Boeing’s cost cutting is slashing perks for local workers, as well as jobs. The latest blow to Seattle employees came Friday, when it closed a massive and beloved gym that once was even a haunt of Dennis Muilenburg, now the company’s Chicago-based CEO.
The gym, on the bank of the Duwamish River near Boeing Field, was heavily used by current and former employees.
“I played basketball with Muilenburg there in the late ’80s, early ’90s,” said Boeing retiree Joe Slepski, a former manager on the defense side of the company, after playing a lunchtime game at the facility Tuesday. “One year, we even won a championship.”
That was when Muilenburg was an up-and-coming engineering manager on Boeing defense programs here and played in one of the all-Boeing recreational leagues.
“There was a mix of employees: managers, engineers, line workers, union people, people from commercial or defense and space,” said Slepski. “Different people from all over the company played basketball and got to know one another. There was great camaraderie across Boeing.”
About 2,200 employees were paid-up members at the Oxbow Activity Center, 66,000 square feet of space built in 1987 on a bend in the Duwamish.
Boeing leases the land from the Desimone Trust, which represents the heirs of Joe Desimone, the original Italian-born owner of Pike Place Market. Desimone bought and drained swamplands along the Duwamish to create fertile farmland that in time gave way to Boeing’s industrial needs.
The Oxbow facility, accessible only to Boeing employees and retirees, boasts two full-size basketball courts, a running track, a big aerobics room, a weight room and locker rooms with about two dozen showers.
Joe Ellsworth, a Boeing patent attorney who has used the facility for 16 years, said the closure has left the regulars disconsolate.
“It’s one of the best gyms in Seattle,” he said Tuesday. “It’s like a funeral over there.”
He plays basketball or pickleball on weekday lunchtimes and plays in a Boeing volleyball league in the evening.
“On the surface, Boeing is big into health and fitness,” said Ellsworth. “In practice, it seems it costs too much.”
A statement posted in February on a website for retired members of Boeing’s engineering union — the Society of Professional Engineering Employees in Aerospace (SPEEA) — gives the company’s rationale for closing the gym:
“Boeing is making strategic decisions to vacate leased property,” the document states. “Boeing looked at creating a smaller fitness facility on company property. However, the cost of building a new center or retrofitting an existing space was too costly for the current economic environment.”
Boeing suggests that the various recreational sports clubs that use the activity center for games or meetings should shift to external locations “such as member-owned space, community centers, libraries, school gymnasiums, local schools.”
Spokesman Doug Alder said the company offers discounts to employees who enroll in fitness centers, and “there are several fitness facilities within two miles of the Oxbow Activity Center.”
Slepski said he emailed his old basketball teammate to ask him if there was anything he could do. Muilenburg wrote back to say he’d look into it.
Nevertheless, the gym closed for good on Friday.
“It’s an economic decision. If Muilenburg had the opportunity to keep the place open, he would have, I’m sure,” said Slepski. “But business is business.”
“I don’t know how you trade dozens of guys playing basketball against millions of dollars,” he added.
Calling it “the end of an era,” Slepski said he doesn’t know where he’ll go to play ball after Friday.
“Boeing has a lot of exercise facilities,” he said. “But I don’t know of any basketball opportunities. A lot of guys are looking for someplace to play.”
Nice perk for Zillow’s flying CEO
When Zillow CEO Spencer Rascoff told employees a year ago that he’d purchased a Los Angeles mansion and was moving his family there from Seattle, he assured them that “nothing is changing about my role at Zillow Group.”
One thing did change, however: According to the proxy filed Wednesday by Zillow, the company paid nearly a quarter-million dollars in 2016 for Rascoff to fly back and forth from his new home to Zillow headquarters in Seattle on a business jet.
Zillow spent $165,086 for “air travel by Mr. Rascoff from his residence in California to and from the Company’s corporate headquarters in Seattle, Washington.” In addition to paying for these “Commuting Flights,” it provided “a one-time cash bonus of $60,000 to offset taxes” he owed for the commuting subsidy.
Rascoff paid nearly $20 million for a six-bedroom, nine-bathroom estate in L.A.’s tony Brentwood neighborhood, according to media reports last summer. Some Zillow critics used the occasion to point out that its Zestimates were considerably off on both that transaction and his $1 million sale of his Seattle home in Madison Park.
