Citizens advisory committee recommends rejection of five mid-Market community benefit agreements

A citizens advisory committee took a stand last week by rejecting proposed community benefit agreements from Twitter and other technology companies seeking to receive The City’s mid-Market tax break.

Despite the advisory committee’s mostly symbolic action, City Administrator Naomi Kelly, who is in charge of negotiating the terms, is still expected to approve the agreements by the Jan. 31 deadline — incorporating many of the committee’s suggestions.

The board’s vote to reject all but one of the six community benefit agreements — including Microsoft/Yammer, Spotify, Advisor, One Kings Lane and Twitter — is emblematic of the tension that persists in San Francisco between the technology industry that has boomed during the past three years and the residents who have struggled with its impacts.

Unemployment in The City is way down from 2010, but rents and cost of living have soared along with evictions.

Citizens Advisory Committee for the Central Market-Tenderloin Area Chairman Peter Masiak said the votes were an expression of the “frustration with the process, the frustration of the lack of teeth and just the acknowledgement that a lot of these still have a lot of ways to go.”

At the Jan. 2 meeting, committee members made it clear they were unhappy with the lack of substance in some of the agreements and language such as “encourage” and other vague terms that they said made requirements impossible to evaluate.

Companies must accomplish at least 80 percent of the agreed-upon terms of the benefit proposals to receive the tax break.

One of the more notable changes compared to last year and one praised by the committee was the requirement that companies complete a monthly report on the progress made in accomplishing the agreement terms, as well as publicly disclosingwhen each task is deemed complete by Kelly.

Bill Barnes, a Kelly aide, said, “We improved the process a lot. Is it perfect? No.” But he noted that, “These agreements are stronger because of everybody’s participation.”

The benefit agreements were included as part of the mid-Market Street tax break to secure support for its passage in April 2011 by the Board of Supervisors. They are intended to counter adverse gentrification forces in The City.

In approving the agreement with Zendesk, which was the first company to enter into one three years ago, the committee praised the document for having specific measurable requirements. The company has also agreed to disclose its individual tax break amount, while other companies like Twitter have refused.

The only tax information released by The City is the total number of companies and the total combined tax break. Last year, 14 mid-Market companies received a combined $1.9 million tax break. Only those with payrolls in excess of $1 million must enter into a community benefit agreement.

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