Twitter tax break could help a well-connected landlord

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Owners of SF Mart couldn't reach an agreement with Twitter, but the proposed tax break could seal the deal
www.sfmart.com

Opposition to the proposal to give millions of dollars in city payroll tax breaks to Twitter and other companies that open for business in the mid-Market area has focused on the bad precedent of caving into demands for corporate welfare and the lead role that two people who call themselves progressives – Sup. Jane Kim and Board President David Chiu – are taking in pushing the deal.

But behind-the-scenes, there's another aspect of the deal that is troubling to advocates for transparent government that acts in the broad public interest, rather than that of powerful individuals. And once again, the specter at the center of this insider deal-making is none other that former mayor Willie Brown, whose close allies seem to once again have the run of City Hall.

The mid-Market property that Twitter wants to move into is San Francisco Mart, a million-square-foot building at Market and 9th streets, which sources say has been having a hard time finding tenants to fulfill its ambitious plan to “transition and reinvent” the old furniture outlet as a modern home for high-tech businesses. Most recently, they were unable to seal the deal with Twitter – until the tax break proposal popped up.

The building is owned by millionaire developer Alwin Dworman, founder of the ADCO Group and someone who has had a 30-plus-year friendship with Brown, who sang Dworman's praises in this 2007 article from the San Francisco Business Times discussing this property and others. The property is also operated by Linda Corso, longtime partner of Warren Hinckle, a local media figure with close ties to Brown (as well as Gavin Newsom, who last year named Hinckle as his alternative representative to the DCCC). Reached by phone yesterday, Corso said she wasn't directly involved in the negotiations with Twitter and would have someone call us, but nobody did.

Brown's name has been popping up quite a bit in recent months as he and his allies re-exert their deal-making influence on the city, starting four months ago with his stealth support for Kim's campaign and continuing with his role in elevating his protege Ed Lee to the interim mayor post (the way the pair ran City Hall when Brown was mayor is also the subject of an investigative report in this week's Guardian) and placing ally Richard Johns onto the Historic Preservation Commission over progressive objections that he was unqualified.

Reached on his cell phone, Brown refused to comment, telling us, “I don't want to talk to the the Bay Guardian ever in my life. Goodbye.” There is no indication that Brown or other representatives for Dworman lobbied the supervisors over the deal, and both Kim and Chiu say they weren't contacted. “I've never spoken to the man and I don't know much about his business,” Chiu said of Dworman, although he said that he was told by people in the Mayor Office, which brokered the deal, that Twitter was looking at moving into Dworman's building.

Kim has maintained that she has very little contact with Brown and doesn't know why he supported her candidacy. And she said the benefits for Dworman and other big mid-Market landlords who will profit from her legislation wasn't a factor in her decision to sponsor it. In a prepared statement to the Guardian, she wrote, “I am not aware of any lobbyists for the Mid-Market legislation and therefore certainly have not met with any.  I have communicated directly with Twitter, who are [sic] excited to be a part of revitalizing the Mid-Market corridor and about partnering with community-based organizations and schools who serve the neighboring communities of SOMA and the Tenderloin.  Our office has convened neighborhood stakeholders who will be directly impacted by this legislation and they are currently committed to being a part of this dialogue over the next month."

Kim told us last week that she philosophically opposes business tax breaks, but that she wanted to help stimulate the mid-Market area and keep Twitter from following through on its threat to leave town. Despite calling himself a progressive, Chiu has supported using targeted tax breaks as a economic development tool, including the biotech tax credit. And yesterday, he told us, “I would love to bring more companies in the mid-Market area...If we don't do this policy, we will see future years of zero economic activity in that area.”

But progressives say these tax breaks are nothing but corporate welfare that will exacerbate the city's budget deficit. During a benefit event for Lyon Martin Health Services last night at the Buck Tavern, which is owned by Kim predecessor Chris Daly, signs plastered throughout the bar urged the public to oppose the Twitter tax break in order to preserve public health and other vital city services.

Comments

It didn't take Jane Kim 24 hours to sell out. She is way too full of herself. Chiu was always a corporate Democrat....

Posted by George on Feb. 10, 2011 @ 4:51 pm

That faraway sound you hear is Debra Walker yelling I Told You So.

Posted by Prog on Feb. 10, 2011 @ 5:41 pm

She's out of the picture unless she carpetbags it into another district. And if you think she's not done then ask her to run again in 4 years time - all the backing of all the lilliputian progressives in this city didn't put her into office last year and it won't help next time either.

Posted by Lucretia Snapples on Feb. 10, 2011 @ 6:13 pm

Ironic that you talk about Walker carpetbagging into another district since that's exactly how Jane Kim got herself into the District 6 scene.

