Business & Tech

Vote is near on tax breaks for Amazon’s big expansion in Seaport

Boston’s Seaport district
David L Ryan/Globe Staff/file
Boston’s Seaport district

A key city board is poised to vote Thursday on tax breaks for a big expansion by Amazon in the Seaport.

The Boston Planning & Development Agency is set to consider $5 million in city property tax breaks for the e-commerce giant, should it create 2,000 jobs and occupy a new building in the Seaport Square development over the next few years. A second $5 million would be authorized if Amazon leases a second new building at Seaport Square and creates 2,000 more jobs.

Amazon has been negotiating a lease in recent months with Seaport Square’s developer, WS Development, to make room for continued growth in Boston. Under the deal, which is not yet finalized, the company would fill a planned 18-story building in the massive project along Congress Street and have an option to lease a second.

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Filling both buildings and adding 4,000 jobs would make Amazon — which already has a large office in Kendall Square and the Back Bay and will soon open a new office in Fort Point — one of the larger private employers in Boston.

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The company insists this expansion is entirely separate from its search for a so-called second headquarters, a 50,000-job, $8 billion campus for which Boston is also a finalist. Real estate experts say it’s unlikely Amazon would have such a large facility in the Seaport and a headquarters campus elsewhere in Boston.

Officials working on the larger Amazon endeavor visited Boston last week and toured Suffolk Downs, which the city has pitched as one potential site, sources told the Globe. It’s not clear whether they also visited sites in the Seaport, in Somerville, which is also a finalist, or elsewhere in the region.

The $5 million Seaport package is flexible, allowing Amazon to claim the city tax breaks if the company adds 2,000 jobs anywhere in Massachusetts within 25 miles of Boston. That would include the company’s office in Kendall Square and its robotics plant in North Reading, or, potentially, a headquarters campus elsewhere in the city.

State officials may also be working on an incentive package for the Seaport project; a spokeswoman for the Baker administration would say only that they have been talking with Amazon about its expansion in Boston. The state board that awards major job-creation tax credits meets later this month.

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In a memo recommending the tax breaks, staff of the city’s planning agency say they are justified, in part, because Amazon’s building — part of the 23-acre Seaport Square master plan — needs to be adapted for rising sea levels.

“Additional and costly improvements,” such as elevated mechanical systems and a ground floor set two feet above 500-year flood plains, are needed to prevent flooding in future storms, a staff memo says. These changes “represent significant cost premiums over conventional construction,” the memo says, and are one reason the site remains “underutilized.”

Numerous other buildings along the waterfront, including neighboring office buildings in Seaport Square, have incorporated flood protections without receiving city tax breaks. WS paid $359 million to buy 12.5 undeveloped acres of Seaport Square in 2015, then sought changes that added more than 1 million square feet of office space to the project, including the two buildings Amazon is considering.

Construction on the first building could start this summer, though Amazon has not signed a lease. It’s not clear whether its planned expansion depends on tax breaks, and company representatives would not comment. Sources familiar with the deal said the company’s board still needs to vote on the matter.

Tim Logan can be reached at tim.logan@globe.com. Follow him on Twitter at @bytimlogan.