Amazon Pauses Huge Development Plans in Seattle Over Tax Plan

Author: NICK WINGFIELD / Source: New York Times

Amazon’s glass spheres in Seattle are part of a wave of development in the city by the company. Amazon is the city’s largest employer with more than 45,000 local workers.

SEATTLE — Amazon abruptly escalated a fight with its hometown on Wednesday, halting major expansion plans in Seattle because of a tax being considered by the City Council.

The new tax would charge large employers in the city about $500 per employee, with the money going to help alleviate a housing crisis. The tax is squarely aimed at Amazon, which is Seattle’s largest employer and frequently blamed by many residents for the city’s soaring housing costs.

The company said it would halt construction of a new building it was planning to erect downtown and reconsider occupying another that is already under construction, putting 7,000 or more jobs in jeopardy.

Late Wednesday morning, Drew Herdener, an Amazon spokesman, said that “pending the outcome of the head tax vote by City Council, Amazon has paused all construction planning” on a large building in downtown Seattle that was scheduled to begin construction later this year. Mr. Herdener also said Amazon was “evaluating options” to lease out space it had planned to use in another building that is already going up elsewhere downtown.

The decision took city officials and developers by surprise. In a statement, Seattle’s mayor said she was alarmed by Amazon’s announcement and added that she planned to work with members of Seattle’s business, labor and community leaders in the coming days to find common ground.

The council is expected to vote on the tax proposal on May 14.

“I’m deeply concerned about the impact this decision will have on a large range of jobs — from our building trades, to restaurant workers, to nurses, manufacturing jobs and tech workers,” said Mayor Jenny Durkan. “At the same time, our city must urgently address our homelessness and affordability crisis and lift up those who have been left behind.”

Amazon’s decision comes as officials in other communities across the country are jockeying to bring Amazon’s business to town. The company is shopping for a second headquarters elsewhere in North America, saying it has outgrown Seattle. And just this week it announced plans to hire thousands more employees in Vancouver and Boston.