Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

Amazon Pauses Development In Downtown Seattle As Council Considers 'Head Tax'

Amazon spheres
Elaine Thompson
The Associated Press

Amazon is pausing development on two buildings in downtown Seattle as the City Council considers a "head tax" on large businesses.

First reported by a Seattle Times Opinion columnist, Amazon Vice President Drew Herdener said in a statement the company has halted construction on a building at Seventh Avenue and Blanchard Street and is evaluating options to sub-lease space in the Rainier Square building. The decision is directly tied to the head tax vote.

It's estimated the two buildings would house several thousand jobs.

The move comes after recent announcements that Amazon is expanding in Boston and Vancouver, British Columbia. It also comes during the company's widely publicizedsearch for a second headquarters.

The tax under consideration would be paid by businesses with more than $20 million per year in gross revenues. It's calculated based on how many employees a company has.

The tax would cost Amazon some $20 million or more per year. That money would go toward the city's efforts to combat homelessness and to help build more affordable housing.

The move seems to illustrate mounting tensions between city leaders trying to tackle the side effects of growth and Seattle's largest private employer.

"This tax in and of itself should not affect whether Amazon puts one more employee here versus one fewer," said Jeff Shulman, a marketing professor at the University of Washington Foster School of Business who also hosts the Seattle Growth Podcast.

Shulman said while $20 million is a lot of money, there's no reason to think Amazon couldn't afford it.

"The bigger issue is if they just pay this $20 million without making any sort of reaction, what's the next tax going to be and will they be included in that conversation or not," he said.

City Councilmember Teresa Mosqueda said the council intends on moving forward with their proposal. 

"I'm absolutely interested in having conversations with anyone who wants to come to the table, but frankly they didn't come to the table and they boycotted the process," Mosqueda said. "So we need to hear from everybody about how to make this workable now, but we have to get revenue inside because we have to get folks off the street."

In a joint statement, Mosqueda and the other three sponsors of the head tax legislation echoed that urgency, emphasized a "shared responsibility" around homeless issues, and said the tax wasn't about Amazon.

The four sponsors plus the support of Councilmember Kshama Sawant mean the tax has the majority it needs to pass. A vote is expected May 14.

Eyes are now turning to Seattle Mayor Jenny Durkan. In a statement responding to the latest news about Amazon, Durkan said she was "deeply concerned" with the potential impacts of the company's decision. 

But she did not indicate whether she might veto the legislation, going on to say she wanted to "forge common ground in dealing with our challenges while keeping jobs."

A Seattle native and former KNKX intern, Simone Alicea spent four years as a producer and reporter at KNKX. She earned her Bachelor's of Journalism from Northwestern University and covered breaking news for the Chicago Sun-Times. During her undergraduate career, she spent time in Cape Town, South Africa, covering metro news for the Cape Times.