Businesses located along San Francisco’s gritty mid-Market Street corridor will receive significant tax breaks under legislation introduced Tuesday: up to six years of payroll tax breaks, meaning companies would pay the same tax bill even as they added more and more staff.
That’s a good deal for companies like technology startups wishing to expand, and it’s a good deal for the area, which has seen significant commercial vacancies since the dot-com boom days of the late 1990s.
But it was nearly not a good enough for Twitter, the marquee company whose threatened exit to Brisbane in part precipitated the deal.
Twitter, whose world headquarters are on Folsom Street, asked for an eight-year break from paying any payroll tax at all, according to Supervisor Jane Kim, who helped broker the “compromise” deal introduced Tuesday.
Under the compromise, Twitter would pay the same payroll tax bill it paid in 2010, when it had an estimated 350 employees, until 2017 or beyond, by which point it could have 3,000 employees, according to the Mayor’s Office.
“We understand technology companies’ desire to grow, but it was hard for me for [city revenue] to take a hit like that,” Kim told The Appeal. “We wanted something that’s going to bring jobs to Mid-Market, not just, ‘You can move to Mid-Market and pay no tax.'”
Kim declined to comment further on any negotiations between Twitter and the city, such as a good-faith commitment that the company would remain in San Francisco if the payroll tax deal is approved.
Representatives for Twitter, which has yet to comment publicly to any media on this matter, did not respond to several requests seeking comment Tuesday (one of which was, yes, a tweet).
Exactly what fiscal impact is in store for San Francisco should the plan be approved is still unknown, pending a city budget analyst report. City leaders were still assimilating the deal Tuesday.
“I need to see the numbers,” said Supervisor Sean Elsbernd, the board’s resident fiscal hawk. “Six years isn’t a terribly long time [for a payroll tax exemption], but we need to see the details.”
There is speculation in City Hall that Twitter was promised much, much more than what was offered Tuesday, perhaps by former Mayor Gavin Newsom, who is possibly Twitter’s biggest booster.
Newsom, you’ll recall, took Russian President Dmitri Medvedev on a tour of Twitter during Medvedev’s visit to San Francisco last summer. Newsom even sent out a tweet on the occasion of his daughter’s birth.
Christine Falvey, spokeswoman for current Mayor Ed Lee, did not immediately respond to a request for comment Tuesday.
Supervisor John Avalos, thus far the most vocal critic of the tax breaks, said there’s still a “really good” chance Twitter will move its headquarters to Brisbane even if the breaks are brokered.
“Twitter has to decide if they’re going to accept it or not,” he said. And thus far, the social media and communications company has been entirely silent.