Mayor Lee’s Statement on 2014 Tax Exclusion Reports for Central Market, Stock Compensation, Biotech, CleanTech & Net New Payroll
Mayor Edwin M. Lee today issued the following statement on the Treasurer and Tax Collector's Report on the impact of tax exclusions including the City’s adoption of the Net New Payroll Tax Exclusion in 2012, the Central Market/Tenderloin Payroll Expense Tax Exclusion in 2011, the Stock Based Compensation Payroll Tax Exclusion in 2011, the Biotechnology Payroll Tax Exemption in 2010 and the CleanTech Payroll Tax Exemption in 2006:
“When I first took office in 2011, our City struggled to emerge from the Great Recession and unemployment hovered near double digits, with joblessness as high as 40 percent among some industries like the building and construction trades. And so, we took bold steps to create good new jobs and revive our economy, with targeted exemptions to our payroll tax in the Central Market and stock compensation Citywide, building on the successful results of our existing biotech, cleantech and net new payroll tax exclusions begun under my predecessor, now Lieutenant Governor Gavin Newsom.
The new Treasurer and Tax Collector's Report on targeted payroll tax exclusions in 2014 demonstrates that the strategic decisions we made then have succeeded beyond even our expectations at the time, revitalizing the Central Market district and making San Francisco a global hub for technology, the arts, biotech and cleantech. Today, less than five years later, hope and opportunity are back in San Francisco. Unemployment is at just 3.2 percent, we are collecting record revenues in business taxes and our City is thriving with new jobs for businesses large and small, new investment, new housing and a renewed confidence in our future.
In Central Market, the turnaround and revitalization have been particularly remarkable, a combination of our strategic payroll tax exclusion and our citywide stock compensation exclusion. For decades, Central Market suffered from some of the highest commercial and storefront vacancy rates in our City and stubbornly resisted well-meaning attempts at revitalization. Today, Central Market is at the center of new job creation, affordable housing production and the arts in San Francisco, bringing millions of dollars in new revenue to fund vital City services.
Since 2011, new energy and investment has created a transformation along Central Market with 17 technology companies, three co-work spaces, two venture capital firms, and 40 new storefront businesses, which has realized $40 million in additional taxable sales and saw a 17 percent increase in sales tax from 2010 to 2014. The area is now home to 15 new arts venues, such as American Conservatory Theater’s Strand Theater and the new CounterPulse theater opening on Turk Street this month. Ten of these arts organizations were relocated from at-risk real estate to a new Central Market/Tenderloin location so they could secure a long-term home.
The Controller's Office has even found that between 2010-2013 the City generated $7.1 million more in payroll tax revenue in the Central Market area than it would have if the area had grown at the same rate as the rest of the City, reflecting a greater-than-average rate of business and job growth in the area.
This public-private revitalization effort has been a nationally-recognized success, and the investment is bringing long-desired improvements to the Tenderloin, where we are beginning to see exciting new businesses, more housing, streetscape improvements, and renovated parks.
This transformation – which benefits all residents of the Central Market and Tenderloin neighborhoods and our entire City -- simply would not have occurred without the Central Market/Tenderloin Payroll Tax Exclusion.
I want to thank our partners in the private, nonprofit and public sectors who helped champion the wisdom of these policies in 2011, including Supervisors Jane Kim, former Board President David Chiu, Supervisor Mark Farrell, then-Supervisor Carmen Chu, Supervisor Eric Mar, Supervisor Scott Wiener and Supervisor Malia Cohen for supporting the Central Market payroll tax exemption. I would also like to acknowledge the support of Supervisor David Campos, Supervisor John Avalos, Supervisor Jane Kim, Supervisor Eric Mar, Supervisor Malia Cohen, Supervisor Scott Wiener then Supervisor Ross Mirkarimi and former Board President David Chiu for supporting our citywide stock compensation exclusion, which comprises the majority of the payroll tax exemption claimed in the 2014 tax exclusion report for Central Market.
The same can be said about Mission Bay. Without a Biotechnology Payroll Tax Exemption, we would not be seeing the transformation of the 303 acres of the Mission Bay neighborhood. Anchored by the UCSF Medical Center, our policies by incentivizing biotech and life sciences and providing critically needed space to start, stay and grow, which has helped to create jobs while driving innovative science and health discoveries in Mission Bay and securing the City’s place as a premier hub for biotech entrepreneurs and innovation. Along with nearly 6,000 units of housing with 1,700 (28 percent) affordable to moderate, low, and very low-income households and 41 acres of parks and open space, Mission Bay’s transformation from old rail yards into a flourishing community can be seen right before our eyes.
Finally, in 2012, San Francisco voters overwhelmingly adopted Proposition E, putting us on a path to finally eliminate our job-killing payroll tax altogether and replace it with higher license fees for large corporations and a more job-friendly gross receipts tax.
