Amazon halts planning for Seattle office tower as city mulls new tax

Amazon has halted planning on a new 17-story office tower in downtown Seattle as the city council mulls the implementation of a new tax that would raise funds to address local homelessness, the company confirmed on Wednesday.

Backed by at least four members of the nine-member Seattle City Council, the proposed tax would charge 26 cents per employee hour for Seattle-based companies with $20 million or more in annual sales, the Seattle Times reported. Proponents say the “head tax” would raise $75 million in 2019 that would be used to build low-income housing and outreach efforts for the city’s homeless.

“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 sub-lease all space in our recently leased Rainer Square building,” said Drew Herdener, an Amazon vice president and spokesman.

For Amazon, which employs more than 40,000 workers in Seattle with plans for further expansion, the tax would cost more than $20 million annually. The e-commerce giant is Seattle’s largest employer.

While the “head tax” appears to have support on the council, the Seattle Metropolitan Chamber of Commerce and Downtown Seattle Association oppose the measure as a “tax on jobs,” the Seattle Times reported. A vote on the measure is expected later this month.

A Seattle Times analysis published in August 2017 found that Amazon had as much real estate as the city’s next 43 largest corporate inhabitants. If construction plans proceed, Amazon will have enough space for more than 55,000 employees by 2020.

Amazon shares are up more than 30% so far this year, and the company reported yet another strong quarter of earnings in late April. It is now the second-largest company in the U.S. by market capitalization, with a value of more than $760 billion.

The company announced earlier this week that it would add 3,000 new jobs in Vancouver and 2,000 new jobs in Boston. Amazon is also said to be in the final stages of choosing a location for its second headquarters.