After decades of failed attempts to revitalize Central Market, the neighborhood is finally showing signs of a comeback — both physically and economically. This turnaround is happening thanks in part to the Chamber of Commerce-supported Central Market/Tenderloin Payroll Tax Exclusion passed by the Board of Supervisors in 2011. The incentive provides a six-year payroll-tax exemption on net new jobs created by businesses moving into or expanding in the area.
Enacted at a time when Twitter was considering a move out of The City, critics quickly criticized the incentive, dubbing it the “Twitter tax break.” But the Central Market incentive has never been about Twitter, or any other individual company doing business in our city. It’s about providing employers of all types and sizes with the incentive to relocate, expand and help revitalize a vital segment of San Francisco’s urban core.
According to a new report from the San Francisco Office of Economic and Workforce Development, that’s exactly what’s happening. In total, 17 new businesses have moved into the Central Market area and 14 have taken advantage of the incentive. Storefront vacancies have declined by 60 percent since the tax incentive was put in place. Sales-tax revenues have grown by 21 percent since 2010.
The effect is proving positive. These businesses have brought 7,000 jobs to Central Market. That’s 7,000 people now walking the once-blighted six-block stretch to and from work every day and breathing new life and commerce into the area. This in turn has helped spur more revitalization, with 13 small businesses opening in the area over the past two years and five others about to open. Nine arts organizations have opened or are in development. More than 5,500 new housing units are also under construction or approved for development, with 26 percent of the units below market rate.
Businesses taking advantage of the tax incentive are also giving back to the community through community benefit agreements between each company and The City. Last year, these partnerships provided nearly 40 community organizations with volunteers, donations and internships for local youths.
San Francisco’s Central Market/Tenderloin Payroll Tax Exclusion is a key driver in the area’s comeback. It is also a good reminder of what can be accomplished when The City, its residents and businesses align goals and work together to solve problems.
Bob Linscheid is the president and CEO of the San Francisco Chamber of Commerce.