SAN FRANCISCO—Mayor Edwin Lee acknowledged the ongoing revitalization of the Central Market neighborhood three years after the creation of the Central Market/Tenderloin Payroll Expense Tax Exclusion.
The Central Market and Tenderloin Area Payroll Expense Tax Exclusion was adopted by the Board of Supervisors and signed by the Mayor in 2011. It provides eligible businesses with a six-year payroll tax exclusion during an eight year period. The tax exclusion is open to all businesses in the Central Market and Tenderloin Areas. Companies with a payroll over $1 million are mandated to complete Community Benefit Agreements with the City.
A press release from the Mayor’s Office on April 14 indicates that back in April 2011, the Central Market contained some of the highest vacancy rates in the City. San Francisco has collected more than $8.4 million in additional revenue since 2011 from higher property tax and real estate transfer tax in the Central Market area.
“The turnaround and signs of revitalization in the Central Market area in just three years are remarkable, but we have more work to do to help longtime residents and new small business owners alike,” said Mayor Lee. “The Tax Exclusion was carefully crafted to attract investment into the heart of our City, which for years suffered from high vacancy rates and stubbornly resisted previous attempts at revitalization, and it has been a nationally-recognized success. 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 for the neighborhood. The decades of disinvestment and abandonment by the public and private sectors in Central Market are over, and we will not turn back the clock on our promising efforts to create a healthy, vibrant and economically diverse community in the Central Market neighborhood.”
Since the three years that the Central Market/Tenderloin Payroll Expense Tax Inclusion, the Central Market has seen substantial economic growth and activity in the following areas:
• 18 tech companies have located to the area—totaling an estimated 2 million square feet of office space, with the Office of Economic and Workforce Development (OEWD) estimating space for more than 13,000 jobs;
• More than 5,000 units of housing are currently under construction or approved on Central Market with 1,453 units permanently affordable (26 percent);
• 17 small businesses have opened on Central Market. The storefront vacancy rate was at 30 percent in 2010; today, the storefront vacancy rate is at 22 percent; and
• Eight new arts venues with two opening on the way including ACT’s new Strand Theater and PianoFight located on Taylor Street.
“The tax incentive for the Central Market area played a critical role in revitalizing a long struggling area of the city,” said South Mountain Economics President Dr. Michael Mandel who recently completed the study San Franciscoand the Tech/Info Boom: Making the Transition to a Balanced and Growing Economy. “Mayor Lee’s policies are helping San Francisco achieve the most elusive of goals: a balanced and growing economy, with job growth for a wide range of residents.”
“St. Anthony’s is benefiting from the new energy in the neighborhood,” said St. Anthony’s Foundation Executive Director Barry Stenger. “Not only do we have volunteers from the new companies, but we have new partnerships that are helping to address public safety and previously unmet needs, like LinkSF, an app that connects homeless clients with services. We welcome the new investment and the newcomers to the neighborhood if it means more people coming together to solve our City’s challenges; it’s not a zero sum game.”
Back in 2011, the San Francisco Controller’s Office discovered that over a 20-year period, the Central Market/Tenderloin Payroll Expense Tax Exclusion would generate a net revenue of $54 million dollars of additional payroll revenue for the City. The Controller’s Office is currently working on a three-year assessment and review of the impact of the Central Market Tax Exclusion as mandated by the legislation. The report is expected to be released in late Spring.
Those looking for additional information about the Central Market Exclusion can visit http://oewd.org/Central_Market_Tax_Credit.aspx.
By LaDale Anderson