Why does a "burgeoning" neighborhood need tax breaks?

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The huge tax exclusion zone includes dozens of commercial property owners added with little public process or explanation.

The San Francisco Chronicle has run two stories in the last two days about the huge influx of new arts-related businesses coming to the supposedly “blighted” mid-Market area, some of them drawn by a 10,000-square-foot space the city's Film Commission opened as an incubator for independent filmmakers (the Examiner had the story last week). Yet city officials and the daily newspapers are still pushing a $22 million tax exclusion zone for the area, which will be considered by the Board of Supervisors tomorrow (Tues/5), using discredited arguments that nothing will locate here without big tax breaks.

“The incubator project will benefit both the San Francisco film community and the evergrowing Mid-Market Arts District,” Mayor Lee said today in a Mayor's Office press release. “Establishing programs such as this helps ensure the health of the Mid-Market area as it continues to grow and become a burgeoning arts community.”

“Listen to the recent City Hall political debates, and you'd think the beleaguered Mid-Market neighborhood was on the verge of becoming the next Silicon Valley with Twitter at its core,” was the lede in a front-page story in today's Chron listing at least seven major arts-related businesses that are moving to mid-Market, drawn by the cheap rent, large buildings, and artistic synergy and not the tax breaks.

At least three supervisors are also working on legislation to excuse tech companies from paying payroll taxes on stock options, which City Economist Ted Egan said was the main reason to believe Twitter would follow through on threats to leave town if it doesn't get a tax break. And Guardian investigations have revealed the lies and corruption behind how the tax exclusion zone was created.

Yet rather than prompting a reconsideration or scaling back of a tax giveaway that even Egan -- a fairly conservative, free-market kinda guy – says doesn't make sense for most of the properties that have been thrown into this tax exclusion zone, Sups. Mark Farrell, Carmen Chu, Malia Cohen, and Scott Wiener have recently joined the original sponsors, Sups. David Chiu and Jane Kim, as co-sponsors, giving them the six votes they need.

Let's be clear: This isn't about helping mid-Market and the Tenderloin. Hell, with all the business interest that is already occurring there naturally, the likelihood that this tax break will raise rents and force out low-income residents, small businesses, and non-profits is now greater than ever. But then again, this was always about helping landlords and doing a big political favor for the rich in an election year more than it was about any of the platitudes that have dripped from the lips of these craven political animals.

Old-school land-use power politics is back at City Hall, sold to the rest of us with the false promise of helping the poor. I guess some things never change.

Comments

"the likelihood that this tax break will raise rents and force out low-income residents, small businesses, and non-profits is now greater than ever"

Best news I've heard all day

Posted by Guest on Apr. 04, 2011 @ 6:26 pm

another con-troll emerges from his hovel...

Posted by Guest on Apr. 05, 2011 @ 4:49 pm

City Tax Battle Isn’t About a Two-Year Break. It’s About Repealing the Payroll Tax Completely

http://techcrunch.com/2011/03/29/city-tax-battle-isnt-about-a-two-year-b...

"...As this issue gets bigger, it could be about even more than saving jobs. It could be about changing the political makeup of the city."

Posted by Guest on Apr. 04, 2011 @ 7:32 pm

It's an anachronism. It hurts the city's reputation and it's not at all efficient.

Get rid of it. Replace it with a gross receipts tax or something along those lines.

Posted by Lucretia Snapples on Apr. 04, 2011 @ 7:56 pm

San Francisco a commuter workforce of 4-500,000, the daytime population is >1.2m.

Most of these jobs don't pay payroll tax. Many of the jobs that are here are not suited for many SF residents.

The term "job creation" was popularized by the right wing in order to buy working people into subsidizing corporate welfare, as if the generic fact of a job being created was in the best interests of most working taxpayers.

In San Francisco, there is no guarantee that if a job is created that job will employ a San Franciscan. We need to be focusing on economic development where the jobs that are created are from companies that contribute taxes and employ locals.

Anything else is blowing economic smoke up our class' ass.

-marc

Posted by marcos on Apr. 04, 2011 @ 8:01 pm

"In San Francisco, there is no guarantee that if a job is created that job will employ a San Franciscan"

And housing which is created is not guaranteed to go to a San Franciscan and hospitals which are rebuilt are not guaranteed to service San Franciscans.

Can we get a little more provincial while we are at it? Maybe we can poll people to see if they know where the sutro baths where, or if they like "its it"
I seem to recall that Marc Salomon occupied the dreaded non San Franciscan status for a few years before moving back to specialtown. So special that we only care about helping others who are of the true and divine San Francisco faith.

