Behind the Twitter tax break deal

T stands for Twitter, or the taxes it doesn't want to pay

There's much political intrigue and anticipation swirling around the Central Market Payroll Tax Exclusion, aka the Twitter Tax Break, which the Board of Supervisors will consider next month. This has all the elements of a great story: backroom deals between political and corporate power brokers, the strange argument that Republican-style tax cuts will cure Mid-Market blight, the fact that Twitter executives have uttered nary a tweet about shaking down SF taxpayers, and the role that a pair of supposedly progressive supervisors have played in brokering the deal.

Following up on my Feb. 10 post about how the deal would help Twitter meet the high asking price of politically connected landlord Alvin Dworman for a new mid-Market headquarters, the Bay Citizen yesterday had a great story showing how Dworman gave then-Mayor Gavin Newsom discounted office space for his lieutenant governor bid just as Newsom proposed the tax break that would benefit Dworman and Twitter. The story also includes a nice tick-tock about how this unseemly deal unfolded.

We at the Guardian are currently awaiting a big package of documents from City Hall that we requested on the deal, and sources tell us they're likely to include some interesting insights and tidbits. For example, are Twitter and Dworman the main beneficiaries of this legislation or are there other corporations (and the politicians they support) who were pushing this plan? Everyone is also waiting to see how the city's Office of Economic Analysis rates the proposal, and Economic Ted Egan tells us that report should be out by the end of next week or beginning of the following week.

At this point, we have more questions than answers, but that should start changing by next week. Maybe we'll gain a better understanding of why Sup. Jane Kim is pushing this deal (much to the consternation of some of her former top supporters) or why Randy Shaw, the taxpayer-subsidized blogger and Tenderloin don, strongly backed Kim's candidacy and attacked her critics with such perplexing ferocity. Will Willie Brown's name continue popping up? Perhaps we'll be able to determine whether the Newsom-Dworman pact actually broke campaign finance laws. And we'll certainly gain some insights into how the Mayor's Office of Economic and Workforce Development trades away taxpayer money to successful corporations that wield whines and threats of relocation.

If nothing else, we'll get a peek into modern crony capitalism, San Francisco-style, dressed up in the guise of “saving” the Tenderloin. So, from a strictly journalistic perspective, this should be fun.


No need to do all that research. Here's the scoop.

Sometimes it is worth foregoing a little tax revenue to entice a world-class business to seriously invest in being in the City.

Everyone does it. Every City, State and Country does it. Sometimes they're even given a name like, er Enterprise Zone.

It's a win-win for everyone. Except ageing, bitter liberals, I guess.

Posted by Wally on Feb. 23, 2011 @ 5:21 pm

why can't flush, up-and-coming companies like Twitter pay theirs? I don't fault Kim for trying to improve her district nearly as much as rich, powerful slugs who threaten to take away jobs if they aren't let off of paying their fair share. We nurture a company to success and as soon as they can get away with it, they screw us.

Posted by muttlock on Feb. 27, 2011 @ 2:17 am

It's like saying the bible is true because it says so in the bible.

You cite Daly's bizarre essay as an example of something? In all of that der sturmer ravings he made one valid point, about tech companies in house services, other than that, he could have been writing for the Georgia states rights magazine.

Why is it that the Guardian positions are always a sentence for the cities poor having to live amongst thuggery?

What is the Guardians long term plan for mid Market, instead of the miserable Rush Limbaugh like bitching and moaning and no wrong answer whining and crying, what is the Guardians plan for the area? Reading Daly's Ernst Röhm essay, he's happy to have it remain a mess and sentence the locals to dealing with thuggery everyday.

This reminds me of the Armory, the entitled bitched and moaned for decades and then Kink moves and you don't get anything. No sales tax, probably a pittance of a payroll tax, a few dozen people in the area instead of hundreds spending money, a few dozen jobs instead of hundreds, all because of the ideological purity of stunted college commies and neighborhood activists.

Posted by meatlock on Feb. 23, 2011 @ 8:10 pm

Thuggery I say!
Thuggery and entitled bitchings!
I dare say you would know plenty about recognizing the Limbaughesque. You know doubt gaze upon his countenance every single morning, staring back out at you from your own heaving. buttery jowls.

