Amazon Not-Prime

Amazon suspends construction in Seattle over possible tax increases

Development News Urbanism West
The one-million-square-foot Block 18 office tower. (Courtesy Graphite Design Group)
The one-million-square-foot Block 18 office tower. (Courtesy Graphite Design Group)

Amazon has put the kibosh on a one-million-square-foot expansion of its Seattle headquarters pending a City Hall vote to raise taxes on the company.  The proposal would tax companies with $20 million or more in annual gross revenue, to the tune of about $500 per employee, with the proceeds going towards affordable housing in the city.

Amazon was slated to begin construction on the 17-story Block 18 tower in downtown Seattle and occupy 722,000 square feet of office space it had leased at a 58-story Rainer Square building currently under construction. While the Graphite Design Group–designed Block 18 wasn’t slated to begin construction for another month, Amazon has put the project on hold indefinitely.

“Our firm was notified late in the day yesterday to pause the project pending the resolution of the head-tax issue that the City Council is currently deliberating,” Graphite Design Group’s Peter Krech told the Seattle Times, “so we are suspending our work immediately on the project based on that direction.”

Amazon has long driven growth in Seattle, but critics have charged that the tech giant’s employees have drastically reduced the amount of housing available in the city, driven up costs and increased income inequality. The proposed tax would bring in an estimated $75 million a year for the city, with Amazon paying $20 to $30 million. The funds would go towards building 1,800 affordable units a year. If Amazon is going to truly kill Block 18, Seattle would lose 7,000 to 8,000 potential jobs.

It seems that Amazon has soured on its home city, as the company recently announced that it would be adding 1,000 more jobs at its Boston office, 3,000 at its Vancouver, British Columbia, office, and 200 at its Minneapolis offshoot (not to mention the HQ2 search). The 4,500 employees that were previously going to move to the Rainer Square tower offices may also be relocated elsewhere.

Seattle’s City Council is set to vote on the measure on May 14. It remains to be seen if Amazon is bluffing or not, and as the Seattle Times noted, residential developers who were counting on an influx of new Amazon employees may have to scale back their ambitions as well.

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