All this obsessive naval gazing is ridiculous. Our class' ass - give me a break.
I thought Che was dead.

I would like to see statistics that show most jobs in SF dont pay a payroll tax.
I'd also like to know by what criteria is Marc judging these jobs as "not suited" for many SF residents?

If not, then its all really just one obsessive blow hard mentally masturbating all over the comments section of the BG.

Posted by Guest on Apr. 04, 2011 @ 8:27 pm

Is this an endorsement of moving from payroll to gross receipts?

Posted by Librul on Apr. 04, 2011 @ 9:02 pm

Only 10 percent of SF businesses pay the payroll tax, a fact that came out of the Controller's Office during Chiu's aborted business tax reform effort last year: http://www.sfbg.com/politics/2010/07/08/sf-business-community-just-oppos...

Posted by steven on Apr. 04, 2011 @ 9:19 pm

Steve, are there any studies at the Controller's office that show the number of commuter workers and the number of under or unemployed San Franciscans?

Why San Franciscans should take on more jobs for commuters that do not pay the business tax while our own people are going without work is a mystery to me.

Perhaps the right wing, like the left, has its acolytes who believe that there is a great scoreboard in the sky, and when you die, your goodness is evaluated by God based on how many jobs one creates as racked up on the great Right Wing Scoreboard.

-marc

Posted by marcos on Apr. 04, 2011 @ 11:16 pm
God

If there really is a God, I'm hoping that she rewards those who fight the power on behalf of the people because it sure ain't paying off here on Earth.

Posted by steven on Apr. 05, 2011 @ 10:18 am

The thing I like the most is that the trolls think that we are all "crazy" for challenging their Reagan Youth dogma, yet they insist upon posting here as if a forum run by and for crazies was worth their time.

-marc

Posted by marcos on Apr. 05, 2011 @ 11:08 am

Guest writes:

"If not, then its all really just one obsessive blow hard mentally masturbating all over the comments section of the BG."

It's the scourge of chatboards everywhere when there is no option to "ignore" the crazies. Life is too short to listen to anything the obsessives have to say since it's just obsessiveness acting out, and nothing of substance behind it.

One important life skill is figuring out who the real crazies are - and I'm one of them, believe me - and staying as far away from them as possible. Nothing good will EVER come out of the interaction, no matter how good and honorable your intentions.

Posted by Guest on Apr. 05, 2011 @ 10:45 am

Some sort of liberal class thing, these jobs are beneath SF residents? "These people are doing jobs that only Community College grads will do?" The U's producing too many studies of studies graduates and there just isn't enough opportunity for them in SF?

Posted by matlock on Apr. 04, 2011 @ 11:20 pm

Don't know the details on why there is a mismatch, but if there are many more jobs in SF than residents, and if unemployment amongst residents is high, then there is a mismatch and public jobs policy should deal with that.

Blindly being 'pro-jobs' when those jobs are with firms that do not pay business tax and those jobs do not help San Francisco employ our unemployed is yet another bad business deal for San Francisco taxpayers.

-marc

Posted by marcos on Apr. 05, 2011 @ 6:57 am

Marcos writes: "San Francisco a commuter workforce of 4-500,000, the daytime population is >1.2m. Most of these jobs don't pay payroll tax."

Marcos' ignorance about basic city issues has boggled my mind for the past few months I've tried to read his posts (some of which are barely coherent), but what's even more baffling is why he'd continue to post such innaccurate mindless drivel, day after day, after after hour?

I've met a few people in my 28 years of life who's sense of reality was challenged, but no one who had this irrational compulsion to write dozens upon dozens of posts a day about subjects they know nothing about. It's like he doesn't even realize that he doesn't know that much about subjects he continues to preach about, so of course he can't keep an open mind to actually try to learn something new or different from his skewed sense of reality.

Transportation expert?
Police Commission expert?
Land use expert?
Housing expert?
Tax expert?

How can someone even study politics, much less try to participate in the political arena, if they have so little self-awareness that they don't realize how easy it is to come across as a buffoon by opining so strongly about so many varied topics?

So many ignorant statements is not healthy for a public forum and it's actually not very healthy for obsessive posters when they ever realize what a false sense of reality thye've been living. Watch out for that.

In the meantime, anyone who thinks Marcos' statement about the payroll tax posted at the top is anywhere close to true, you would be incorrect. The information about how the city's payroll tax works is out there if you're interested. But be sure to note how many inaccurate opinions you find on this chatboard. Apparently The Guardian management is more than happpy to provide a sandbox for the obsessive posters who just need to jabber anything, everything, even when it's totally incorrect.

