Amazon will find it hard to follow on threat to leave Seattle even as city imposes tax on large firms

Despite being upset by the city’s plan to levy a head tax that could cost it about US$12.5 million a year, there are no signs to suggest that the tech giant is about to pack up and leave its hometown

Reading Time:3 minutes

Amazon is one of the largest employers in Seattle with about 45,000 staff on its payroll. Photo: AFP

Published: 8:01pm, 4 Jun 2018Updated: 6:19pm, 5 Jun 2018

Despite Amazon’s threat to scale back in Seattle after the city enacted a head tax, it could be costly for the giant retailer to retreat from its hometown.

The company, which has more than 45,000 employees in Seattle, has amassed an equally gargantuan real-estate footprint during a decade-long office-space shopping spree.

Based on average office rents in the greater downtown area, Amazon’s office rent bill is likely north of US$200 million a year – far more than its estimated US$12.5 million bill under the head tax. It would be a herculean task to empty a big chunk of that space and find new tenants, real-estate industry sources say.

At the Seattle City Council committee meeting on May 9, public comment was heard on a controversial proposal to tax large businesses such as Amazon to fund efforts to combat homelessness. Photo: AP Photo

There is little to suggest Amazon is putting such plans into action yet. In the month since Amazon first suggested it would consider slowing its growth in Seattle, the company has posted ads for more than 1,200 jobs based in the city, a pace similar to the company’s feverish hiring of recent years.

“They have a lot invested,” said Brian Hatcher, executive vice-president at the Kidder Mathews commercial real-estate brokerage in Seattle. “Amazon has a bunch of people here already, they all have families and lives here. I just don’t think they’re going to pick up and leave, or scale back.”