Mayor Edwin M. Lee issued the following statement on the Controller’s Report on the Three-Year Review on the Impact of the Central Market Payroll Tax Exclusion since the City’s adoption of the Central Market/Tenderloin Payroll Expense Tax Exclusion in 2011:

“The turnaround in Central Market in just three years is truly remarkable. What began as a conversation with Board President David Chiu and Supervisor Jane Kim about how we could leverage private investment to help turnaround a neighborhood has turned into a policy that has been truly transformative for Central Market and for our City, where now in San Francisco, our unemployment rate stands at 4.4 percent because of sound economic policy to create and retain jobs.

For decades, Central Market suffered from some of the highest commercial and storefront vacancy rates in our City and stubbornly resisted attempts at revitalization. Today, Central Market is at the center of new job creation, housing production and the arts in our City, generating new jobs and bringing millions of dollars in new revenue to fund vital City services. The Controller’s Office has 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 grown in the area.

The neighborhood is now home to 18 technology companies, 22 new small businesses and 11 new arts venues as a result of the City’s revitalization efforts. 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. The Central Market/Tenderloin Payroll Tax Exclusion provided that powerful economic tool to help us achieve these results.

We have more work to do to create a healthy, vibrant and inclusive neighborhood and to help longtime residents, small business owners and nonprofits to stay and grow in the neighborhood as it changes. But the decades of disinvestment and abandonment in Central Market and the Tenderloin are over, and we will not turn back the clock in our City’s efforts to create a healthy, vibrant and economically diverse community in this neighborhood.”

Since 2011 when the Central Market/Tenderloin Payroll Expense Tax Exclusion was adopted:

• 18 tech companies, two co-working facilities and two venture capital firms have located in the area with the Office of Economic and Workforce Development (OEWD) estimating space for more than 14,500 jobs;

• More than 5,600 units of housing are currently under construction or approved on Central Market with 20 percent of the units permanently affordable; another  4,000 additional units are proposed for the area;

• 22 small businesses have opened on Central Market; the storefront vacancy rate was at 30 percent in 2010; today, the storefront vacancy rate is at 16 percent; and

• 11 new arts venues with 4 on the way including ACT’s Strand Theater, PianoFight Theater, Women’s Audio Mission and Counterpulse.

The Controller’s Office confirms that this growth was accomplished without increasing residential rents, housing prices, and commercial rents beyond the rates experienced Citywide during the same period.