We have much more work to do to create healthy, vibrant and inclusive neighborhoods in our City and to help longtime residents, small businesses and nonprofits stay and grow in San Francisco. We will not turn back the clock in our efforts. We know a strong economic foundation – and good jobs for all our residents – will always be key to addressing our challenges and ensuring that our City’s rising prosperity benefits every single San Franciscan.”
“When I first took office in 2011, our City struggled to emerge from the Great Recession and unemployment hovered near double digits, with joblessness as high as 40 percent among some industries like the building and construction trades. And so, we took bold steps to create good new jobs and revive our economy, with targeted exemptions to our payroll tax in the Central Market and stock compensation Citywide, building on the successful results of our existing biotech, cleantech and net new payroll tax exclusions begun under my predecessor, now Lieutenant Governor Gavin Newsom.
The new Treasurer and Tax Collector's Report on targeted payroll tax exclusions in 2014 demonstrates that the strategic decisions we made then have succeeded beyond even our expectations at the time, revitalizing the Central Market district and making San Francisco a global hub for technology, the arts, biotech and cleantech. Today, less than five years later, hope and opportunity are back in San Francisco. Unemployment is at just 3.2 percent, we are collecting record revenues in business taxes and our City is thriving with new jobs for businesses large and small, new investment, new housing and a renewed confidence in our future.
In Central Market, the turnaround and revitalization have been particularly remarkable, a combination of our strategic payroll tax exclusion and our citywide stock compensation exclusion. For decades, Central Market suffered from some of the highest commercial and storefront vacancy rates in our City and stubbornly resisted well-meaning attempts at revitalization. Today, Central Market is at the center of new job creation, affordable housing production and the arts in San Francisco, bringing millions of dollars in new revenue to fund vital City services.
Since 2011, new energy and investment has created a transformation along Central Market with 17 technology companies, three co-work spaces, two venture capital firms, and 40 new storefront businesses, which has realized $40 million in additional taxable sales and saw a 17 percent increase in sales tax from 2010 to 2014. The area is now home to 15 new arts venues, such as American Conservatory Theater’s Strand Theater and the new CounterPulse theater opening on Turk Street this month. Ten of these arts organizations were relocated from at-risk real estate to a new Central Market/Tenderloin location so they could secure a long-term home.
The Controller's Office has even found that between 2010-2013 the City generated $7.1 million more in payroll tax revenue in the Central Market area than it would have if the area had grown at the same rate as the rest of the City, reflecting a greater-than-average rate of business and job growth in the area.
This public-private revitalization effort has been a nationally-recognized success, and the investment is bringing long-desired improvements to the Tenderloin, where we are beginning to see exciting new businesses, more housing, streetscape improvements, and renovated parks.
This transformation – which benefits all residents of the Central Market and Tenderloin neighborhoods and our entire City -- simply would not have occurred without the Central Market/Tenderloin Payroll Tax Exclusion.
I want to thank our partners in the private, nonprofit and public sectors who helped champion the wisdom of these policies in 2011, including Supervisors Jane Kim, former Board President David Chiu, Supervisor Mark Farrell, then-Supervisor Carmen Chu, Supervisor Eric Mar, Supervisor Scott Wiener and Supervisor Malia Cohen for supporting the Central Market payroll tax exemption. I would also like to acknowledge the support of Supervisor David Campos, Supervisor John Avalos, Supervisor Jane Kim, Supervisor Eric Mar, Supervisor Malia Cohen, Supervisor Scott Wiener then Supervisor Ross Mirkarimi and former Board President David Chiu for supporting our citywide stock compensation exclusion, which comprises the majority of the payroll tax exemption claimed in the 2014 tax exclusion report for Central Market.
The same can be said about Mission Bay. Without a Biotechnology Payroll Tax Exemption, we would not be seeing the transformation of the 303 acres of the Mission Bay neighborhood. Anchored by the UCSF Medical Center, our policies by incentivizing biotech and life sciences and providing critically needed space to start, stay and grow, which has helped to create jobs while driving innovative science and health discoveries in Mission Bay and securing the City’s place as a premier hub for biotech entrepreneurs and innovation. Along with nearly 6,000 units of housing with 1,700 (28 percent) affordable to moderate, low, and very low-income households and 41 acres of parks and open space, Mission Bay’s transformation from old rail yards into a flourishing community can be seen right before our eyes.
Finally, in 2012, San Francisco voters overwhelmingly adopted Proposition E, putting us on a path to finally eliminate our job-killing payroll tax altogether and replace it with higher license fees for large corporations and a more job-friendly gross receipts tax.
We have much more work to do to create healthy, vibrant and inclusive neighborhoods in our City and to help longtime residents, small businesses and nonprofits stay and grow in San Francisco. We will not turn back the clock in our efforts. We know a strong economic foundation – and good jobs for all our residents – will always be key to addressing our challenges and ensuring that our City’s rising prosperity benefits every single San Franciscan.”