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Amazon headquarters would be exempt from new construction tax

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Council amended the tax bill to exempt Keystone Opportunity Zones

Stock photo of construction in Philly
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A bill to place a one percent tax on new construction projects would exempt certain properties—including the ones the potential Amazon headquarters would move into if they choose Philly for their next location.

City Council members amended the controversial construction tax bill at a meeting Thursday to add an exemption for Keystone Opportunity Zones, which are state-designated sections of the city that already have reduced or tax-free status, according to a report from Philly.com.

All three of the places that Amazon’s headquarters would move into if they choose Philly, including the Schyullkill Yards and the two uCity Square sites, are Keystone Opportunity Zoned areas, Philly.com wrote.

The decision is a big one for the bill, which has drawn both ardent supporters and opponents since it was outlined in April.

It proposes levying a one percent tax on most new construction projects and major renovations, and to put the money generated by the tax into a fund for affordable and mixed-income housing projects.

Councilwoman Maria Quinones-Sanchez, a co-sponsor of the bill, has said it will help prevent economic and racial segregation in the city. Others, like the Philadelphia Association of Community Development Corporations (PACDC) have said it could raise $20 million for affordable housing. Even the Building Industry Association has come out in support of the bill, noting a need for more affordable housing in the city.

However, some groups have not been so supportive—partly because of the strain they say it would place on potential big companies who want to develop here, like Amazon, which is eyeing Philly as one of the places to set up their second headquarters.

In a letter to City Council last week on behalf of the Building Trades Union, John Dougherty, head of International Brotherhood Of Electrical Workers Local Union 98, argued that the bill would dissuade potentially beneficial developers.

“This onerous tax proposal at this crucial time essentially tells Amazon that we’re not interested in their business,” Dougherty wrote, calling the bill “terrible timing.”

While the new amendment may alleviate some concerns about the bill’s impact on Amazon, specifically, there are still more issues that Dougherty and other community groups have with the bill.

“This ill-conceived tax would have the net effect of ending the recent, prosperous run of new construction that is transforming neglected sections of the city,” Dougherty wrote in the letter.

Following the decision Thursday, Frank Keel, spokesperson for the union said, “The Building Trades remain opposed to the 1% Construction Impact Tax and any and all proposed amendments.”

Max Ray-Riek, of the HIV/AIDS activist group ACT UP, had another reason for his opposition. He told PlanPhilly that the bill doesn’t set aside funding for people in poverty, but does allow developers to build for people making over $100,000 a year, according to the PlanPhilly article.

The bill will go in front of City Council for a final vote next week.

  • If Amazon picks Philly, it wont have to pay construction tax for affordable housing [Philly.com]
  • Construction tax bill moves forward [Curbed Philly]
  • Protest against construction tax planned even as amendments are in the offing [PlanPhilly]

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