Zendesk first to enjoy 'Twitter tax break'


Although Twitter has signed a lease and plans to move in mid-2012, another tech company, Zendesk, is the first to take advantage of the payroll tax exemption that the city created in April.

For decades the mid-Market corridor has defied revitalization efforts. Its blocks are filled with vacant storefronts or boarded up buildings, but it's into this environment that a new high-tech firm is moving

"We were so fortunate that the city of San Francisco had a bold and a visionary plan for this central Market area," said Zendesk CEO Mikkel Svane.

That plan is the so-called Twitter tax break, giving companies a break on payroll taxes in exchange for setting up shop in the blighted neighborhood. The deal is named after Twitter, but high-tech firm Zendesk is actually the first to move in, swapping a South of Market location for 35,000 square feet of space. Mayor Ed Lee says it's just one aspect of a multi-pronged approach to revitalize the area.

"The effects that we're making, which [are] multi-disciplinary, using the arts, using financial incentives, using the payroll tax incentive, at the same time making sure that we're making decisions at City Hall to keep the economic vitality of the city strong," said San Francisco Mayor Ed Lee.

While encouraging art establishments and giving out small business loans, the tax break is the big incentive and Supervisor John Avalos does not support that deal.

"It's not fair to all the other businesses, I believe, in San Francisco that don't get that," said San Francisco Supervisor John Avalos.

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