Amazon has paused development of its 17-story building in Seattle amid a debate over a city tax hike that would cost the e-commerce giant an estimated $20 million annually.
“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 spokesman.
The “head tax” would charge 26 cents per employee per hour for Seattle-based companies with $20 million or more in annual sales, affecting 585 of Seattle’s largest businesses.
There are more than 45,000 Amazon employees in Seattle, and its expansion in the city would have created 7,000 jobs for the company.
The company recently announced it’s adding new jobs in Vancouver and Boston, as well as making the final decision over where its second headquarters will be located.
The head tax bill would help fund a program to address homelessness in the city and a project for 1,780 low-income apartments over five years.
Amazon, Seattle’s largest employer, would pay for more than a quarter of the projected $75 million funding in 2019.
Starting in 2021, the head tax would be replaced by a business payroll tax.
Councilman Mike O’Brien asked Amazon to “do their share” during a community meeting Wednesday.
“I need to raise more money for affordable housing, and I am not going to put it on the backs of the lowest-income people in our community,” he said.
Seattle Mayor Jenny Durkan has indicated support for the head tax, but told The Seattle Times she is “deeply concerned about the impact this decision will have on a large range of jobs.”
Republican state Sen. Mark Schoesler said the tax “would stifle economic growth not just in Seattle, but in King County and the entire state of Washington.”
Schoesler is also drafting a bill for the state’s 2019 legislative session that would make head taxes illegal in the state.
The City Council is expected to vote on the proposal in mid-May.
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