After a two-month struggle, San Francisco has approved a payroll tax exemption to help revive its long distressed Mid-Market and Uptown Tenderloin neighborhoods. The Board of Supervisors 8-3 vote (Avalos, Campos, Mirkarimi dissenting) represents a stunning victory for the measure’s sponsors, Supervisors David Chiu and Jane Kim and Mayor Ed Lee, and a triumph for the many groups that have long struggled to improve two neighborhoods that failed to generate businesses despite the dot-com boom of the late 1990’s and the following housing bubble. Twitter’s request for a payroll tax exemption raised critical questions about how progressives view economic development, and whether neighborhoods must tolerate open drug dealing and vacant storefronts in order to avoid “gentrification.” It also revealed how uninformed many activists are about San Francisco’s many anti-displacement laws, as opponents of the legislation falsely claimed that the measure would replace “residential hotels and low cost apartments with high-rent condos,” and “small businesses with big corporations.

A Major Step for Mid-Market

This legislation is the most important step forward for Mid-Market since it began its freefall in the mid-1960’s.

While other major projects such as the New Trinity Plaza and City Place have either been constructed or will soon be developed, Twitter offers the very real possibility that Mid-Market will become a destination for other high-tech businesses. In other words, Twitter offers the first real opportunity for Mid-Market to attain a new and viable function in San Francisco’s economy, something which it has lacked for nearly fifty years.

While opponents argued that bringing Twitter’s high-paid employees to 9th and Market would “gentrify” the surrounding areas, these same forces have never tried to restrict high-tech businesses like Twitter from opening in the South of Market. The notion that high-paid employees should be banned from Mid-Market but allowed elsewhere in the city makes no sense, and raises questions as to why a segment of the city’s progressive community attacked Twitter’s impact at 9th and Market while ignoring its original opening in SOMA---as well as ignoring the opening of biotech and other major corporations in SOMA and downtown.

From 1920 through the mid-sixties, Mid-Market theaters supplied a critical customer base for Uptown Tenderloin restaurants and bars. The decline of the former devastated the latter; after fifty years, this historic business relationship could finally be restored.

While proponents of the legislation thought it great that high-tech workers at Twitter and other companies would patronize Uptown Tenderloin bars and restaurants, opponents saw this as causing “gentrification.” In fact, a major push by SEIU 1021 to exclude the Uptown Tenderloin from the legislation seemed to forget that the high-wage workers they were afraid of would be employed in Mid-Market, not the Tenderloin. The latter’s businesses helped by the payroll tax exemption primarily include restaurants, bars, and a supermarket, all of which create working-class jobs.

Curiously, SEIU 1021 has played an almost invisible role in battling the proposed California Pacific Medical Center (CPMC) project at a site as close to the Uptown Tenderloin as the Furniture Mart, and which will bring in far more high-paid employees than Twitter. At yesterday’s rally against CPMC, SEIU 1021 had a single speaker but no visible presence, and it has not turned out people for hearings around CPMC as it did for the Twitter legislation.

SEIU 1021’s opposition campaign also ignored the SEIU Local 87 janitor jobs lost when Mid-Market buildings including the Furniture Mart became vacant. Aren’t these the immigrant, working-class jobs that progressives are supposed to support?

A Vital Step for Uptown Tenderloin

The Uptown Tenderloin needed this legislation as much as Mid-Market, though its lack of office buildings and retail opportunities makes the overall impact less. If you talk to anyone trying to market commercial opportunities in the Uptown Tenderloin---and this point was made in the committee hearings by TNDC, Mercy Housing, and Hastings Law School, all of whom are involved in this---you will soon learn that it is a hard area to attract tenants.

I never heard a single opponent of the legislation explain their alternative strategy for economically revitalizing the Uptown Tenderloin. This entire issue did not concern them, other than expressing the fear that Mid-Market high-tech workers would “gentrify” the Tenderloin by patronizing its bars and restaurants.

Why is it fine for high-tech businesses to open in SOMA and their workers patronize South of Market, Mission, Haight, North Beach or other neighborhood eating establishments but it’s a bad impact if they eat in the Uptown Tenderloin?

If anyone still wonders why some progressives are seen as anti-business, watch the hearings on this legislation.

Scare Tactics Fail

SEIU 1021 put up flyers saying “Stop the Attack on the Tenderloin and SOMA.” It was part of their effort to scare low-income residents into believing they lack the legal protections that Uptown Tenderloin residents fought valiantly to secure over the past three decades.

For example, the flyer stated that the tax measure would replace “residential hotels and low cost apartments with high-rent condos.” Under San Francisco law, condo conversions of buildings over six units are prohibited. The Tenderloin has only a handful of buildings that size, and none of the SRO’s are six units or less.

SRO’s are protected from the state Ellis Act, protected by the city’s anti-conversion law, protected by the North of Market Special Use District (Planning Code Section 249.5), and protected by city rent control and just cause eviction laws. In addition to what amounts to the greatest level of protection for any low-income housing stock in the United States, thousands of SRO’s are owned by nonprofits and are off the speculative market.

SRO’s and low-cost apartments were never at risk from this legislation. Similarly, the flyer’s claim that the measure will replace “small businesses with big corporations” is ridiculous; a big corporation has no place to locate in the Uptown Tenderloin, a neighborhood whose limited office space is in buildings far too small for any “big corporation.”

SEIU’s scare tactics are profoundly disempowering. Uptown Tenderloin residents have enough problems in their lives without having to fear nonexistent threats.

What Do Some Progressive Want?

After Supervisor Ross Mirkarimi spent hours at the hearings critizing the Twitter legislation as a corporate tax break the city could not afford, he turned around and backed a far larger tax break for Zynga and other companies facing taxation of stock options (Mirkarimi refused my repeated requests to meet with him about the Twitter legislation). Mirkarimi has also been curiously silent about JP Morgan Chase (a multinational corporation) moving into a retail space in his district on Divisadero (a move that would result in the displacement of small businesses for a big corporation, precisely what Mirkarimi claims will be caused by Twitter).

At the April 5 Board meeting, Mirkarimi stated that the Tenderloin is benefiting from “well neglect.” I do not recall ever seeing Mirkarimi in the neighborhood since he took office in 2005, but suggest he come by lower Turk some time and then tell us if he finds that status quo acceptable.

It was not clear from the hearings whether some progressives oppose all corporate employers or just some, whether they see a problem in all or just some high-paid employees, or whether these progressives want to keep the Uptown Tenderloin exactly as it is----a place where many residents fear to go out at night, and stay only because they cannot afford to move elsewhere.

Tenderloin residents are entitled to the same level of public safety, and the same access to quality neighborhood-serving businesses, as those in more upscale neighborhoods. Legislation that increases small business activity furthers both goals.

It would be great to see the opponents of the Twitter legislation get involved in helping to improve Mid-Market and the Uptown Tenderloin rather than just saying no.

Randy Shaw is Editor of Beyond Chron