pauses office space investment in the wake of Seattle City Council’s tax plan

While the aim of the Seattle City Council’s tax plan is to generate revenues the bulk of which will be channeled for affordable, the plan’s efficacy is unclear. With Amazon putting its new office space in pause, more than 7,000 jobs are at risk. This does not include the $5 billion Amazon has planned to spend for its second headquarters.

Pending a a vote by Seatle’s city council on a proposed tax on top businesses, has has paused planning for a news office space and could instead sub-lease it.

The move places a question mark on more than 7,000 new jobs at those buildings that council members might be loathe to cost the city. Furthermore, construction works and other businesses that would have kicked in if Amazon were to move into its office tower, is also at risk.

“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, Amazon’s Vice President in a statement.

The council is scheduled to vote on the proposal on May 14.

“I’m deeply concerned about the impact this (Amazon’s)decision will have on a large range of jobs,” said Mayor Jenny Durkan to the Seattle Times on Wednesday.

Amazon’s growth has hugely benefited, if not transformed, Seattle’s South Lake Union district, which was earlier riddled with warehouses and parking lots; these have been replaced with expensive eateries, and office towers for a highly paid tech work force. In economic terms too, Amazon’s growth has contributed to America’s growth and a steady rise in rents.

Amazon has stated it will spend more than $5 billion to create 50,000 jobs in the city of its choosing for its second headquarters.

Communities across North America have been vying Amazon’s investment.

In April, Seattle City Council proposed a tax plan which will impact at least 500 of the city’s biggest businesses. The proposal of an employee hours tax will essentially transition to a payroll tax in 2021, and will generate $75 million per year for Seattle; the bulk of this collection would go towards building affordable housing.

The efficacy of the specific proposal is unclear.


Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Strategy

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