Last week, the first San Francisco startup moved to the Mid-Market area under the tax break revitalization efforts approved back in April. The Company, Zendesk, has taken advantage of the no-payroll tax backed by Mayor Ed Lee, who visited the 6th Street location on Tuesday.

This controversial effort began in February when Twitter threatened to take their expanding 350 employees down the Peninsula where there is no 1.5% tax on total employee earnings. Twitter, rapidly needing to expand out of its Folsom St. location, agreed to stay in the city if the payroll tax was removed for the next eight years.

In April, the Board of Supervisors passed the Central Market and Tenderloin Area Payroll Tax Exclusion, which eliminated the payroll tax for companies working in the Tenderloin and Mid-Market areas. Jane Kim, one of the brokers of the deal, insists that this was not an effort to reward big business, but rather to incentive local startups to “bring jobs to Mid-Market” and perhaps an organic revitalization effort alongside.

Mayor Lee adds that this “Central Market revitalization effort [was made] with the goal of restoring Central Market as a center for arts, retail and innovative industries.” Zynga and Yelp have been in similar talks with city officials.

[SF Appeal
[CBS Local]
[SFBG]