Mid-Market companies seeking tax break to create benefit agreements 

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  • Evan DuCharme/S.F. Examiner file photo
  • Mid-Market companies like Twitter are applying for tax breaks.
Technology companies benefiting from a mid-Market Street tax break have been at the receiving end of a litany of complaints from community members reeling from economic pressures the tech industry has unleashed on The City beginning three years ago.

Gathered in a room with 200 nonprofit directors, city officials and residents, tech representatives from such companies as Microsoft, Twitter, Spotify and Zendesk listened as their neighbors in the Tenderloin and South of the Market complained about skyrocketing residential and commercial rents, evictions and a lack of local hiring.

The Wednesday afternoon meeting in the San Francisco Main Library’s auditorium was the kick-off of the process for creating what are known as community benefit agreements.

Companies with payrolls in excess of $1 million must enter into these one-year agreements with City Administrator Naomi Kelly, guided by community input, every time they apply for the tax break imposed in mid-Market. Last year, 14 mid-Market companies received a combined $1.9 million tax break and six signed agreements. This year, nine companies must create benefit agreements, which city officials say is a way to counter gentrification forces.

Some nonprofits pitched to the tech companies for their investment to help them satisfy agreement obligations. Susan King, the director of the Sunday Streets nonprofit, which puts on the popular neighborhood street closure events, announced her rent was doubling and called on tech reps for a “spare room for us.”

“We would really like to see a lot of these companies being more robustly involved financially to the agencies and organizations that are in our milieu,” King added.

Others sought to force a broader discussion of tech impacts, and at times, the discussion grew heated.

“Tech company employees, your presence here by and large meant the displacement, removal and eviction of somebody that was already here, of a person of color more than likely, a Chicano, an African-American, or perhaps an Asian elder,” said Tony Robles, a poet and housing activist. “The gentrification and evictions, it means death for a lot of elders.”

Kelly praised the area’s valuable diversity and said the tough conditions could improve with investment from the tech companies.

“Major investment is required to address the real needs of this community,” she said. Kelly noted how the area’s average household income is about $22,205, compared to the citywide $71,000, and 28 percent of the area’s residents are living in poverty compared to the 12 percent citywide.

Sam Dennison, of Faithful Fools Street Ministry in the Tenderloin, said there are no easy fixes to address the economic pressures.

“It’s not going to be simple legislation that says no eviction or some eviction, or this is allowed or that’s not allowed,” Dennison said. Instead, she said there needs to be a broad discussion among tech employees and residents to create the “vision for our community as a just community.”

Mid-Market companies with a payroll in excess of $1 million must create a community benefit agreement to receive a tax break. This year nine companies applied for the tax break by the Nov. 1 deadline. They include the following:

Five returning companies

Zendesk

Zoosk

One Kings Lane

Twitter

Yammer/Microsoft

Four new companies

Advisor

Spotify

Offline Labs

Golden Gate Restaurant Group (Burger King at Eighth and Market streets)

Source: City Administrator’s Office

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Monday, Sep 15, 2014

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