Posted by Guest on Feb. 11, 2011 @ 9:44 am

Why is the Guardian so opposed to one but not the other?

Posted by Lucretia Snapples on Feb. 10, 2011 @ 5:23 pm

to be so irrelevant that Jane Kim and David Chiu don't give a flying fuck what you have to say, and all you're left with is pining for Chris Daly. Snnniffff. Is that the smell of San Francisco passing you by? Yes, I think it is.

Posted by Oops on Feb. 10, 2011 @ 7:01 pm

It's not rigorous or honest to suggest that all tax subsidies for corporate entities is necessarily inconsistent with progressive principles.

Posted by Guest on Feb. 10, 2011 @ 9:02 pm

Actually, I think it is progressive to oppose corporate tax breaks, but let me be more rigorous about my point. Social services in this city have been cut every year for a decade, fees have gone up for individual services, and business tax rates have remained static, with only about 10 percent of city businesses even paying the payroll tax. And on the state level, businesses used to pay two-thirds of this state's property taxes, but in the wake of Prop. 13 the balance has flipped, with individuals paying two-thirds and businesses paying one third. If Twitter is primed for the rapid growth they promise (even if, like most dot.com businesses, their revenues projections are mostly speculative wealth because most of us will never pay them a dime), and if they want the cultural cache of being headquartered in San Francisco, they should pay their taxes and contribute to stemming this city's slow public sector deterioration. And to oppose that view is fiscal conservativism, plain and simple.

Posted by steven on Feb. 11, 2011 @ 10:54 am

They simply raise their prices, and so the tax gets paid by all of us. Companies are conduits for costs. They're not tax-paying people, and only peoole pay taxes.

And while it's tough for a company to relocate to Bermuda or Switzerland for tax reasons, although some do, it's trivially easy to move 10 miles south, east or north, and be in a more business-friendly County.

The City is competing for their business, and we need them more than they need us.

Posted by Rick on Feb. 11, 2011 @ 11:17 am

Did you say competition, Rick? Because competition limits corporate price increases. They already charge what the market will bear.

Posted by Guest on Feb. 11, 2011 @ 11:49 pm

If you want an economic system where price = costs, you should try the Soviet Union circa 1970. They tried that type of economic system and we can see how that worked out.

Of course companies pay tax. And they can't always - or even sometimes - pass those taxes onto the consumer. If they could, we'd never hear the business community bitch and moan about new or higher taxes.

It's a complicated question as to whether new or higher business taxes will be paid by the consumer, or by the shareholders, or if the bonuses of the executives will have to be reduced, or may result in lower wages to workers. And every industry and business is slightly different depending on its overall competitive situation.

But to say "businesses don't pay taxes, only consumers do" shows how little Rick knows about business and taxes. Anotehr spin doctor. Is Rick a lobbiest? A lawyer? A politician? At a minimum Rick is someone who doesn't care about the truth and just wants a predetermined outcome.

Posted by Guest on Feb. 12, 2011 @ 6:41 am

Poverty is not a progressive value. There is a homicide epidemic in our communities of color, not a progressive value. I am at the point where I think we need to be willing to try new approaches to job creation. This is a civil rights issue. I have three children in their twenties, they've all lost peers. This is unacceptable. I do not have the patience to wait for "perfect" solutions, but I know under capitalism it is business that creates jobs. People with good paying jobs spend money on goods and services, it can be a race to the top instead of the bottom!

Posted by GuestTami on Feb. 10, 2011 @ 9:49 pm

Yeah,

When research showed David's company (Grassroots Enterprise) had the former head of the Christian Coalition (Randy Tate) on its board of directors, Luke Thomas cornered Chiu and filmed asking him about Tate. Chiu was, after all, the co-founder of the company. Chiu claimed (on film) that he didn't know who Randy Tate was. Within a few hours he was back tracking and saying that he knew who he was but that he had opposed putting him on their board.

Man's a born liar.

I told you so.

But, .....

go Giants!

h.

Posted by Guest h. brown on Feb. 10, 2011 @ 10:48 pm

Isn't good connections the purpose of attempting to elect progressives to city office? Don't progressives get elected promising to do the bidding of the chosen special interests? It's a bit odd to complain that someone else is traveling on connections when that's the goal.

...and that last paragraph, what does that have to do with anything?

And lastly how is Warren Hinkle still alive? I see that guy in north beach and he huffs and puffs up Columbus St like he's going to fall over dead. What a strange career, he edited and wrote for Ramparts and ends up forty years later partaking in second rate SF politics.

