The company that's conquered the world of online retail is now taking on its hometown City Hall, with Amazon delivering an unprecedented public threat Wednesday against a proposal for a new tax on large employers in Seattle.

The retail giant has paused construction planning on a new downtown Seattle tower until the City Council votes on the tax to fund homelessness programs, a spokesman said.

Amazon also may sub-lease rather than occupy space in a skyscraper under construction downtown, said the spokesman, Drew Herdener.

The questioning of two high-profile ventures by the city's largest employer is a bold political jab of the kind Amazon has never made in Seattle before and could lend weight to an effort by big businesses to kill the proposed tax.

The company helmed by Jeff Bezos has planned to fill its 17-story "Block 18" tower and the skyscraper being built at Rainier Square with an estimated 7,000 workers. Mayor Jenny Durkan vowed to seek common ground, while council members pushing the measure gave no indication they intend to back down.

Councilmember Kshama Sawant accused Amazon of attempting "blackmail."

"I'm deeply concerned about the impact this could have on a whole range of issues," Durkan said in an interview about Amazon's play, declining to say whether the company gave her advance notice. "Everyone should be."

The e-commerce behemoth last week reported a quarterly profit of $1.6 billion and has been targeted by local social-justice activists, who argue a company led by the world's richest person can afford to do more to help people living without shelter.

Seattle's homeless crisis is among the worst in the country, with an official state of emergency more than two years old and a record 169 deaths recorded last year.

"It's obviously a little disconcerting when a major business says, 'We're rethinking our strategy here,'" Councilmember Mike O'Brien, a sponsor of the tax measure, said Wednesday before a meeting on the proposal at City Hall.

"If Amazon generally wants to engage about how they can be part of the solution, we welcome that conversation. But we need companies that are profitable and making billions of dollars every year to help with the folks that are being forced out of housing and ending up on the street."

Whether Amazon's pause is just a negotiating tactic or could turn into a major slowdown in growth for the company in the city is unclear, but it comes at a time when the retailer is rapidly expanding in other cities and seeking a second headquarters in North America. This week, Amazon announced additions of office space for 3,000 employees in Vancouver, B.C. and 2,000 in Boston. Amazon's threat to pull back on its Seattle plans comes as the company is already branching out, said James Young, director of the Washington Center for Real Estate Research at the University of Washington.

"The fact that they have HQ2 already in process tells me that it's a real option," Young said, describing the company's headquarters announcement in September as a warning shot for Seattle with the message, "Look, we can go elsewhere."

Seattle Times editorial columnist Brier Dudley first reported the pause.

'Head tax' proposal

Five of the council's nine members are backing an employee-hours tax on businesses grossing at least $20 million per year in Seattle that would raise an estimated $75 million annually.

They estimate the so-called "head tax" of about $500 per employee would apply to 500 to 600 companies and they are calling for it to be spent on low-income housing and emergency services for homeless people. The council has been planning to vote later this month.

The Seattle Metropolitan Chamber of Commerce, which counts Amazon as a member, has come out strongly against the proposal, describing it as a "tax on jobs" by a council that can't be trusted to spend efficiently.

The head tax could cost Amazon -- with about 45,000 Seattle workers -- more than $20 million per year in 2019 and 2020. In 2021, it would be replaced by a 0.7 percent payroll tax.

Under that formula, Amazon's liability would likely increase. Assuming the company had 50,000 Seattle employees by 2021, its payroll-tax obligation would be an estimated $39 million. Analysis of employee data posted to the job-reviews site Glassdoor suggests Amazon employees in the city are paid an average of about $110,000 per year.

"I can confirm that pending the outcome of the head-tax vote by City Council, Amazon has paused all construction planning on our Block 18 project in downtown Seattle and is evaluating options to sub-lease all space in our recently leased Rainer Square building," Herdener said in a statement. The company declined further comment.

A growth juggernaut

With employees spread across more than 40 buildings in South Lake Union and Denny Triangle, Amazon occupies about 10 million square feet of office space in Seattle -- about one-fifth of the city's top-class office space.

That's by far the most of any company in any big city in the country. But the tech powerhouse still has planned to add at least another 4 million square feet -- which would make room for an additional 20,000 employees -- and the two endeavors now up in the air account for only a portion of that.

The Block 18 tower would be part of the core campus surrounding Amazon's new biospheres and would clock in at about 400,000 square feet.

The company in October said it would occupy all 722,000 square feet of office space in the Rainier Square skyscraper, slated to be the Pacific Northwest's second-tallest.

Seattle's record construction boom in recent years has been predicated largely on Amazon's growth. The city has been adding about 10,000 new apartments and a few office towers each year, with developers banking on the company and its employees taking up much of that space.

"Amazon dominates the downtown office market," said Young, the UW real-estate expert. "Where is the additional demand going to come from if they do this and carry through with the threat?"

There's also a question of whether other projects that now exist only on paper could be scrapped.

When 2018 began, there were at least 220 slated for the area between South Lake Union and Sodo, according to the Downtown Seattle Association.

Amazon's impact

Supporters of the tax say the companies driving Seattle's economic boom are also, by attracting high-wage tech workers to the city, driving up rents and home prices. Washington state doesn't tax income or capital gains, leaving Seattle with few new revenue options as its population explodes, the measure's sponsors said in a joint statement.

"While Amazon didn't single-handedly cause this problem, they have contributed to the growing income inequality, displacement and housing affordability issues facing our city," they said.

Since Amazon opened its South Lake Union headquarters in 2010, Seattle housing costs have grown at among the fastest rates in the nation. The median cost of a single-family house in Seattle has jumped 110 percent to $820,000, while rents have increased 64 percent, with the typical two-bedroom now costing more than $2,000.

The company has stepped up to help recently on the homeless issue, on its own terms.

Two years ago, it gave Mary's Place, a non-profit that shelters homeless women and their families, the free use of a former hotel on land slated for development. Amazon later promised to give Mary's Place -- at no cost -- part of a new company building, which remains under construction downtown.

The 47,000-square-foot shelter will house more than 200 people in 65 rooms.

Yet advocates of the tax proposal say philanthropy is no substitute for sustainable public revenue.

"I hope that there's an understanding that we have an unfair system, starting with our tax system, and Amazon benefits from that system," O'Brien said.

-- Matt Day and Daniel Beekman, The Seattle Times