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Thu September 26, 2013
Former Amazon Building Lease Could Cost $270M over 30 Years
More than $270 million over 30 years. That’s how much it could cost the state of Washington to lease and operate the former headquarters of Amazon.com.
Earlier this year, state lawmakers voted to turn the building into a new training center for future health care workers. The preliminary cost estimate is contained in documents released as part of a public records request.
Pacific Tower is that 14-story brownish-red former hospital that you can’t miss if you’re stuck on Interstate 5 south of downtown Seattle. It’s now empty. The state of Washington has signed a letter of intent to lease it for a community college healthcare training program to fulfill demand created by Obamacare.
Internal documents peg the total cost of that lease, including utilities and maintenance, at more than $270 million over 30 years. It’s not a good value for taxpayers, says Senate Majority Leader Rodney Tom, a Democrat aligned with Republicans.
“You had a very sophisticated operator Wright Runstad that couldn’t make that building work, and to think that the state can come in there and make it work—it just makes no sense,” Tom said.
Wright Runstad lost its lease on the building after it couldn’t find a replacement for Amazon.com and missed a lease payment. Democratic Speaker of the House Frank Chopp has been a key champion of the plan for the state to take over Pacific Tower. He was traveling and unavailable, but fellow House Democrat Jamie Pedersen says he thinks the lease pencils out, especially since the rent money would go to a development authority whose primary mission is to fund low-income health care.
“Where it really becomes a win, win, win is that you’re getting a pretty good deal on a great building, you’re using the building to a great effect, and all of the rent from the lease is going to help people get healthcare,” Pedersen said.
Washington state is currently in the midst of a 90-day due diligence review of the proposed 30-year lease. State officials caution the $270 million cost projection is “very preliminary.” Also, the state would hope to offset at least half that cost by subletting space in Pacific Tower to other tenants.