There are 44 biotech companies employing hundreds of people at San Francisco’s Mission Bay area — an increase of 41 since 2004. This is a signal that The City’s biotech tax waiver is working and stronger incentives for the film industry and clean and green technology should be implemented.
In 2005, The City began offering certain biotech companies an exemption from the 1.5 percent payroll tax. Although only seven companies received a tax break in 2007, for a total of $319,123, it signaled The City’s strong commitment to an industry that has mushroomed since 1992, with revenues from the U.S. health care biotech industry increasing from $8 billion in 1992 to $50.7 billion in 2005. In addition to the tax exemption, The City donated 43 acres of land in an effort to create a biotech hub that would draw private companies, and it has been successful with more than a couple of companies abandoning South San Francisco, long viewed as the Bay Area biotech home because of the presence of industry giants such as Genentech and Elan.
It is this sort of innovative and forward-thinking policy decision that San Francisco officials need to make in order to keep The City attractive to growing industries that generate jobs, investors and tax revenue for city coffers.
San Francisco’s current top revenue-generating industry is tourism — an industry that fluctuates with the economy and the strength of the dollar, not to mention unpredictable events such as the terrorist attacks of Sept. 11, 2001.
As The Examiner has been reporting for more than four years, The City’s take from the film industry has been in decline since 1999, and reached an all-time low in 2003 and the first half of 2004 when no major pictures where filmed, mainly due to the enormous financial incentives other states and foreign cities have created to lure productions.
In 2006, an extremely limited rebate program was put in place, but the modest givebacks did very little to revive an industry that once produced thousands of jobs for the Bay Area.
This spring, attempts to raise the tax incentives for companies associated with film production was squashed by the Board of Supervisors.
Recently, Mayor Gavin Newsom has been touting the future of clean and green technology, and redevelopment plans for the long-abandoned Hunters Point Shipyard include a state-of-the-art campus in an attempt lure the burgeoning sector. A payroll-tax exemption for certain green and clean technology also is in place, and the mayor has actively courted these types of companies.
The future of San Francisco rests on the strength of its economy, and drawing highly desirable industries to set up shop in The City’s new emerging neighborhoods, such as Mission Bay and the redeveloped shipyard. This should be a top priority alongside the retention of existing industries. Local politicians who do not want bend to “big corporations” should still be thinking twice about tax rebate and incentive programs as The City struggles with its $300 million-plus deficit.