Posted by Guest on Feb. 23, 2011 @ 11:33 pm

When did The Guardian start practicing journalism? The articles are written and sourced to propagate one POV and one POV only. Heresy is punished with excommunication and if need be The Guardian "journalists" make facts up as they go.

This paper is more like an extended undergraduate school thesis than an actual agent of journalism.

Posted by Lucretia Snapples on Feb. 23, 2011 @ 8:50 pm

you spend every day reading it and bolstering the prices of ad space with your never ending online prattle.

And speaking of your endless prattle-
When are you going to take Tim up on his offer to debate?

Posted by Guest on Feb. 23, 2011 @ 11:38 pm

And Steven, right here and right now.

But since you're evidently incapable of reading correctly I'll reiterate what I told Tim this week. I am out of San Francisco until July, when I return. Perhaps I can take Tim up on his offer then. Until then we'll continue to debate in this forum, which is good as any other.

Posted by Lucretia Snapples on Feb. 24, 2011 @ 9:18 am

They invited you to debate on their radio show, which is primarily audio.
You could call in and give them what for!
Really roast those progressive pukes, and at the same time show the world how smart you are. You could educate the listeners and show them the error of their liberal ways.
If you absolutely must be in San Francisco in order to teach them a lesson, why not set the date?

The only logical explanation is that you and Meatloaf are afraid you can't hold your own in a conversation in real life. Preferring to make one sided, short caustic comments is pretty much your style and his.
Perhaps you've simply found your purpose in life, and this is it.

Posted by Corm on Feb. 24, 2011 @ 1:01 pm

Guess you'll just have to wait and see!

Posted by Lucretia Snapples on Feb. 24, 2011 @ 2:40 pm

You and Meatloaf are to frightened to engage in an actual debate.

Posted by Guest on Feb. 23, 2011 @ 11:40 pm

so your comment is a bit ironic

Posted by matlock on Feb. 24, 2011 @ 9:19 am

so your comment is a bit moronic.

Posted by Corm on Feb. 24, 2011 @ 10:41 am

You read my comments on why I wouldn't do it right, did you address them then?

I find it odd that people; go on Springer, like Mar get interviewed for the Daily show, call into right wing radio shows where they get hung up on and the right winger spends the rest of the hour ranting about the caller, etc... I find it odd people will subject themselves to these events and think they will look good in the end to the true believers like you.

Now respond to what I posted, ranting about me being a pussy is one of your options.

Posted by meatlock on Feb. 24, 2011 @ 11:21 am

"You read my comments on why I wouldn't do it right"
Sorry, no. I don't really pay that much attention to you.

"I find it odd people will subject themselves to these events and think they will look good in the end to the true believers like you."

Why do you care about my opinion of you?

Posted by Corm on Feb. 24, 2011 @ 12:47 pm

I thought you were going to come up with something that was clever.

Posted by meatlock on Feb. 24, 2011 @ 1:03 pm

The only logical explanation is that you are afraid you can't hold your own in a conversation in real life. Preferring to make one sided, short caustic comments is pretty much your style and Lucretia's.
Perhaps you've simply found your purpose in life, and this is it.

Posted by Guest on Feb. 24, 2011 @ 2:40 pm

after my post above.

Posted by meatlock on Feb. 24, 2011 @ 3:01 pm

Steve is aging, he's just stupid. Sorry let me clarify, he is highly intellectual, everyone else is stupid. :-)

Posted by Patrick Brown on Feb. 23, 2011 @ 8:58 pm

Did Twitter threaten to leave San Francisco unless granted a tax break, or did high ranking City officials do what comes instinctively when in the presence of ten figures to the left of the decimal point, which is throw money at them in the form of a tax break?

Poor cities use tax breaks to lure businesses. San Francisco is neither a poor city nor lacking businesses. There is not consensus that Market Street is blighted. Redevelopment gave Westfield $26m in tax breaks for the Emporium site, so by that measure anything and everything is blighted if another dollop of corporate welfare can be slathered out.

Was this tax break demanded or offered?


Posted by marcos on Feb. 23, 2011 @ 10:59 pm

Jane Kim told me that Twitter executives told her they would leave town unless they got a tax break, a claim that other city officials have also confirmed to me. That's why I've used the term "extortion" and "shake down" because those seem to be accurate labels for what happened. I've been asking Kim to months to come and meet with the Guardian editorial board to give us a better understanding of her thinking on this and other issues, and last night she informed me that she has decided to stop talking to the Guardian because she thinks we've been too hard on her.

