Long Island City isn’t the only place that Amazon is pulling out of. The tech giant made waves when it threatened to withdraw from its 722,000-square-foot lease in Seattle’s under-construction Rainier Square Tower over a possible $500-per-employee “head tax” last May that applies only to massive businesses like Amazon. The Seattle City Council ultimately passed a scaled-down version of the measure at $275-per-employee—with the proceeds destined for the construction of affordable housing—but even that measure was ultimately rolled back due in part to pressure from the business community. Now, even with its conditions met, Amazon has announced that it would be subleasing its space in Rainier square and looking elsewhere to meet its needs. The lease was enormous by Seattle’s standards and would have provided space for 3,500 to 5,000 Amazon employees and would have cemented the tech company as the tower’s anchor tenant. “We are currently building two million square feet of office space in our South Lake Union campus in Seattle,” said Amazon in a statement released to Geekwire. “We are always evaluating our space requirements and intend to sublease Rainer Square based on current plans. We have more than 9,000 open roles in Seattle and will continue to evaluate future growth.” The NBBJ-designed tower is notable both for its size and novel construction methodology. The 850-foot-tall, 58-story office building will be the second tallest in the Pacific Northwest once complete next year, and will use a core of modular steel plates and concrete “sandwiches” instead of the traditional rebar. A distinctive high-heeled-boot shape massing was used to preserve views of the adjacent Minoru Yamasaki–designed Rainier Tower (affectionately nicknamed “The Beaver” for its gnawed log-like appearance). A shorter glass-clad hotel will also be wedged between the two buildings as part of the Rainier Square Tower project. Despite the setback, Amazon is still on track to grow to 50,000 total employees in Seattle, and construction on the Graphite Design Group–designed Block 18, a 17-story, 388,000-square-foot office building solely for Amazon, is still on track.
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The Seattle City Council has unanimously passed a scaled-down version of the tax on mega-companies that caused Amazon to suspend its construction in the city earlier this month. It now seems like Amazon was bluffing when it threatened to pull out if the measure went through, as pre-construction work on the 17-story Block 18 tower is reportedly back on. Seattle is weathering an affordability crisis as rents and homelessness rates continue to rise, and a tax on companies grossing $20 million a year or more was proposed as a way of funding new affordable housing. The proposed tax would have originally hit those larger companies (about three percent of businesses in Seattle) with an annual, $500-a-head charge. After deliberations between the Council, Mayor’s office, and the business community, a leaner, $275-per-employee bill that sunsets in five years was eventually passed. The original measure was expected to bring in around $75 to $86 million a year for the city, which would have built approximately 1,700 affordable units over the next five years; as passed, Seattle will reap $45 to $49 million a year, and only build out 591 units over that same period. Still, even these changes haven’t appeared to sit well with Amazon. Although construction will move forward on Block 18, an office tower in downtown Seattle that could hold 7,000 Amazon employees, Amazon issued a sternly-worded statement after the vote threatening to reduce its footprint in the city. With 45,000 employees currently in Seattle, the tech giant would have ended up paying around $12 million a year. “We are disappointed by today’s City Council decision to introduce a tax on jobs,” Drew Herdener, an Amazon vice-president, told The Guardian. “We remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.” Amazon’s statement isn’t just bluster. While the Graphite Design Group–designed Block 18 will rise after all, the company is still debating about whether it will take the 722,000-square-feet of office space it was going to lease in the forthcoming Rainer Square building. As the HQ2 search continues, it remains to be seen whether Seattle’s pushback against Amazon will have an effect on what prospective cities are willing to concede; 40 officials from cities all over the country, including some of those still in the HQ2 running, have signed an open letter throwing their weight behind Seattle in this tax fight.
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.
Huge news (say that in your best Bernie Sanders voice) in Seattle. Google has plans to move its Fremont, California, office into a mixed-use four building campus in South Lake Union (SLU). The project was designed by Graphite Design Group with Runberg Architecture Group working as consultants on the residential portion. The property is on Mercer Street bounded by Fairview and Terry Avenues, south of the Museum of History and Industry, and east of the newly opened Allen Institute. The site, currently a surface parking lot, will eventually host four six-story buildings and two additional residential towers (each up to 9 stories tall). Google will move into all of the 607,000 square feet of office space for lease periods lasting 14 to 16 years. Also planned are 151 apartments, close to 14,000 square feet of retail space, and 780 parking spots. The design features large setbacks and is part of a $2.1 million woonerf (Dutch for a green street that prioritizes bicycle and foot traffic). Developer Vulcan Inc. (owned by Paul Allen) is working with Google on the project. It's an unusual move, as Vulcan tends to work with Amazon. Currently, there are about 900 Google employees in Seattle. The new office could hold up to 4,000 employees. Google also has an office in Kirkland with close to 1,000 employees working. “Vulcan will also contribute approximately $4.3 million in incentive zoning fees for affordable housing and daycare,” reported GeekWire. No word yet on the total cost of the project. Construction is planned in phases, with breaking ground slated for 2017, and an opening by 2019. There has been a flurry of tech development in South Lake Union over the past several years that some fear is homogenizing the neighborhood. Amazon is nearby and in Denny Triangle, Gehry is designing for Facebook, and now there'll be Google as well.