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Economist: Amazon expansion in Bellevue a ‘remarkable indictment’ of Seattle council

Sep 7, 2020, 10:54 AM | Updated: Sep 8, 2020, 11:03 am

Last week, Amazon announced that it would adding another 10,000 jobs to its Bellevue operations, committing a total of 25,000 workers to the Eastside in the next few years. In the wake of a recently passed big business tax in Seattle, Windermere Chief Economist Matthew Gardner sees the company’s expansion as a direct reaction to that legislation.

“I think this is a remarkable indictment of our local legislature,” Gardner told KIRO Radio’s Dave Ross.

Originally, Amazon had planned to add 15,000 jobs to the Eastside. But less than two months after Seattle city councilmembers voted to approve a landmark tax on corporations with payrolls over $7 million, the company expanded those plans significantly, including another 10,000 jobs and a $1 million grant to Bellevue’s Human Services Fund.

Gardner had predicted this might happen shortly after the tax was passed, saying in July that he had “no doubt we’re going to hear several announcements of some massive expansion by Amazon into Bellevue.”

How Bellevue wooed Amazon over to the Eastside

“Really, it’s going to become one of those bad-kept secrets,” he said at the time.

Amazon now either owns or leases 4.8 million square feet of office space in Bellevue, having recently added space at the 42-story 555 Tower and the three 16- to 17-story towers in the West Main block. Both new spaces are currently under construction.

In 2018, a previous head tax passed by city council was quickly followed by Amazon warning city leaders that an increased tax burden could motivate the company to begin moving its operations out of Seattle. The tax was repealed, but the sum total was what Gardner describes as a “shot across the bows of City Hall.”

Amazon expected to close on mega real estate deal in Bellevue

With the new tax passed by Seattle councilmembers, history appears to be repeating itself, albeit without the company directly citing the new business tax as the reason for its latest Bellevue expansion efforts.

The tax, dubbed “JumpStart Seattle” and sponsored by Councilmember Teresa Mosqueda, was first unveiled in mid-June. It will raise over $200 million a year, with qualifying businesses taxed 0.7% for every employee making over $150,000, and 1.4% for employees making over $500,000.

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Economist: Amazon expansion in Bellevue a ‘remarkable indictment’ of Seattle council