Posted by steven on Feb. 24, 2011 @ 11:09 am

From Twitter blog, March 10, 2009:

"San Francisco Mayor Gavin Newsom visited our office this morning to have a tour and then talk with us a bit about how Twitter and the city could work together better. It was a great discussion and afterward we assured Mayor Newsom that as Twitter grows we'll continue to keep our headquarters here in San Francisco."

No mention of payroll tax exemption required for Twitter to stay in SF.

Posted by Luke Thomas on Feb. 24, 2011 @ 12:26 pm

She has no responsibility to talk to you or the editorial board of The Guardian. I bet she also wouldn't talk to FOX News and The Guardian is their equivalent on the left. Your mind is made up on the matter, as you've stated repeatedly, so why would she talk to The Guardian knowing you simply want to berate and engage in a debate with her?

Posted by Lucretia Snapples on Feb. 24, 2011 @ 1:10 pm

or "There is not consensus that Market Street is blighted"?

W-O-W. I suppose if you're including blind people - who also can't smell or hear - then maybe...

I honestly can't tell with you guys sometimes, do you simply refuse to acknowledge realities that are contradictory to your position, or are you actually just delusional? Marcos, I have seen you on here time and time again talking about how yor fellow progressives don't know how to win an election. You think maybe it's because you make statements like this?? Because that's insane.

Posted by Sambo on Feb. 24, 2011 @ 3:02 pm

For awhile I could only stare in awe at how much these buildings would crash in value if our tax dollars had not saved the billionaires and their crooked real estate industry.

I am past that now but sometime it comes back, like now.

Posted by Guest on Feb. 23, 2011 @ 11:10 pm

Don't really have a major problem with gripes about this deal - but is it really a big deal in the scheme of things? If this were a relatively generic non-tech company and not "Twitter"- would anyone care? It's insignificant relative to the size of the City's structural deficit which is far greater than $400 milion...

Doesn't the CIty cut deals like this the all the time- I gather Sales Force rec'd some form of incentive. As much as the SF Giants like to extol their "privately financed stadium," the City spent about $25 million in the construction of AT&T park...

Posted by Flowers on Feb. 24, 2011 @ 11:36 am

Yes, Flowers, there are deals like this all the time. Most of them are bad for the city. Very few wind up creating any jobs. That's why I think this is pretty stupid.

Posted by tim on Feb. 24, 2011 @ 3:02 pm

The real reason the Guardian keeps at this is because Kim beat the candidate they were pushing for office for the last, i don't know, 10 years. They've never gotten over it.

What to do about mid-market which will be at 50% vacancy by early next year - the highest in the city?

Redevelopment? No thanks. Residents opposed it before, will oppose it again. Plus it's a greater corporate giveaway than anything in this tax break deal. Does the Guardian tell you that Chris Daly cut the Rincon Hill and Intercontinental deals - far greater corporate giveaways than this mid-market tax break deal?
Nope of course not. Doesn't fit into their preconstructed narrative

You can say the city shouldn't give tax incentives to lure businesses to an area or keep them in the city. I will disagree with you on that issue but it is a fair point. The rest is window dressing and people should see it for what it is.

Remember the white out cover on the Guardian's endorsement edition? That's their vision for the city which voters soundly rejected.

Posted by Atwitter about Twitter on Feb. 24, 2011 @ 3:40 pm

We just deal in the facts and we don't hold grudges. Daly's Rincon Hill deal is the exact opposite of what you describe: he got a larger than required community benefits contribution from the developer in exchange for supporting the project. If anything, Daly was extorting a corporation on behalf of the public, the opposite of Twitter's scam.

Posted by Guest Steven T. Jones on Feb. 24, 2011 @ 7:48 pm

Government to "extort a corporation"?

Your choice of words is very telling.

Frankly, a strategic inducement seems a lot more ethical to me than strongarm tactics and threats.

Posted by Wally on Feb. 24, 2011 @ 8:19 pm

With rhetoric like that it's simply astonishing that Jane Kim refuses to meet with you.

