ANTHONY BOLANTE | PSBJ
Amazon halts tower construction, may sublease Rainier Square if Seattle passes head tax
For several weeks there have been rumors that Amazon.com Inc. is pulling back from developing and leasing office space in Seattle due to the city’s proposed head tax. Wednesday the company confirmed part of the story.
The Seattle Times reported that Amazon has told architects and developers that until the City Council decides the head tax issue it is pausing construction of its Block 18 project – a 17-story tower at 2205 Seventh Ave. – in the Denny Triangle and may try to sublease out space in the Rainier Square skyscraper in downtown Seattle where it just signed a lease.
Amazon.com Inc. officials have informed the developer of the Rainier Square skyscraper, that they may sublease out the future office space if the city
“I can confirm that pending the outcome of the head tax vote by City Council, Amazon has paused all construction planning on our Block 18 project in downtown Seattle and is evaluating options to sublease all space in our recently leased Rainier Square building,” Amazon Vice President Drew Herdener said in a statement issued to the Times.
The Business Journal has reached out to Amazon but has not yet heard back. Greg Johnson, president of Wright Runstad & Co., the Rainier Square
of Seattle moves forward with the proposed employee head tax. Greg Johnson, president of Wright Runstad, the developer of the Rainier Square project, shown here, said Wednesday that construction continues on the massive project.
Amazon reportedly has halted construction of a 17- story office tower in the Denny Triangle. The head tax is projected to raise $75 million a year for development of low-income housing, a third of which Amazon would pay.
developer, said Amazon has conveyed its decision to him. He said construction of the tower will continue, regardless.
The proposed tax would apply to businesses with at least $20 million in taxable gross receipts as measured under the city’s business and occupation tax. The city claims the tax would affect about 500 Seattle businesses, or less than 3 percent of Seattle business owners. The city expects to raise at least $75 million from the tax. Amazon, which has 45,000 Seattle-based employees, would account for about one-third of the revenue generated by the tax.
Councilmember Mike O’Brien, one of the sponsors of the proposal, in a recent interview said companies don’t choose Seattle because of a lack of taxes, they choose Seattle because talented employees want to live here.
Councilmember Kshama Sawant, who has targeted Amazon in her support for the bill, recently told the Business Journal there’s no evidence to support the argument companies will reduce jobs or salaries in the city because of taxes.
“When you accept the logic that making sure a small measure of the wealth is getting used for social good is somehow going to have an apocalyptic effect on the overall economy, that basically means conditions will get worse for us all,” she said.
The city would use the revenue from the tax to fund affordable housing and services for homeless people. The city says 75 percent of the revenue in the first five years would go toward affordable housing.
City Council spokeswoman Dana Robinson Slote said the council has not yet issued a statement on the news. If it does, this story will be updated.
Mayor Jenny Durkan’s office has yet to respond to a request for an interview.