Twitter tax break snubs community…again
Chronicle says the program grows up, but we say it still wets the bed
While you were enjoying happy hour yesterday, the League was down at City Hall to hear the latest on the Twitter Tax Break. We were at the Citizen’s Advisory Committee (CAC) meeting for the Central Market & Tenderloin Area to review the Community Benefit Agreements (CBAs) for companies seeking the Central Market Payroll Tax Exclusion (aka the “Twitter tax break”). Yesterday the Chronicle crowed that the “SF Mid-Market tax-break program grows up.” But in our opinion, it was the same old story: tech companies cashed their tax break checks from the City and offered the community a lot of vague promises in return.
Here’s how it all works. The CAC (we’ll call it “the Committee”) is appointed by the Board of Supervisors to make sure these companies aren't given a blank check for just setting up shop in Mid Market, and then makes recommendations to the Mayor, the Supervisors and the City Administrator.
Companies applying for the tax break with payrolls over a million dollars have to enter into a Community Benefit Agreement with the City Administrator. According to the ordinance, the Agreements may include commitments to engage in community activities in the neighborhood as well as participation in workforce development opportunities. (You know, to give back for all that money they save from the tax break!)
The Committee first met on January 2 to review the Agreements from six companies: Advsor, Microsoft/Yammer, One Kings Lane, Spotify, Twitter and Zendesk. Advsor and Spotify’s reps didn't even show, and the One Kings Lane representative was stuck in the blizzard on the east coast! Patrick Connors, friend of the League, and prolific poo tweeter (@uppityfag) was there on January 2 and live tweeted the event.
The Committee came down hard on the companies for using vague language — terms like “encourage,” “good faith efforts,” “support” — but with no minimum requirements for volunteer hours, no specific dollar amounts, no named community organizations to receive benefits. Lots of “notifying” and “encouraging” employees.
Our personal fave came from Twitter who promised to “preserve affordable housing and tackle homelessness”. Be our guest, Twitter. Can you solve world hunger while you’re at it?
With three no-show companies, a special follow-up meeting was called for January 9. The League was there for all the excitement. Zoosk was put on the agenda for January 9, but they never even completed their Agreement. Nobody bothered to show up from One Kings Lane . Same for Twitter. No show. I mean, geez, they’re all right down the street! Send somebody, anybody, so you don’t look like a dick.
In contrast, Zendesk showed that they took the Agreement seriously. Their community liaison regularly attends the committee meetings. They’re also the only company willing to disclose how much of a tax break they got and what percentage they would give back to the community. When Zendesk came up, the Committee gave them lots of love.
The Committee wanted percentages that can be scaled up as the companies grow. They wanted to know minimum volunteer hours. Once again, they came down hard on language. For example, “Microsoft will work with community nonprofits and SFUSD to obtain the clearances needed to allow employees to volunteer at local schools”. So… getting clearance and NEVER volunteering satisfies this goal?!
Lots of “good faith” efforts. Twitter actually put in their agreement that they were helping the Eviction Defense Collaborative. Peter Masiak, the Committee Chair, quipped that one thing they could do to help the Eviction Defense Collaborative was help them not get evicted themselves. Twitter could offer office space to non-profits facing displacement.
But the “City family” was rushing to get the Agreements approved. The City Attorney said the deadline to approve them was fast approaching. There had already been two meetings in December and now two in January. Bill Barnes, Project Manager for the City Administrator, pushed hard to get the Agreements approved and finalized by the deadline of January 31.
Public comment echoed the sentiments of the Committee. We want more! And possibly the worst realization was that the Committee approval was just a nice thing to have. Without approval, the City Administrator can still enter into the Agreements as they see fit. The Committee has no teeth, whatsoever. The only way to increase the power of the Committee is for the Board of Supervisors to change the actual tax break ordinance.
The Committee voted, and it was not pretty. Zendesk was the only Agreement they approved. They voted down the other five: Advsor, Microsoft/Yammer, One Kings Lane, Spotify and Twitter.
What does that mean? Well, probably nothing. Last year the Committee disapproved all of the Agreements (except for Zendesk’s), and the City Administrator ratified them anyway.
Tech companies wonder why they’re getting a bad rap. Well, here are five companies that are taking the City’s money and thumbing their noses when the City asks them to give something back in return. Y’all aren’t helping!
What’s next? We assume the City Administrator will ignore the Committee again and ratify the Agreements. Then, the companies that get the tax break will submit monthly status reports, and we’ll see if they put their money where their mouths are. We’re not holding our breath. The next regularly scheduled meeting of the Citizens’ Advisory Committee is March 6, 2014.
If you like to geek out on agreements like we do, check out the drafts online: http://www.sfgsa.org/index.aspx?page=5065