Posted by Lucretia Snapples on Feb. 24, 2011 @ 9:15 pm

Where has all the money gone? (sung to the tune of Where have all the Flowers gone?):

Posted by Guest daniele erville on Feb. 25, 2011 @ 9:48 am

I am one of Jane Kim's progressive supporters who couldn't care less about the Twitter deal. I love how the mainly white, childless (?)males love to bash her because of their so-called "progressive values." Where is your outrage when a young, usually, male of color is murdered? Last night at 17th and Mission a young Latino, my son's age, was shot to death! That to me is a problem. Daly may be a father but has shown NO, AND I MEAN NONE, concern for young males of color dying in an unacceptable epidemic of homicides. As many homicide victims that were killed in his district, you think he'd give a damn, but he doesn't! Daly will not have my vote for Mayor under any circumstances. When white males bash women of color, they are racists as far as I am concerned and will never have my support!
I do think Twitter should be ashamed of themselves! With the billions they are estimated to be worth and they're bitching over paying a couple of million in taxes, they're jerks, but I am tired of looking at vacant buildings on mid-Market. I believe that jobs will be created, and I think women like Jane, will, unlike men, find creative ways to show Twitter that they owe it to the citizens of San Francisco to contribute to the City without using the "t" word. Women can get so much more done than aggressive and ego-driven males when we put our minds to it! Not that all women are heroines to me, but the majority of them are far more effective than the men who have been running the show.
I agree with Michael Bernick that the Twitter deal can be beneficial, and no one on the left has made a case for why we are better off without Twitter in San Francisco.
I don't blame Jane for not wanting to talk to the SFBG, your perspective on her is pathetic and I frankly have lost all respect for the Guardian and its staff.
I am looking for Jane to fight for our youth so the senseless homicides will be virtually eliminated.

Posted by Tami on Feb. 26, 2011 @ 9:39 pm

Tami, you have no evidence that Twitter demanded the tax deal as a condition of remaining in San Francisco. We do know that Newsom had a connection with the landlord of the Merchandise Mart, and we do know that Newsom's first inclination is to throw public money at billionaires whenever he sees them.

We do know that the District Six supervisor is accepting the booster framing of Mid Market as blighted from 5th to Van Ness instead of reframing the issue in terms favorable to her constituents of SOMA and the Tenderloin.


Posted by marcos on Feb. 27, 2011 @ 9:11 am

Pretty good rant and yes, the SFBG is pretty lost these days but your white male rage is misguided.

Posted by Guest on Feb. 26, 2011 @ 11:39 pm

I hope, Tami, that you're correct that Jane will respond to the epidemic of violence taking the lives of young men of color, particularly this young Latino male murdered on Sixteenth and Mission Street; and the young Latino male stabbed at Seventeeth Street and Mission Street this weekend.

An honorary altar has already been set up on the sidewalk by grieving folks in the neighborhood as I stopped by tonight to pay my respects to the deceased, to the wounded, and to a struggling North Mission community. Will Jane pay homage, and has she visited the altar, and will Jane call for a joint community gathering with nonprofits, churches and residents - (not the police, for once) to discuss the root causes of social violence taking the lives of young men of color in the North Mission and throughout District 6?

Your points, however, on former Supervisor Daly's lack of response to the murders of young men of color in the District 6 during his tenure, certainly have substantial merit. So far in the Tenderloin, three young African American males have been violently killed as well this year.

As a matter of fact, on New Year's Day, District 6 was the location of this city's first homicides for 2011. I anticipate, tragically, that this epidemic will worsen, given the state of the city's economy and the social exclusion of young people of color that live in the other San Francisco. When young people of color tell the press that violence on the 14 Mission line is a daily occurrence, its' time to speak more truth to power. Thanks for your passionate advocacy.

Posted by Richard Marquez on Feb. 27, 2011 @ 1:08 am

Read California Budget Project's "California's Enterprise Zone Program: No Bang for the Buck" at and the California Legislative Analyst Office's "California's Enterprise Zones" at to find out about why enterprise zones are being eliminated in California. They're too expensive, they don't create jobs, they reward job turnover instead of job creation, they don't have an impact on unemployment or poverty. If we want to fight blight, we should support programs that directly address poverty and joblessness, not tax breaks like the one being discussed for Twitter.

Posted by Guest on Mar. 08, 2011 @ 7:51 pm