Much to nobody's surprise, Twitter officials signed a lease to keep the multibillion-dollar company in San Francisco -- tax break and all.
And although progressives balked at the idea of cutting the microblogging giant a six-year tax break to keep its headquarters in San Francisco, they now say -- much to their chagrin -- that this is indeed a happy ending.
"Well, I guess the pressure they put on the Board of Supervisors worked," Supervisor John Avalos told SF Weekly. He followed that statement with this admission: "Yes, I think the fact that Twitter is going to stay here and put down roots is great."
Of course it's great, not even a left-of-left politician like Avalos wanted to see the $7 billion company move south. According to the Chronicle, the growing company expects to increase its workforce from 400 to 1,300 by 2013.
But is the deal worth it? True to form, Avalos, who is running for mayor, stands by his position -- that granting Twitter a six-year holiday on payroll taxes wasn't the right thing for San Francisco, which is facing a $300 million budget deficit.
Not only is it pandering to a highly valued company, but it would translate into revenue lost for the city, although the controller will argue otherwise. Moreover, it sets a bad precedent; other companies are already threatening to move away unless they, too, get a tax break.
Earlier this year, Twitter had said it would pull up its stakes and move to San Mateo County, where there is no payroll tax. Supervisor Jane Kim quickly responded with legislation that would give the company a tax break if it relocated to the city's struggling Mid-Market area.
Progressives were adamantly opposed to the idea of making exceptions for Twitter. Yet earlier this week, the Board of Supervisors approved the controversial deal, which now includes a community benefit component. What Twitter will give back to the community has yet to be decided, but Avalos said he doubts it will make up for what he believes the city has lost.
"There's no real pressure to get that agreement now that the legislation has been approved," he says. "It will be ironed out, but it won't be as strong as it could have been."
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