The 12,000-square-foot home was purchased late in April 2016. Geekwire reported that the following month Rascoff explained to employees that both he and his wife grew up in L.A., and had parents in the area.
“It is not uncommon for executives at large companies to do this because (like me) they already spend a lot of time traveling each week,” Rascoff wrote. “Where they lay their head on the weekend is really just dependent on what is best for their family.”
By that rationale, it’s not clear why Zillow should pay for the airplane commute from L.A. to Seattle.
The company’s board of directors would have to approve such a plan; presumably the 41-year-old Rascoff, Zillow CEO since 2010, persuaded them it was a good use of shareholder money.
If flight costs of $165,086 covered the eight months since his home purchase, that’s an annual rate of roughly $250,000 a year even if the company doesn’t renew 2016’s $60,000 gross up to cover taxes.
According to the proxy filing, Rascoff’s total compensation for 2016 was $3.5 million. That was down sharply from 2015, when he received stock options valued at $16.2 million and ranked fifth in total compensation among 109 Pacific Northwest CEOs.
Zillow last year logged its largest loss ever — $220 million — even as revenue grew a robust 31 percent to $847 million, according to the S&P Capital IQ database.
Asked about the payments, a Zillow spokeswoman provided a statement that did not directly address why it pays for him to travel from L.A. to the Seattle headquarters: “Our CEO’s schedule is incredibly demanding and involves weekly travel to our various offices. For him to work most efficiently, we believe the expense to use private aircraft is reasonable.”
Rascoff’s May memo to employees noted that “I have done this before — for 2 years I lived in SF and worked in Seattle, and for 1 year I lived in L.A. and worked in Seattle.”
He did not say who paid for his commutes then.
Honored design won’t be built
For anyone hoping to see some more memorable architecture in the phalanx of residential and office high-rises marching across South Lake Union, there’s good news and bad news.
The good news is that a two-tower design for a Seattle site at Minor and Stewart streets has received a 2017 American Architecture Award as one of 79 notable new projects by U.S. firms.
The bad news is that it’s just a design, not something that will actually be built.
The award went last month to WATG Urban, where Dennis Rehill is vice president and design director. He worked on the design several years ago while at the Gensler architecture firm; when he started a local office for California-based WATG, “we continued to explore this idea,” Rehill says.
The winning design for the 440-foot towers shows a series of shiny, cantilevered boxes, broken up by greenery on large, high-up patios created where the boxes are shifted. It’s not the most radical design concept, but would be a welcome contrast to the unbroken glass facades that mark most recent high-rises here.
But that apparently isn’t in the cards for the site at 1901 Minor Ave. Crescent Heights, the big national developer that owns the property, is still working on a master-use permit for the site, says Case Creal, project manager at Gensler, the architect of record. The latest design- review documents for the site, dated last August, show a simpler design with one inset “notch” to provide some open-air “amenity space” partway up each tower.
WATG also was honored for a bridge in Hanoi. “It’s a very hard award to get, so we were very excited to get two this year,” says Rehill, whose current work includes projects in China, Vietnam and Hawaii.
With that international perspective, he judges that when it comes to Seattle’s residential high-rises, “there’s nothing here that’s really pushing the boundaries — it’s a little on the mundane side.”
Rehill says that contrasts with developing urban centers in such places as China, Saudi Arabia and Dubai, where development is fueled by “tons of money washing around” and “a desire to leapfrog from where they were 30 years ago.”
One benefit of the overseas investment dollars pouring into Seattle commercial development is that it “will eventually raise the bar” for architecture in big residential projects, he predicts.
High-rises aside, this region does have some other noteworthy new work, judging by the American Architecture Awards list:
LMN Architects’ light-rail station at Husky Stadium was honored in the airports and transportation centers category.
Other award winners were a residence in Seabeck, Kitsap County, designed by mworks; Olson Kundig’s repurposing of a onetime Dr Pepper bottling plant in Georgetown for the Charles Smith winery; and Graham Baba Architects’ headquarters for the Washington Fruit & Produce Co. in Yakima.
Unlike the Minor and Stewart project, those have all been built.