First Amazon pulled out of New York, now it’s backing away from a Seattle skyscraper that could have held as many as 5,000 employees. The Seattle Times reported Wednesday the company has decided not to occupy a 58-story building but instead to lease it out to other companies:
Scheduled to open next year, the $570 million Rainier Square tower project will be the second-tallest building in the Pacific Northwest, at 58 stories. It also will include luxury apartments and a hotel, as well as a PCC Community Markets on the ground floor.
Even by Amazon’s standards, the office commitment was huge: Only a few companies — Starbucks, Google and Facebook — have more office space in Seattle altogether than Amazon was planning to occupy in Rainier Square.
It’s not clear what motivated the change of heart now but the possibility of sub-leasing rather than occupying the tower was first raised last May in the midst of the debate over the head tax:
The retail giant has paused construction planning on a new downtown Seattle tower until the City Council votes on the tax to fund homelessness programs, a spokesman said.
Amazon also may sub-lease rather than occupy space in a skyscraper under construction downtown, said the spokesman, Drew Herdener…
Amazon’s threat to pull back on its Seattle plans comes as the company is already branching out, said James Young, director of the Washington Center for Real Estate Research at the University of Washington.
“The fact that they have HQ2 already in process tells me that it’s a real option,” Young said, describing the company’s headquarters announcement in September as a warning shot for Seattle with the message, “Look, we can go elsewhere.”
Seattle did pass the head tax intended to raise money to deal with the city’s homelessness. The leader of the push for the tax was socialist City Council member Kshama Sawant. However, less than a month later the City Council rescinded the tax. One of the things motivating that was a poll showing that while the overwhelming majority of city residents agreed homelessness was a top concern, a similar majority were unhappy with the City Council’s spending to deal with it.
In the wake of the tax being rescinded, Amazon resumed planning for one of the projects but never committed to occupying the Rainier Square tower. As you can see from the excerpt above, there was some speculation that the threat might be connected to Amazon’s HQ2 search.
Amazon eventually announced plans to build new office space in New York and Northern Virginia. When the New York deal fell apart, Amazon released a statement which said in part, “For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term.” While the statement praised the governor and Mayor de Blasio, there was strong opposition from a small group of progressives who were opposed to the tax deal and objected to Amazon on the grounds that it is a non-union shop. Rep. Pete King blamed the failure on progressive sanctimony:
This is one time I agree with @NYCMayor de Blasio and @NYGovCuomo. Loss of @Amazon is terrible for New York. All because progressives put sanctimony and ideological purity before workers and taxpayers. Sad day for New York.
— Rep. Pete King (@RepPeteKing) February 14, 2019
A State Assembly Rep. blamed “anti-capitalists”:
Nice going anti-capitalists.
Taxpayers wanted a BETTER deal not to KILL the deal. Those elected officials who fought @amazon tooth and nail without flexibility just lost 25,000 jobs for their constituents and the people of New York City. #AmazonHQ2 #NYC https://t.co/qHwq3dgP23
— Nicole Malliotakis (@NMalliotakis) February 14, 2019
As if to confirm that reading, socialist Alexandria Ocasio-Cortez celebrated the defeat of “Amazon’s corporate greed.”
Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world. https://t.co/nyvm5vtH9k
— Alexandria Ocasio-Cortez (@AOC) February 14, 2019
It’s certainly possible to read too much into two data points separated by nearly a year, but I’m going to offer what I think is one plausible take on what’s happening here. Amazon is now aware that there is a new, socialist politics which has a foothold in some locations and which is eager to make the company and its founder a target. Granted, Amazon won on rescinding the head tax in Seattle but the message was clear: It took the threat of abandoning future growth in the city to make it clear the company had other options.
Subsequently, Amazon lost in New York and once again it was socialists celebrating the departure. Could they have stayed and fought as Mayor de Blasio wanted them to do? Maybe, but the lesson of Seattle was that you had to be willing to leave, otherwise Amazon becomes a punching bag for the far left and there are no consequences.
Jeff Bezos is too smart to frame the problem as bluntly as I am, but I wonder if there isn’t some closely held memo circulating in Amazon’s upper echelons about the danger the socialist moment presents to one of the world’s most successful capitalist companies. Frankly, Bezos would have to be an idiot not to see the connection at this point.
For the moment it seems the solution is simply to stepping away from those places where serious opposition could create a problem. There are plenty of other places for Amazon to go, at least for the moment.