Amazon, awaiting new Seattle tax vote, puts brakes on expansion

Projects were expected to bring 7,000 jobs to the downtown area

A big expansion by Amazon in its hometown of Seattle is on hold as the company awaits a city council vote that could levy millions of dollars a year in new taxes on the e-commerce giant.

Amazon has put the brakes on what is called its Block 18 project, which along with another Amazon office project would bring about 7,000 new Amazon jobs to downtown Seattle. The city council is scheduled to vote May 14 on taxing Amazon and other businesses to pay for more affordable housing and homeless services in the city. The “head tax” would be assessed on companies with $20 million or more in annual revenue at a rate of 26 cents per employee for each hour worked.

For Amazon, and its nearly $178 billion in revenue, that could amount to $20 million in taxes a year.

“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,” said Amazon Vice President Drew Herdener, in a statement given to this news organization. “And (Amazon) is evaluating options to sub-lease all space in our recently leased Rainier Square building.”

The pause on its Block 18 project is seen as an example of rising tensions between Amazon and the city of Seattle. The city has seen real-estate prices skyrocket as its demographics have changed along with the growth of companies such as Amazon, Starbucks and Microsoft, which is headquartered in nearby Redmond, but has a large corporate presence in Seattle.

Amazon is also in the process of picking a location for a second corporate headquarters, called HQ2, and earlier this year narrowed its list of possible locations to 20 finalists in North America. Seattle is not among the finalists.