Posted by matlock on Feb. 10, 2011 @ 11:24 pm

These folks seem to be just trying to clean up a blighted mess...take a deep breath.

Posted by Flowers on Feb. 10, 2011 @ 11:50 pm

There is something about Jane Kim that seems to be both puzzling and ' unctuous ! '
After being newly elected as a city supervisor, she quickly praised interim mayor Ed Lee with ancient root from Asian Law Caucus !?.
And yes, the President Supervisor David Chiu with something that was not quite clear. Why all this sudden embracing to such particular identities ?
David Chiu wanted to cut whistleblower reward payment from $ 500K max to mere $100K for exposing SF property owners' tax evasion,
Jane Kim probably, if not already, will just "concur"
In any ' transaction' $100K is always easier to 'handle' than $500K,
don't you think so? and I m speaking plain English ;)

Posted by Surprised again on Feb. 11, 2011 @ 2:34 am

Sounds like a good deal to me. We need to keep more businesses in town. Twitter was planning on moving to Brisbane, which wouldn't have been hard for them to do (just a few miles south).

I don't buy the argument that every big business will threaten to leave unless they get a tax break. The reality is that many big corporations that were headquartered in San Francisco have already left. Bank of America--North Carolina. Chevron--San Ramon. StarKist--Pittsburgh. Even law firms are closing their San Francisco shops and just consolidating in Silicon Valley. (We still have PG&E--and the SFBG loves PG&E!)

The new model is for companies--especially tech companies--to be based elsewhere and have a small satellite office in San Francisco because some of their talent want to live here and don't like to commute. I'd suggest that we don't want to become a city full of satellite offices.

Sounds like Jane Kim, Ed Lee, and David Chiu are being rational.

Posted by The Commish on Feb. 11, 2011 @ 7:41 am

Neighborhood-specific tax breaks (sometimes called enterprise zones) originate from policies akin to the philosophy of supply-side economics. Examination of the job creation benefits of such tax zoning shows really iffy results (for example: http://www.house.leg.state.mn.us/hrd/pubs/entzones.pdf). When you factor that into the revelation that there is an insider landlord who stands to benefit from this legislation, the proposal emits a reek.

Posted by Guest on Feb. 11, 2011 @ 8:23 am

That study is from Minnesota. Not sure how applicable it is. You're trying to make this ideological ("akin to supply side economics"). I'm viewing it from a practical point of view. Twitter is planning to leave. If they get a tax break they might stay. If they leave, they won't be paying taxes anyway.

Posted by The Commish on Feb. 11, 2011 @ 9:21 am

Go Giants!

Most disturbing thing about votes like this Twitter thing is that they're going down 11-0. Taxes that should have gone into the general fund to pay for health care and parks and streets now go into the pockets of developers and for-profit businesses who'll move in a heartbeat if they find another town whose politicians will sell out their electorate even more than Kim and Chiu will sell out San Franciscans.

Interesting attack on Guardian in morning Beyond Chron. Number one poverty pimp in town (Randy Shaw) singing the praises of yet another of Willie Brown's clients. Keep in mind that Shaw has had his snout of the behind of every SF mayor for the past 30 years. To say they take care of their boy Randy is putting it mildly. Before Newsom left he made certain to give Shaw an 82 million dollar contract that covers 4 years. It was the first time the THC contract was for longer than a year. Why? Because Shaw feared that a genuinely Progressive mayor might be elected and they just might scrutinize him a bit more. It's noteworthy that the cops and firefighters unions did the same thing. How's Shaw pay back Gavin and Willie and their friends? Read the morning edition of Beyond Chron.

Also, when Shaw attacks the Guardian or, say, Debra Walker, you're paying for it. Oh yeah, Beyond Chron is listed as a non-profit and thus is paid for with THC money which comes from ... you. That's not only sleazy, it's illegal. Laws covering electioneering by non-profits clearly state that they cannot favor a specific candidate or group of candidates yet Shaw sponsored forums (with Kim as their star) that regularly excluded poorer candidates (of which I was one).

I'd say that Shaw needs to change the name of his rag.

Instead of 'Beyond' Chron, it should be called, 'Mini' Chron.

Greed. Threats. Scandal. Dishonesty.

Only a political dung beetle like me could see gold in this environment.

Did I say, Go Giants!

Oh yeah, I did.

h.

Posted by Guest h. brown on Feb. 11, 2011 @ 8:31 am

One more thing,

Daly's Dive tonight 8pm'ish. If you want to argue or kiss ass or just watch, this be the place. I've slotted my posse for every Friday. You'll like my friends. And, if you don't? You just go to ....

h.

