A Moderate Move: S.F. Supervisors Try to Lure Twitter with Tax Breaks

Categories: Business, Politics
Jane Kim.jpg
Moderately progressive
Yesterday was the first real showing of how the political pendulum on the Board of Supervisors has swung the other way -- toward the moderates. Supervisor Jane Kim rolled out business-friendly legislation, which sparked criticism from progressives; even former Supervisor Chris Daly noted on his Facebook page late last night: "Jane Kim thinks being Progressive is attending three banquets in one night."

Kim, who was elected in November as a progressive, stepped out from the progressive mold and put forward legislation to try to save the city from losing the microblogging giant, Twitter, to San Mateo County. Under her proposed bill, Twitter could move to the less desirable Mid-Market neighborhood, where crime and liquor stores are rampant, and get steep tax breaks -- a proposal reminiscent of the Newsom administration.

There is good reason why it smelled like Newsom: The proposal was cobbled together in a last-minute effort with Mayor Ed Lee and Supervisor David Chiu, both moderates.

The deal would exempt growing businesses like Twitter from paying more payroll taxes on new hires for six years. The tax freeze would apply to the city's dilapidated Mid-Market area between Sixth Street and Van Ness Avenue, Kim's district.

As of now, businesses with a payroll over $250,000 pay a 1.5 percent payroll tax. Yet new businesses that start up in the designated tax-break zone will not have to shell out any payroll taxes.

The deal is being criticized by some as corporate blackmail, as Twitter threatened to move its growing business to Brisbane last month. The company, which has offices on Folsom Street, said it was running out of space and needed to move. Twitter was considering the former Wal-Mart site in Brisbane, a city of 3,500.  In a panic, the city responded by saying it would come up with a deal to entice Twitter to stay.

The city believed losing Twitter would almost certainly slow San Francisco's momentum to become a high-tech hub as it continued to lure venture capital dollars away from Silicon Valley.

Last year, former Mayor Gavin Newsom tried hard to push tax breaks through the progressive Board of Supervisors. At the time, Newsom lobbied for tax "holidays" and tax credits for businesses as a way to help stimulate job growth as San Francisco faced a 10 percent unemployment rate. 

Supervisor John Avalos, a progressive who was the chair of the budget committee at the time, initially refused to even schedule a hearing on Newsom's tax proposal, claiming tax breaks wouldn't make it through the left-leaning Board of Supervisors.

And he was right then, but he might be wrong now

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3 comments
h. brown
h. brown

That's just pennies,

Compared to the Board's 11-0 vote yesterday in favor of giving all tax dollars from the Rincon Hill developments back to the developers for 15 years (I think) by paying for all the infrastructure costs (streets, sewers, transport) that are normally paid for by the developers through impact fees. Ya gotta admire the speed with which SF developers moved when they realized (a year ago!) that Jerry Brown was going after the State licensed Redevelopment Agencies who have been the conduit for this particular sluice to the plutocrats for the last 6 decades.

The new instrument is called an IFD (Infrastructure Finance District). Read Melissa Griffin's great coverage of the matter in her February 1st Examiner article.

Keep in mind that this is just the first of a horde of IFD's. They'll breed faster than rabbits and CBD's.

Go Giants!

h.

MrEricSir
MrEricSir

Why are we giving for-profit corporations a tax break? That seems neither liberal nor conservative, it's just bullshit.

scurvy
scurvy

Call their bluff. Twitter could never leave San Francisco. Their employees are the archetypal tech hipsters. Brisbane? San Mateo? Pfft! Can't ride your fixie there! Snoop Dogg would never show up in Brisbane! Seriously people, grow a set and call their bluff. There's no possibility of Twitter moving out of San Francisco. Just. Not. Happening.

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