San Francisco Board of Supervisors this afternoon gave preliminary approval to a payroll tax break for Twitter (8 votes for – 3 against) and other companies that relocate to the city’s depressed “Mid-Market” neighborhood more popularly known as The Tenderloin.
In recent months, Twitter and other tech companies like Zynga and Yelp have threatened to leave San Francisco due to high rents and a payroll tax structure unique in California.
Twitter was even exploring the possibility of moving to Brisbane, a city just 10 miles south of San Francisco, because unlike San Francisco, the City of Brisbane does not charge a payroll tax.
San Francisco taxes companies with payrolls of $250,000 or higher the equivalent of 1.5 percent of all employee compensation, including exercised stock options. So this directly affects companies like Twitter, Zynga and other who are the heart and soul of the San Francisco tech scene and are thus companies that the City cannot afford to lose.
Supervisor Scott Wiener agreed and said that beyond keeping Twitter in the city , the tax legislation finally lets the board act on a long-simmering issue. Meanwhile,Supervisor David Campos voted against the legislation saying that he recognized that something had to be done to revitalize the Mid-Market neighborhood.
The “Mid-Market” neighborhood borders San Francisco’s infamous ‘Tenderloin District” which is home to empty storefronts, homeless encampments, drunk homeless people all over the sidewalks and street corners,over 70 liquor stores in a 10 x 6 block city area, urine soaked sidewalks and a few adult entertainment theatres.
Twitter officials said they would move into the former San Francisco Mart building at Market and Ninth streets (just outside the tenderloin district) if the tax break is approved.
Twitter’s workforce is projected to increase from 250 to 3,000 by July 2013.