The Seattle City Council is considering a new employee head tax on large employers to raise money to address the city’s homelessness and lack of affordable housing. The legislation would create a tax of 26 cents per hour for each Seattle employee, but only applies to companies with over $20 million in gross revenue (about 3 percent of Seattle businesses). It would start in 2019, then would be eliminated in 2021 and replaced with a 0.7 percent payroll tax.
The hour and payroll tax are estimated to raise $75 million per year. Of that $75 million, 75 percent would be used to create 1,780 affordable housing units over the next five years; 20 percent designated to the city’s Housing and Human Services department, which supports programs for tiny houses, emergency shelters, and public health services; and the remaining 5 percent on administrative costs.
As a result of the proposed employee head tax, Amazon Vice President Drew Herdener shared that the company is halting plans for two of their upcoming downtown Seattle offices.
“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.”
Block 18 (Graphite Design Group)
Block 18, located at 7th and Blanchard, is a 17-story tower with 405,000 square feet of office space. It was announced last October that Amazon agreed to lease all 722,000 square feet of office space in the new Rainier Square Tower, which is currently under construction.
Rainier Square Tower (Wright Runstad & Co.)
A number of new developments over the past few years in Seattle and the surrounding area have been largely predicated on Amazon’s growth. Should the it be approved, there could be upwards of 8,000 fewer Amazon jobs created in Seattle, and a number of developments in danger of being scrapped.
Upcoming Amazon-related projects include: 300 Pine, Amazon has leased the top six floors of the downtown Macy’s building and the office space is currently under renovation; and Block 21 in the Denny Triangle, a 900,000 square foot, two tower project. Amazon is also reconsidering possible leases around the city.
The Downtown Seattle Association, Greater Seattle Business Association, and the Seattle Chamber of Commerce have stated that they oppose the tax. The City Council is scheduled to vote on the legislation May 14.