Amazon further solidified its expansion plans into Bellevue with an announcement Tuesday that it plans to lease another office building in the Seattle suburb.
The company will lease the 25-story Artise tower, planned for 788 106th Ave. N.E., once it is built in 2024, Amazon real estate officer John Schoettler said in a blog post.
“This additional space will serve to accommodate the company’s job creation efforts in the Puget Sound region,” Schoettler wrote.
Amazon last year announced it planned to grow its Bellevue presence to 25,000 employees by 2025, sending developers scurrying to craft office tower proposals that might tempt the rapidly expanding commerce behemoth. In recent years, Amazon has signed leases for more than 2 million square feet of office space under construction in Bellevue and announced plans to build two towers of its own. All told, Amazon’s Bellevue footprint is slated to encompass 13 office towers, according to the Puget Sound Business Journal, which first reported Amazon’s new lease.
A degree of Amazon’s expansion into Bellevue will come at the expense of its nearly 55,000-strong employee presence in Seattle. The company has said its Bellevue workforce will be composed both of new positions and employees relocated from Seattle, including the company’s global operations team.
There is at least one inducement for Amazon to begin siphoning employees out of Seattle: Starting next January, Amazon will owe a payroll tax starting at 1.4% on salaries earned by Seattle-based employees.
Proceeds from the tax, which applies to businesses with more than $7 million in payroll, will fund coronavirus relief efforts, city services and housing for homeless and low-income individuals, business assistance and community development. Amazon has not commented publicly on the tax.
Tax experts say it’s uncommon for businesses to move to a new jurisdiction in response to higher taxes.
“The actual literal relocation of business facilities and jobs is an extremely rare phenomenon,” said Michael Mazerov, senior fellow at the Center on Budget and Policy Priorities. “I’m not saying it would never happen, but … it’s very rare.”
Concern flared last year that Amazon could be planning to surreptitiously shuffle employees across Lake Washington after it let the lease for its Varzea building in Seattle lapse. While Amazon could similarly decline to renew its other Seattle leases when they expire, such a process would be far from abrupt, and it would be unlikely to lead to a total evacuation: Office leases typically have three- to 15-year terms, and Amazon owns roughly half the real estate it occupies.
An Amazon spokesperson declined to comment on the company’s plans for its Seattle offices.
Its swift growth on the eastern shore of Lake Washington notwithstanding, Amazon’s presence in Bellevue isn’t likely to rival the company’s sprawling South Lake Union campus any time soon. In Seattle, Amazon occupies nearly 13 million square feet of office space, compared with the roughly 6 million square feet of space the company is slotted to own or lease in Bellevue.
The Bellevue campus development is taking shape alongside another major building boom at Amazon’s second headquarters in Arlington, Virginia, where roughly 5 million square feet of Amazon office space is under construction to house an anticipated 25,000 employees.