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Amazon Pulls Out Of Massive Office Project In Seattle

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Amazon Pulls Out Of Massive Office Project In Seattle

Two incidents don't qualify as a trend. But for the second time in several weeks, Amazon.com, Inc. (NASDAQ: AMZN) has pulled out of a huge real estate deal many thought was a sure thing.

The e-commerce giant announced that it was abandoning a prominent downtown Seattle office lease that would have provided room for at least 3,500 employees and possibly as many as 5,000.

The 722,000-square feet of space was located in the Rainier Square tower, a massive project that is under construction at Fifth Avenue and Union Street, about 8 blocks from the geodesic domes that comprise part of Amazon's headquarters' campus.

"We are always evaluating our space requirements and intend to sublease Rainier Square based on current plans," Amazon said in a statement, adding that the company has more than 9,000 open jobs and 2 million square feet of new space under construction in Seattle, and that "it will continue to evaluate future growth."

The $570 million, 58-story project will be the second tallest building in the Pacific Northwest.

According to the Seattle Times, only a few companies – Starbucks Corporation (NASDAQ: SBUX), Google Inc (NASDAQ: GOOG) and Facebook Inc (NASDAQ: FB)– have more office space in Seattle than Amazon was planning to occupy in Rainier Square.

The story of Amazon abandoning the Rainier Tower lease contains plot elements that aren't so different from the story about Amazon abandoning the Long Island City campus in New York in mid-February. Both reflect a growing divide between business interests, elected officials and community groups over the impacts of tech companies on livability.  

In June 2018 the Seattle City Council unanimously passed a "head tax" that would have levied a $275 per employee fee on Seattle businesses making more than $20 million a year. The money would have been directed to an affordable housing fund.

After Amazon threatened to halt construction on the Rainier Tower, the council reversed course and repealed the head tax.

Ten months later, Amazon pulled out anyway. The company employs about 40,000 and occupies 12 million square feet of office space in Seattle.

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