Harger: Amazon keeps shrinking in Seattle. Mayor Katie Wilson hasn’t even started taxing yet
Feb 26, 2026, 5:00 AM | Updated: 3:43 pm
Fair warning: I got a little fired up today. This one runs long. But if you want the short version: Amazon keeps shrinking in Seattle, and Bellevue keeps winning. Mayor Katie Wilson’s tax agenda is just warming up, and Olympia is working on an income tax that could make the whole “just move to Bellevue” strategy a lot less comforting. Now, the long version…
Amazon confirmed this week it won’t renew its lease on a seven-story building just blocks from its Seattle headquarters. There are estimates that roughly 1,500 employees will pack up and move. After May, it’s just another empty building in a city that already has plenty of them.
Not long ago, Seattle was the crane capital of America. Three years running. More construction cranes in the skyline than in New York, Los Angeles, Chicago, Boston, and Phoenix combined. You could spin around downtown and count a dozen of them from one spot.
That was the boom. Look up now. This is the bust.
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Amazon isn’t leaving the region. Just Seattle … for now
Since 2020, Amazon has given up more than a million square feet of office space in Seattle. A million. And they’re not going far. They’re crossing the lake.
Amazon’s Bellevue workforce is growing from 14,000 to a planned 25,000. Three downtown Bellevue towers that sat empty for more than a year are being built out right now. The region gets to keep Amazon. Seattle doesn’t.
And Amazon isn’t alone. The list of Seattle tech companies moving to Bellevue and the Eastside keeps growing. TikTok went to Bellevue. OpenAI went to Bellevue. Snowflake moved hundreds of employees to the Eastside. Robinhood, Meta, Shopify, Zoom. None of them chose downtown Seattle. The reasons are always the same: taxes, crime, homelessness. One real estate executive summed it up plainly: Clean and safe is everything, and Seattle isn’t that right now.
The numbers back that up. Bellevue’s office vacancy rate in 2025 was around 16%. Seattle’s downtown was already pushing 35. The market isn’t subtle.
This is what “clean and safe” actually means
The numbers tell part of the story. The people who work downtown tell the rest.
Employees are getting harassed while walking from the parking garage to the office. Open-air drug use on Third Avenue has become part of the daily commute for anyone working downtown. Seattle’s downtown property crime rate remains among the highest of any major American city, and businesses that have stayed have spent thousands on private security just to make their lobbies feel safe. Some have given up on that, too.
It’s not one incident. It’s the cumulative weight of a thousand small decisions employees make every morning. Do I want to walk two blocks from the light rail? Do I want to eat lunch outside today? Is the parking garage going to feel safe at 7 p.m.? When enough of those answers come back as “no,” remote work stops being about flexibility and becomes about avoidance. And when enough employees are avoiding downtown Seattle, the conversation with HR about relocating to Bellevue gets a lot shorter.
The homelessness crisis that Seattle has spent billions trying to solve with services and sanctioned encampments has not been solved. What’s visible on Seattle’s streets is the intersection of three crises at once: housing, addiction, and mental illness. They feed each other, and treating one without addressing the others hasn’t worked. That’s a genuine tragedy for the people living it. But it is also a business reality that no amount of good intentions has managed to separate from the bottom line.
What Bellevue offers sounds boring. That’s kind of the point
No surprise payroll taxes. No proposals to force grocery stores to stay open against their will. Predictability. Businesses prefer boring, and Bellevue has earned its moment.
But tech companies do what’s right for their bottom line. Always have. Bellevue’s cleanliness and convenience got them across the lake. That same cold calculation could take them further.
Keep in mind: Seattle Mayor Katie Wilson is just seven weeks into her first term. She hasn’t even gotten to the tax proposals yet. She’s already talking about expanded payroll taxes, a $30 minimum wage, and city-owned grocery stores. Companies hear that agenda coming and they don’t argue. They don’t write op-eds. They just quietly update their address.
Katie Wilson’s tax agenda is just getting started
The budget math is driving all of it. Seattle faces a $125-140 million deficit next year, a hole that could balloon to $300 million or more by 2029. Wilson’s newly appointed City Budget Office director told the finance committee this week that the city is “undertaking a clear-eyed multi-year process to resolve the structural deficit” and that “all options are on the table.”
In her State of the City address on Feb. 17, Wilson celebrated the $115 million haul from the existing 5% tax on compensation of more than $1 million, more than double projections. Then she told the audience: “You can expect to hear a lot more about budgets and revenue in the months ahead.”
Consider yourself warned.
Based on her campaign platform, which she has not walked back, city staff are already turning these ideas into draft legislation. What’s coming: a local capital gains tax projected to raise around $30 million, a vacancy tax targeting empty commercial buildings, further expansion of the JumpStart payroll tax, and possible new levies on high earners and professional services.
Downtown Seattle Association CEO Jon Scholes put it plainly last Friday: “We don’t need more taxes. We need more businesses paying taxes, and we’re pushing jobs outside of our city right now.”
That’s the loop Seattle can’t seem to break out of. Fewer businesses mean less tax base. A smaller tax base means a bigger deficit. A bigger deficit means more taxes. More taxes mean fewer businesses.
WA income tax could follow Seattle businesses all the way to Bellevue
Seattle’s been losing companies to Bellevue for years over taxes and livability. Katie Wilson’s agenda threatens to accelerate that. But Olympia is now competing with Seattle to see who can make Washington less attractive to business first.
The state legislature is moving fast on a new income tax. While Wilson is drawing up vacancy taxes and payroll tax expansions at the city level, state lawmakers are working on something that would follow these companies across the lake, across the state, wherever they run.
They’re calling it a millionaire’s tax, which is smart marketing. But the threshold is written into statute, not the state constitution. Any future legislature can lower it with a simple majority vote the moment the next budget shortfall arrives. And in Washington, the next budget shortfall is always arriving. The state passed a $9 billion tax increase last year and was back in a deficit hole almost immediately.
So the pitch that has kept companies in Washington, no income tax, lower cost of doing business than California, stable and predictable, is now under pressure from both directions. The City of Seattle is piling on new taxes, and the state is building a framework for an income tax that could follow businesses wherever they relocate within Washington’s borders.
Leaving Seattle for Bellevue used to solve the problem. Olympia is working on changing that math.
The companies that moved their U-Haul across the lake are still in Washington. Texas has no income tax. Florida has no income tax. Nevada has no income tax. At some point, 15 minutes across a bridge stops being far enough.
A million square feet of Seattle office space has been abandoned since 2020. Another quarter million gone in May.
Seattle used to count its cranes. Now it’s counting its vacancies.
Charlie Harger is the host of “Seattle’s Morning News” on KIRO Newsradio. You can read more of his stories and commentaries here. Follow Charlie on X and email him here.