Posted by Guest on Apr. 05, 2011 @ 10:36 am

And BTW, there are several other blogs he posts to with the same manaical frequency and lack of credibility.

Posted by TheDoc on Apr. 05, 2011 @ 10:43 am

You would not contest my posts, quack, if I were not a viable threat to your neoliberal propaganda.

-marc

Posted by marcos on Apr. 05, 2011 @ 11:07 am

He said while rubbing his hands together and chuckling darkly to himself. I'll get you yet!

Posted by Bob on Apr. 05, 2011 @ 11:21 am

I mean, aside from making 6-8 long posts here daily, developing PERL scripts to mock Arthur (when it really just made you look likea gigantic tool with wayyyy too much time on your hands), and showing up to community meetings with printouts of other people's backyards and rooftops.

Dude, you're a total creepshow, lol.

Posted by Sambo on Apr. 05, 2011 @ 11:30 am

For now, I'm actually working on a contract, pulling down decent coinage given the general decline in wages after 30 years of neoliberal economics.

I type at you all when I'm compiling or running a test.

-marc

Posted by marcos on Apr. 05, 2011 @ 11:34 am

Despite the constant, endless ramblings about the evils of greed, capitalism, neoliberal economic policy, etc...

You STILL consistently douche out with the "and just btw, I make solid money and own a nice place here and was really smart with my financing - so I'm all good..."

Such - a - farking - TOOL, lol. And your total inability to recoginize that you drop the same tacky lines as you'll here at the local Marina bar just takes it to the next level of lame.

Posted by Sambo on Apr. 05, 2011 @ 11:59 am

You see moving here with $2000 in my pocket 22 years ago, San Francisco was a place where many of us were able to move, to contribute and after a few decades of hard work and a lotta luck, to achieve a toehold in economic stability.

I make solid money for now, but that was after two years of solid unemployment. Who knows what the future will hold?

Neoliberals like yourself are doing everything you can to make it so that you need family money and a sterling education to have a hope of making it in San Francisco.

-marc

Posted by Guest on Apr. 05, 2011 @ 12:28 pm

Point of clarification:
Did you not leave San Francisco for several years? Because with this preceding post it seems like you have been here for 22 years.

Posted by Bob on Apr. 05, 2011 @ 12:55 pm

22 years this October 6th, 11 days before Loma Prieta.

Funny how you all are so much more concerned about me than about my substantive demolition of the issues you champion.

-marc

Posted by Guest on Apr. 05, 2011 @ 1:08 pm

And seriously, I've been programming perl since 1993, I practically write this shit in my sleep.

-marc

Posted by marcos on Apr. 05, 2011 @ 11:36 am

Something else most San Franciscans don't have: home equity

Posted by Guest on Apr. 04, 2011 @ 9:12 pm

"Let's be clear: This isn't about helping mid-Market and the Tenderloin... this was always about helping landlords and doing a big political favor for the rich in an election year more than it was about any of the platitudes that have dripped from the lips of these craven political animals."

This is just false, bordering on tinfoil-hat crazy. This legislation has always been about 1) helping the neighborhood and 2) keeping twitter so that we can try to save the high-tech business cluster that we have in SF, and growing our City's general fund in the process. You do care about the general fund, right? Your half-baked theories don't change the fact that the people who came up with this legislation are motivated by helping low-income people and increasing City revenues.

"Hell, with all the business interest that is already occurring there naturally, the likelihood that this tax break will raise rents and force out low-income residents, small businesses, and non-profits is now greater than ever."

Any objective analysis of the neighborhood -- and the policies and zoning etc that govern development and tenancy in the neighborhood -- would find that the likelihood of gentrification occurring in the Central Market & Tenderloin neighborhoods anytime soon is slim to none, whether you're talking about residential or commercial space. Even if the risk of gentrification did exist (which it doesn't... at least, not anytime soon), the way to fight it would be to preserve and expand affordable housing. Instead you're arguing against a central economic development tool that will help revitalize the neighborhood.

It's sad that the 'wedge issue' that is the first big fight of the new BOS is causing 'progressives' to line up against a policy that is genuinely progressive in that it has real potential to improve quality of life for people who are currently living in the City's least livable neighborhoods.

Posted by Guest on Apr. 04, 2011 @ 10:21 pm

Even Ted Egan says that the ongoing payroll aspect of the tax deal is negligible in economic outcome, that the "special event" stock options part of the tax break is the game changer.

There is no objective economic argument that a payroll tax holiday for the TL would deliver any net benefit to the neighborhood, and there is significant evidence that placing 2000 more highly paid Twitterati at 10th and Mission will gentrify Western SOMA and displace long term residents there, many of them queer.