Posted by Guest h. brown on Feb. 11, 2011 @ 8:52 am

You've never been the factor you thought you were. But when enough elements came together for you (obnoxious dot com noobs, rents/real estate prices skyrocketing 50%/year, George W Bush as president, a wealthy Pac Hts socialite in line for Mayor) you kind of had a role as the counter culture voice.

Now you just whine and lose - always with that ironically pretentious tone to it.

None of your candidates win. You seem to have a knack for taking the wrong side of every local issue (example - Pension Reform/Prop B was the one thing you aligned with Newsom/Democratic Machine on... wow). You're doing a bang up job of alienating the Asian-American contingent from your scene. And finally, this oddball rant against a mere attempt at mid-Market revitalization, where you can't get even a single Supe to take your position??? Not even Avalos is throwing you guys a bone here.

At this point, your paper is basically a printed version of the circular rants that take place in Daly's Dive. Have fun with that, just understand nobody outside your small club cares.

Posted by Guest on Feb. 11, 2011 @ 10:30 am

You cared enough to read my long post and write a long comment. Thanks for your support.

Posted by steven on Feb. 11, 2011 @ 11:01 am

You could have done anything with the time you spent writing and posting this.
You could have made something good to eat and enjoyed it, or called a friend, or gone outside and felt the sunshine.
But instead you took time from your life for this.
Either the Guardian is VERY relevant (to you), or your life is just that meaningless and your time is so undervalued (by you) that you wasted it telling them something they must surely already know.

Posted by Guest on Feb. 11, 2011 @ 11:43 am

"caring", then yeah...

But whatever makes you feel better. Have fun in irrelevance.

Posted by Guest on Feb. 11, 2011 @ 11:21 am

Twitter's a slut,

Just like Bank of America. They shake their metaphorical ass on SF corners looking for the best deal ('Hello, Leland, been on Capp Street lately?) and then run away with the next guy with a bigger, uh, limo ...

This morning's Examiner (Page 12) has an AP story following up on a rumor that Twitter is entertaining offers from Google and Facebook that involve more cocaine and ecstasy and cheaper rent from other plantation owners.

Screw em! Let's see the Mart turned into a school of ... ? ... music, cooking, art, disaster masters?

SF has over 100,000 students and if we had 200,000 we wouldn't have to lube up and bend over for Ellison and his ilk ...

Face it SF, if you want a sustainable economy you don't plant your pillars in things like office space and tourism. One car bomb wrecks your economy. Or, one better 'ho' with bigger boobs for Silicon whoremongers.

h.

Posted by Guest h. brown on Feb. 11, 2011 @ 11:50 am

SF Mart ha ha ha. First class project from a first class developer. We can all feel good about this one.

Posted by Guest on Feb. 12, 2011 @ 11:04 pm

Notice in this article that Jane claims she "has very little contact with Willie Brown." Ahem. This assertion is pure garbage. As recently as the months leading up to the November election, Jane was meeting with Willie Brown frequently -- roughly once a week -- to get tips and pointers. Willie knew it would be worth his while to cultivate her. Like David Chiu (who Rose Pak went to work on), Jane has that combination of vanity, insecurity, and ambition that makes her easily manipulable by the likes of a wily ol' puppeteer like Willie Brown. Willie's done this many, many time before -- seized upon an attractive face, even better -- an attractive face of color -- to move his agenda along. It's is an old story with him. What's particularly troublesome is that unlike most of the people Willie has done this with, Jane does have a brain. So it's troubling that the flattery Willie lavished (and continues to lavish) upon her has blinded her to the ethical pitfalls that she should realize go hand in hand with getting involved with him in this manner. Or perhaps she has decided that we were all wrong about Willie's corruption. Or maybe she has convinced herself that Willie is never going to ask or subtly influence her to do something not-so-commendable. Most likely, it's some sort of combination of conscious and subconscious self-delusion.

The length of the period of time in which Chiu and Kim have been involved in SF politics if pretty short. It basically does not precede Gavin Newsom's mayorship. And apparently, since they didn't personally experience what life in SF under the Willie Brown administration was like for anyone who was not a Willie Brown loyalist and/or generous campaign donor, they can't seem to grasp that the problem was a huge one, that the level of his corruption was overwhelming (indeed these are the things that paved the way for the progressive sweep of the board in 2000) and that this is not a politician you want to (figuratively) jump in bed with nor regard as your "political mentor." Which, I'm afraid, is how Jane refers to Willie in private circles. Yech.

The other thing that I had to come to accept about Jane, in watching her deal with issues as a school board member, is that lies slip from her lips with alarming effortlessness. This tends to happen when honesty would put her in a position where she would be openly attacked or criticized.

