Twitter Promises to Stay in San Francisco -- if City Gives Tax Break
|Just a wink and a nod|
The Examiner is reporting that Twitter fired off a letter to city supervisors earlier today, saying it will stay in San Francisco if the city signs off on a deal giving the microblogging giant a mega tax break.
"Twitter is committed to signing a lease that will keep the company in San Francisco for six years and likely for a subsequent 10-year renewal term," the letter states.
This move packs the pressure on city supervisors, some who don't want to lose Twitter yet are still uncomfortable with the proposed deal. They have openly criticized it, calling the tax break a sop to corporate blackmail.
A new analysis from the city Controller's Office projects that if San Francisco retains Twitter, the city could realize as much as $54 million over 20 years -- even with the tax break in place.
But as Supervisor Ross Mirkarimi astutely noted today, that report doesn't include how much money taxpayers would have to shell out for more police and bus service, both of which were included to sweeten the deal.
"I don't think there is anyone in the city that wants to see Twitter leave -- I don't anyway," Mirkarimi said. "But I think there are obligations to answer questions that have not been answered. I am hearing some justification, but not in a way that seals the deal for me."
Supervisor Jane Kim, who sponsored the legislation, made some last-minute changes to the proposal that she believes could inject millions more into city coffers. Kim wants to exclude other large buildings in the designated tax-break zone, which means they would still be obligated to the payroll tax for all new hires while Twitter, which has been valued at $7 billion, would not.
Currently, businesses with an annual payroll expense of more than $250,000 have to pay a 1.5 percent tax.
However, city supervisors crafted a deal specifically to entice Twitter to move into the Central Market neighborhood rather than relocate its headquarters to Brisbane or possibly South San Francisco where it wouldn't be obligated to a payroll tax.
The Budget and Finance Committee today delayed a vote on the Twitter tax break until next week.
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