What's tin foil hat crazy around here is doubling down on the supply side economic stupidity that cratered the economy and ignoring what happens when thousands of workers earning 3-5 times the median income of a neighborhood are plopped down on its margins.

-marc

Posted by marcos on Apr. 05, 2011 @ 7:43 am

Did you say some of them might be queer? Oh boy. Are they San Franciscan queers or are they transplants? I know these things are very important!

The SF mart is basically empty at this point. Restaurants which have taken a risk and opened in the area are complaining that the "gentrification" isn't coming soon enough. You're honestly telling me that throwing profitable companies into the space - and surrounding spaces is going to do nothing to benefit the neighborhood?

I wonder if someone who owns a home in the mission is earning more than the median income of the neighborhood.

Posted by Bob on Apr. 05, 2011 @ 8:27 am

My concern is not so much with the restaurants that opened up on Mid-Market, I care more about the residents of Western SOMA which had a median income of $34,000 as measured by the 2000 census.

If the choice is between providing a captive lunchtime audience of 2000 for a restaurant or keeping the 3000 Western SOMA residents stable in their homes, in our community, then that is a no-brainer.

-marc

Posted by marcos on Apr. 05, 2011 @ 10:57 am

"Let's be clear: This isn't about helping mid-Market and the Tenderloin... this was always about helping landlords and doing a big political favor for the rich in an election year more than it was about any of the platitudes that have dripped from the lips of these craven political animals."

This is just false, bordering on tinfoil-hat crazy. This legislation has always been about 1) helping the neighborhood and 2) keeping twitter so that we can try to save the high-tech business cluster that we have in SF, and growing our City's general fund in the process. You do care about the general fund, right? Your half-baked theories don't change the fact that the people who came up with this legislation are motivated by helping low-income people and increasing City revenues.

"Hell, with all the business interest that is already occurring there naturally, the likelihood that this tax break will raise rents and force out low-income residents, small businesses, and non-profits is now greater than ever."

Any objective analysis of the neighborhood -- and the policies and zoning etc that govern development and tenancy in the neighborhood -- would find that the likelihood of gentrification occurring in the Central Market & Tenderloin neighborhoods anytime soon is slim to none, whether you're talking about residential or commercial space. Even if the risk of gentrification did exist (which it doesn't... at least, not anytime soon), the way to fight it would be to preserve and expand affordable housing. Instead you're arguing against a central economic development tool that will help revitalize the neighborhood.

It's sad that the 'wedge issue' that is the first big fight of the new BOS is causing 'progressives' to line up against a policy that is genuinely progressive in that it has real potential to improve quality of life for people who are currently living in the City's least livable neighborhoods.

Posted by Guest on Apr. 04, 2011 @ 10:23 pm

Again, to echo Marc's answer the first time you posted this, Egan said clearly during the hearings that this would have no discernible economic benefits for all the properties except Twitter's, and that if Twitter really grows and attracts other businesses as much as promoters of this legislation believe, that will increase commercial rents in the area.

It is you, Guest, and the promoters of this legislation that continue to make wishful or demonstrably false statements about what this legislation will do. If the backers of this legislation really did care of poor people and the general fund, they would limit its scope to just SF Mart (where Twitter is moving) and maybe one or two more big commercial properties on Market. In principle, I still might not like it, but I wouldn't be railing on about it being a corrupt giveaway to property owners and private power brokers in an election year.

Posted by steven on Apr. 05, 2011 @ 10:29 am

Job loss?

The drum beats against any payroll tax are growing louder. The Chamber of Commerce has called for its abolition. That would cost the City around 350 million a year. When I pushed to eliminate Willie's 600 'Special Assistants' (Peskin and Leno made them all permanent) I was told that the savings would be 50-60 million a year.

So, I'm guessing that it would take the jobs of between 4,000 to 5,000 City employees to balance the books against the lost payroll tax.

Go Giants!

h.

Posted by Guest h. brown on Apr. 05, 2011 @ 9:12 am

Remember? The ones you called "the most arrogant people on earth" who "have been murdering their political opponents for thousands of years now"?

Clearly THEY'RE behind it all!

Posted by Lucretia Snapples on Apr. 05, 2011 @ 10:52 am

'Lucretia',

I don't vote for Republicans and I don't feed internet trolls. Use your legal name and we'll talk. Otherwise, you're just another anonymous coward.

Go Giants!

h.

Posted by Guest h. brown on Apr. 05, 2011 @ 11:31 am

You're on the record buddy. See - that's the thing about the Internet - nothing you write ever really goes away entirely.

Clearly H, as you have stated, this is all a plot by the Jews.

