MG2 Says Coming to Seattle Was a Good Move

May 25, 2016

CEO Mitch Smith discusses with Seattle DJC the highlights of the last year since relocating the firm's HQ to Seattle

Mitch Smith, the CEO and chairman of MG2, said his architecture firm is reaping unexpected benefits after moving its headquarters from Bellevue to Seattle a year ago.

It also is expanding its leadership team, with nine new shareholders: Celeste Lenon, COO, and principals Brian Bonar, David Russell, Doug Brookbank, Matthew Goelzer, MJ Munsell, Mostafa Ahanchi, Ron Mitchell and Stan Laegreid.

Smith said some of the new owners recently joined MG2 with impressive resumes and successes; the others have contributed a high level of expertise over time.

“It’s a great team,” he said. “We’re all on the same page about what we want to accomplish with the firm.”

In the last couple of years some MG2 shareholders have retired. The new owners join five shareholders who Smith said plan to stay around for a long time. Besides Smith, they are Russ Hazzard, president, and principals Ted Caloger, Justin Hill and Jonathan Chang.

MG2 was founded in Seattle in 1971. In 1982, it moved to Bellevue, where it stayed until last May.

The firm has about 300 people on staff designing stores, shopping centers, corporate offices and interiors, and mixed-use projects. It also has offices in Irvine, Calif.; Washington, D.C.; and Shanghai. Clients include Costco, Tommy Bahama, Alibaba Group and Amma Development.

Revenues for 2015 were $50 million and should be about the same for 2016.

Smith said that stepping into a first-tier city such as Seattle has given MG2 access to new clients. “We’re just more top of mind since being in this community,” he said.

It’s also easier to work on projects that are located here such as Altitude Hotel & Residences, a 50-story hotel and residential tower being designed by MG2 and developed by Stanford Hotels for Fifth Avenue and Stewart Street; and Tower 12, which is under construction at Second Avenue and Virginia Street. Continental Properties is developing that 34-story, 314-unit apartment project. Weber Thompson is the design architect, and MG2 is the architect of record.

Having a Seattle office also helps MG2 learn about projects here and foster relationships in the design community that could lead to jobs, Smith said. “It’s kind of like talking to people in your neighborhood,” he said. “We’re in your neighborhood.”

Smith lives on the Eastside and is on the board of Bellevue Arts Museum. He said MG2 still has a lot of great relationships on the Eastside and continues to seek work there.

The firm closed its Portland office in 2014. The CEO said it’s been good to consolidate its Northwest focus in Seattle.

It’s also easier to hire people in Seattle, he said.

In a recent survey, 70 percent of MG2’s newly hired staff said they wouldn’t have accepted the position if the firm were not in Seattle.

“Our practice is designing and affecting the built environment,” Smith said, “so they tend to want to be where the most compelling built environment is, and that’s Seattle.”

The staff is more engaged, he said. They are joining Downtown Seattle Association committees and Seattle Chamber of Commerce boards. And the firm’s new collaborative space in the 1101 Second Avenue building lets it host events for organizations such as Urban Land Institute.

Before the move, the MG2 survey showed, over 80 percent of the staff drove to work alone. Now, 33 percent do. Over 70 percent take the bus — an increase from 16 percent, the firm reported.

Smith said there is still lots of opportunity in Seattle and Bellevue, but the office sector has slowed and not a lot of new retail is being built. Now the focus is on repositioning properties to be more competitive, he said, and “we excel at that.” Interest in hospitality is a “little tempered,” he said, because so many projects are in the works.

Seattle’s residential development remains strong, he said, but is moving toward affordable units and away from the high-end.

He said MG2 is working with Ashkenazy Acquisition Corp., which owns the retail at The Bravern in Bellevue, to keep that “amazing development” high performing and elevate the customer experience.

It also is working with General Growth Properties on Westlake Center in Seattle. Smith said the center is in a great location but the space is under-used. It needs to be refreshed and repositioned, with a more diverse tenant mix, he said.

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