Amazon lets a South Lake Union lease lapse in Seattle

Amazon will not renew one of its earliest South Lake Union leases, amounting to about 1.4% of its Seattle office space, as it pursues a regional growth strategy that would offer employees more flexibility in work location.

The company said Thursday that by the end of the year, about 1,000 human resources employees assigned to the 2201 Westlake building, referred to internally as Varzea, will relocate “to other offices in our Puget Sound campus.”

In a statement, Amazon said it is always evaluating its office space “based on business needs, growth forecasts, access to talent, and feedback on what locations are convenient for our employees.” The company declined to provide further details.

Critics of the Seattle City Council have seen in Amazon’s plans for major growth in Bellevue, and now this lapsing lease, a rebuke of council policies including a new tax on business payrolls and rhetoric maligning the company.

In 2018, Amazon made known its opposition to the council’s proposed tax on business payrolls – branded an “Amazon tax” by Councilmember Kshama Sawant — by threatening not to advance on its Block 18 building, which is now nearing completion in the Denny Triangle neighborhood, and to sublease space it had claimed in the under-construction Rainier Square tower at Fifth Avenue and Union Street. The council reversed itself, but in 2019, Amazon said it would sublease the 722,000 square feet of offices in the skyscraper anyway. Later that year, the company poured nearly $1.5 million into seven city council races, but its favored candidates lost in five of them.

This year, Amazon has said little officially about Seattle politics, leaving many to wonder about its plans for the city and try to interpret its actions. Amazon issued no statements on the council’s Jump Start tax, under which it will owe a tax of 1.4% of salaries of Seattle employees earning $150,000 or more, starting in 2021. Amazon was one of several area corporations that supported a Washington House bill early this year that would’ve allowed King County to enact a payroll tax on large businesses.

Last week, the company detailed plans to build or lease enough space in Bellevue for 25,000 employees by the middle of the decade. It began leasing space there in 2016 and said last year that an entire corporate division, the worldwide operations group, would be based in the city in the coming three years. That will involve moving some jobs from Seattle, though the company has said previously that the space those workers vacate would be filled by new hires.

In 2016 Amazon also acquired the land for the 388,000-square-foot Block 18 building on Seventh Avenue, between Bell and Blanchard. It has made no plans for further development in Seattle since.

Amazon said Wednesday it has a record 33,000 open corporate and technology roles it is trying to fill at locations across the country. The company listed nearly 6,600 job openings in Seattle — about eight times as many as it had available in the next largest city, by openings, Bengaluru (Bangalore), India — though openings here are down by more than 40% since February.

In a subtle sign of its evolving view of the region, an Amazon webpage describing its footprint here is named “Amazon in the Puget Sound,” including information about its growing Eastside presence in both Bellevue and Redmond, and the dense, urban campus it built and leased in Seattle’s South Lake Union and Denny Triangle neighborhoods over the last decade.

Today, that campus includes about 7 million square feet of leased space and 5.8 million square feet it owns, including the Block 18 building, room enough for its more than 55,000 employees in the city, up from about 45,000 in 2019 — most of whom have been working from home since March, due to the coronavirus pandemic, and will have the option to continue doing so at least through early next year.  

Amazon leased 180,000 square feet of space in the 2201 Westlake building, overlooking the busy intersection of Westlake Avenue and Denny Way, in 2010, one of its early moves to consolidate its headquarters in the area. At the time, the company’s headquarters were in the Pacific Medical Center building on Beacon Hill, with several thousand Seattle employees spread among leased buildings in and around downtown.  

The Puget Sound Business Journal first reported that Amazon would not renew its 2201 Westlake lease, which had been discussed in commercial real estate circles since July.