Posted by Lucretia Snapples on Apr. 05, 2011 @ 12:01 pm

If Supervisors Kim and Chiu knew anything at all about city planning, they would know that the best way to revitalize Mid-Market is to add high-density middle-class housing with entrances onto Market Street. Now where are all of these new Twitter employees going to live?

I guess they don't teach lawyers about city planning in law school.

Posted by Guest on Apr. 06, 2011 @ 6:21 pm

Yeah, because the residential Fox Plaza and that new condo structure across Polk from it has worked to create a real "vibrant" community in the wind tunnel.

People can't stand to be on that stretch of Market because they can't stand.

And the last thing that Mid Market needs is for the Planners at the Planning Department to be given free rein to do what their developer masters tell them to.

-marc

Posted by marcos on Apr. 06, 2011 @ 7:31 pm

Wind problems around Fox Plaza are caused by poor architectural design, not by the fact that Fox Plaza is a high-rise.
High-density residential doesn't have to be 30 stories. It could be five.
Generally, the height of a building should be about the same as the width of the street it faces. Buildings on the north side of the street can be taller.

Posted by Guest on Apr. 12, 2011 @ 5:58 pm

Who do you think is making big bucks living off the government rules that give landlords billion-dollar tax subsidies and make working people pay the highest taxes and high housing prices? Real estate investment deals generate billions of dollars in fees for the legal industry - drafting the agreements; structuring the deals to minimize taxes; writing expensive "opinion letters" to keep the real estate promoters and developers out of jail for fraud; and creating the securities that will be sold through Pine St. and Wall St. brokers who peddle the deals.

When real esate prices explode caused by too many jobs coupled with a critical shortage of housing, who do you think helps real estate landlords and speculators cash out, or re-leverage their property to pull equity gains out of the property? The legal industry, of course.

When government goes into the debt market - which happens almost every week when you combine the airport, port, PUC, local school districts and city/county government funding and refunding debt operations - who do you think charges $850 an hour to review the 34 volumes of bond indenture documents?

Next to the real estate landlords and specualtors, big-firm lawyers are pulling down serious change helping grease the government machine that is doing an excellent job - I mean really EXCELLENT job - of rewarding the top 10% of societys' elites, while leaving the rest of us paying 50% of our income in taxes and 40% in housing costs.

I'm sure the big-name legal firms, government big-wigs, investment brokers, big developers and real-estate deal makers get together occasionally and have a big hoot at how well they've done and how the gravy train just keeps on rolling.

Believe me. Only the smartest of the smartest get into schools like Boalt and Harvard Law. Anyone graduating from there - or Stanford or Yale - knows exactly how big cities work and who is getting the big revenue streams (rents and interest payments) and how government greases the wheels to keep the cash flow churning into favored pockets.

Talk to the neighborhood aides of our liberal state government leaders. If our political leaders won;t alk to you, talk to the staff members of Ammiano, Leno, Ma, Yee, Boxer, Feinstein and Pelosi who can tell you how many billlions upon billions of tax subsidies the government gives to landlords and speculators each year - investment interest write-offs; phony depreciation deductions; tax-free property exchanges; tax-free refinancings; and completly tax-free transfer of real esate assets to the next generations even if the property has appreciated by tens of millions of dollars that will NEVER be taxed. I'm sure the staff will be more than happy to tell you how much the billlion dollar payments to biggest real esate landlords and specaultors cost you and me each year.

Posted by Robert on Apr. 06, 2011 @ 7:54 pm

My, my, the feeling of nostalgia. It's like 1998 all over again: encouraging tech firms to hire out-of-towners and raising rents to chase out the working-class and poor people who already do live here.

Fool me once...

Posted by DocAmazing on Apr. 09, 2011 @ 9:31 am

You all should read Professor Michael Hudson at michael-hudson.com, especially this:

http://michael-hudson.com/2006/04/the-new-road-to-serfdom-an-illustrated...

-marc

Posted by marcos on Apr. 09, 2011 @ 10:19 am

Hiring out-of-towners may cause them to buy or rent whereas locals already live somewhere in the locality. I see this going on in a lot of areas, including where I currently live. After doing a google search to read more about it, it seems not many people realize this phenomenon. But it was well-described here, particularly by Robert's comment above. I'm already on a shit-list in my town, so I won't say much more... just pay attention to the top advertisers in your local media channels. If they saturate the papers, magazines and TV, they're likely doing so to avoid any negative press. (PS - gotta love the certified green business and all its tax incentives, too. But that's a whole 'nuther topic.)

Posted by Guest on May. 30, 2011 @ 5:14 pm

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