Twitter vows to stay in San Francisco if payroll-tax deal is OK’d 

Twitter has committed to remain in San Francisco for years to come if a tax break for the company is approved.

The commitment comes as the Board of Supervisors began proceedings Wednesday on legislation that would enact a six-year, 1.5 percent payroll tax exemption on new hires for businesses relocating to the mid-Market Street area, which city officials have attempted to revitalize for decades.

Twitter, a popular microblogging site founded in San Francisco in 2006, has signed a letter of intent to lease the historic and currently vacant building at Market and Ninth streets. But Twitter would back out of the deal if the tax break isn’t approved, the company’s chief financial officer, Ali Rowghani, wrote in a letter sent to Mayor Ed Lee and the Board of Supervisors on Tuesday.

The company, which has been exploring relocating to Brisbane, said it would cost $30 million more during a five-year period if it stayed in San Francisco without the tax break.

“We still have to watch our pennies,” Rowghani said in the letter.

The payroll tax break is valued at $22 million, according to a report by budget analyst Harvey Rose. Twitter currently has about 350 employees and plans to grow to 3,000 workers by July 2013. Twitter currently pays $535,500 in payroll taxes, the report said.

Supervisor Jane Kim, who introduced the legislation, emphasized that Twitter will help stimulate economic activity.

“This is a huge boon to many of our small businesses that are struggling in this area,” Kim said.

But critics said the proposal amounts to “corporate welfare.”

“The path you have chosen is big business running the show,” said Gabriel Haaland, the political director of SEIU Local 1021, which represents thousands of city employees. “The path that you have taken will gentrify the
neighborhood.”

The Board of Supervisors Budget and Finance Committee postponed a vote on the tax break until next Wednesday, but it is expected to approve the deal and send it to the full board for a vote. The committee amended the legislation to exclude certain buildings without vacancy problems.

jsabatini@sfexaminer.com

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