Posted by Guest on Feb. 14, 2011 @ 4:46 pm

". As recently as the months leading up to the November election, Jane was meeting with Willie Brown frequently -- roughly once a week -- to get tips and pointers."

Do you have any evidence to back that up?

Posted by Guest on Feb. 14, 2011 @ 4:59 pm

Didn't SFBG recently run a picture of Kim and Brown sitting at the same banquet table...??

Posted by Flowers on Feb. 14, 2011 @ 5:27 pm

But sitting at a banquet table does not equal weekly strategy meetings. If someone is alleging that close of ties, they should be able to back it up.

Posted by Guest on Feb. 14, 2011 @ 5:47 pm

It wasn't just Willie Brown the Jane Kim was sitting with at the head table of her inauguration banquet celebration. It was Brown, David Chiu, Newsom mastermind Steve Kawa, and most notably, then Police Chief, and still right reactionary pro sit-lie, George Gascon, the day -before- he was appointed as DA by Newsom. (Apparently everyone sitting at that table knew all about Gascon's appointment.) And though Rose Pak wasn't at the table, she was in the room. To see the photo (which was taken by Luke Thomas for Fog City News) go to: http://our-city.org/resources/Kim_Banquet.jpg

Posted by Eric Brooks on Feb. 14, 2011 @ 8:17 pm

Math and logic,

Willie gives Jane $5,000. She's elected. Less than a month passes. Willie's former Chief of Staff, Eleanor Johns' (currently the Executive Director of the Willie L. Brown Jr. Institute - read, 'bag lady') ... Eleanor's hubby wants to get on a City commission. He's not qualified. Jane Kim casts the deciding vote at the Full Board to put the unqualified, Richard John on the body (Historical Preservation Commission).

Coincidence?

I think not.

Go Giants!

h.

Posted by Guest h. brown on Feb. 14, 2011 @ 5:51 pm

Well, apparently Jane doesn't consider it incendiary among those she considers loyal and supportive of her.

Re: meeting with Willie weekly for tips and pointers; Willie = "political mentor."

This information came directly from the mouth of Jane Kim herself. She has been open about it in private conversations with folks whom she thinks will not judge her critically upon hearing it. That is why it is foolish on her part to offer up a complete denial when confronted by those whom she is certain would find the info appalling, i.e., SFBG reporter and editorial staff and many of the paper's readers. It also is indicative of her naivete. This is a small town. The circle of the politically active in the city is even smaller. This stuff gets around. Given that, it's not a good idea to go for a blatant denial.

This is not the first time that "mug wumping" -- i.e., having your mug on one side of the fence while your wumpus is on the other -- (or if you will, saying one thing to one group of people and a completely different thing to another) -- has bitten her in the ass. If she wants to work both sides of the fence, she needs to wise up about how to do it in a way that doesn't risk destruction of her credibility.

For example, it would have been smarter to say something along the lines of..."Willie Brown sought me out and offered encouragement in my campaign efforts. I believe this is solely because he recognized that I could offer a fresh, unique perspective and approach. I am keenly aware of the problems that stemmed from his administration and would never lose sight of that, but I have found that sitting down with and hearing from people with other points of view, especially from those who've been around for as long as Willie Brown, can be a useful and at times instructive practice. That said, he has never tried to influence my vote on an issue, and I never would allow him to do so."

The fact that she isn't able to say something like that could indicate that she feels some level of guilt or conflict about her relationship with Willie -- which would be more likely if she really is letting him influence her in significant ways. Being as young and "green" (haha) as she is, she probably hasn't developed the level of compartmentalization that more experienced politicians have developed.

Matt Gonzalez has seen fit to meet with Willie and hear what he has to say, here and there over the years, and he never denied it. Though clearly, there's going to be a different sort of dynamic going on when Willie's dealing with someone who exudes the level of independence, resolve about his own set of political beliefs and ideology, and resistance to Willie-meddling that Matt naturally gives off. Part of Willie's brilliance is his ability to read people and, should he discern some value in the effort for himself, figuring out how best to handle them (again, always with an eye on his own interests). If he knows the chance of deriving some value for himself from engaging with the person or interest is low, he's simply dismissive. i.e, "I don't want to talk to the Bay Guardian ever in my life. Goodbye." That's very similar to what he had to say back in the late 1990s when the BG was regularly giving over large numbers of pages to coverage of Willie corruption and scandals: He said something along the lines of, "There's absolutely nothing in that paper worth reading." The BG even used the quote in advertising the paper. Classic Willie.

Posted by Guest on Feb. 15, 2011 @ 4:00 pm