Zendesk's new corporate headquarters shows dramatic transformation of mid-Market, while bitter eviction battles drag on down the street


Although the mid-Market Street headquarters of Twitter was targeted with protests by the city's largest employee union this spring, Zendesk was technically the first company to take advantage of what came to be known as the Twitter tax break.

Crafted by Mayor Ed Lee along with Sups. David Chiu and Jane Kim in 2011, that controversial policy lured the elite tech sector to the central core with the promise of payroll-tax exclusion — leading progressives to deride it as corporate welfare, served up to an industry already soaked in venture capital.

In the years since, the property values around mid-Market have swelled — ushering in the revitalization fervently desired by Lee and his political allies, but also putting the squeeze on long-term tenants who couldn't keep pace with rising rents.

Some area nonprofits have been sent packing for the East Bay, while a group of relatively low-income tenants residing at nearby 1049 Market Street continue to float in a state of limbo, having been threatened with evictions that haven't been carried out yet but also haven't been rescinded.

When members of the media were invited to survey Zendesk's sprawling new corporate headquarters July 9, spanning eight floors of newly renovated office space, I took the opportunity to witness firsthand the mid-Market facelift ushered in by the Twitter tax break.

What we found was a meticulously crafted corporate space populated by hip, well-intentioned employees, who seemed as if they inhabit an altogether different city — maybe a different world — than that of low-income residents living in the surrounding neighborhood.



"My, how things change so rapidly," Mayor Lee said when he took the stage at Zendesk. "Two years ago, [Zendesk CEO Mikkel Svane] and I, and Sup. Kim, were celebrating the expansion from one floor to two floors. And just in literally two years, we're celebrating a fantastic IPO."

Zendesk's May 15 IPO was hailed by investors as a sign that cloud computing stocks could perform well, raising just under $100 million on its first day of public trading.

Lee thanked Zendesk for its contributions to the community. The company had just announced its intention to open up its basement space for community programs and dinners for neighborhood groups, in partnership with area nonprofits and childcare providers. Under its community benefit agreement with the city, a required tradeoff for the tax break, the company commits volunteer service to activities like serving hot lunch to destitute clients at the St. Anthony's Foundation.

"Already, being a major resident in mid-Market, I congratulate you on working so closely with our Office of Economic Development staff, our ... nonprofits, our arts community," the mayor said. "This building compliments so much of what I've envisioned for Market Street — to bring it back as a grandiose place. "

"The sense of being part of San Francisco reverberates with all your employees," he added with an approving smile.

Zendesk, which sells customer-service software that's widely used even if not well known outside the tech industry, has more than tripled in size in just a few years, expanding from 80 employees to more than 360 since 2011.

The grand opening bash was held on the basement level, equipped with a stage, amphitheater, and bar, with natural light filtering through the first floor. The mood was celebratory, with catering staff circulating through with trays of hors d'oeuvres and fresh-baked treats. Lee and Sup. Kim mixed with the crowd and delivered short speeches. Zendesk staff even presented Kim with a birthday cake, candles ablaze.