the ports of Seattle and Tacoma, plus labor unions and businesses.

But other metropolitan regions have more robust trade and economic development operations, and so chamber members are looking to boost the way in which the Greater Seattle business community interacts with the world. That’s important because 40 percent of state jobs are tied to trade and commerce.

One idea is to combine the Washington Council on International Trade, the China Relations Council and the TDA into a single organization under the Economic Development Council (EDC) of Seattle and King County. All four, as affiliated organizations, already rent space and use the chambers administrative services. The plan has the support of many large companies, including Boeing.

The proposal has been floating around for some time one reason the TDA has been operating with a temporary director for nearly two years. Now getting into the act are the dynamic duo of Seattle Port Commissioner Stephanie Bowman and Tacoma Port Commissioner Clare Petrich, who were key to the creation of the Northwest Seaport Alliance. Bowman has recently joined the boards of the EDC and the TDA as a port representative. She is a critical voice since the ports are major funders of the organizations.

The problem to solve, says Bowman, is how to better market the Puget Sound area from a regional perspective. Bowman and Petrich are working to bring all the parties together to forge a new approach.

The chamber and its affiliates and partners are always thinking about how to make our regions economic development, including trade development, more impactful, says chamber spokesperson Alicia Teel.

One of the main concerns is how the EDC, which has traditionally focused on King County, would also represent Pierce and Snohomish counties. It adds some complications, says Tom Albro, a Port of Seattle commissioner. But he adds that its hard to argue its a bad idea for those who see Seattles approach to international trade as fragmented.