we should do everything we can to go to the point of doing a spot and save tax break for twitter. then do a spot in state tax break for a grocery store in the tenderloin area. this makes me believe that everything we are talking about is not transparent or deliverable. and as it stands now, neither is the cba. nothing in the process has won me over. and it sets us up to have the exact same discussion with other companies in other districts will also wonder why they are not getting their fair share i would like -- not getting their fair share. i would like to have a pause, if we could. thank you. [applause] supervisor chiu: supervisor winner? supervisor wiener: we in city

hall to a lot of talking about the importance of keeping jobs in san francisco and creating jobs, making san francisco a better place to do business, it easier place to do business, and it is just an enormous amount of talk. now we have an opportunity to actually take action and put money where our mouth is, and that is why i am supporting this legislation. there are a lot of ways we could make it easier to do business in san francisco. we could improve the permitting process. we can streamline things. we can do all sorts of things to help businesses stay here. one of the things we should do is targeted tax measures like the one before us today. i am not a big ad because it up willy-nilly tax cuts. -- big advocate of willy-nilly

tax cuts. it can work. we have seen that, and it has worked when you compare the number of biotech companies in san francisco today. i agree with my colleagues who have spoken that we need broader payroll tax reform in san francisco. there is no doubt about that. i beg you 11-0 on this board. -- i bet you 11-0. but when you do tax breaks, there are winners and losers. and it is a long process. there is a reason we have not had a good tax reform out of washington, d.c. in 25 years. because there are winners and losers. in the short run, we need to make sure we are keeping companies like twitter here in san francisco, that we are building a core of start-ups and

post-startup tech companies, and we need to make sure we are doing what we can to revitalize the market in the tenderloin. that is why i am for this legislation. [applause] supervisor chiu: supervisor mar? supervisor mar: thank you. let me think president to end -- president to -- chiu and mayor lee. i share the concerns of my colleagues about the gentrifying impacts about whether the jobs in the benefits to our city will materialize with the plan. i would like to especially thank supervisor kim for ensuring the people of the central market and the tenderloin, that their needs are

looked after. that is why i am trying to form an advisory committee that gives empowerment to the people of the different neighborhoods to create a community benefits agreement to minimize the gentrifying impact. i am not going to deny this tax break will have the gentrifying impact. i would just like to say, with supervisor kim's effort, we can minimize that and mitigate that. i would also like to say i really support nearly and -- mayor lee and leechiu, but like my colleagues, i am skeptical that other companies will not come to us and ask for tax breaks that we give to other companies, whether it is zynga or others that come down the pipeline. i would also like to think supervisor kim.

they've been working behind the scenes up into this point. they are still protecting the parcel, the grocery store, the other neighborhood-serving community benefits. i also want to say i support efforts that supervisor kim has put together to put together an advisory committee that has seven people on it of different expertises. i think it does give power to other people in the community. as some have already said, i think it is different than looking at a community benefits agreement, or a development agreement, at a place like treasure island. this is a business developing the community business agreement. i am in support of the trailing legislation.

though i share the concerns of big fat giveaways to corporations -- and i am of, and it took her -- and i am of common twitter user these days -- tax breaks when our communities are suffering such setbacks, but the voice of the community and the stronger benefits community agreement, i will be supporting the legislation today. thank you for the leadership of mayor lee and president chiu. thank you. supervisor chiu: supervisor can boast -- supervisor campos? supervisor campos: thank you, mr. president. this issue has been talked about for quite some time. let me begin -- as i have watched from the sideline, some of the things that have been said or not said about this deal. it has been a very informative

processed for me. i have to say, it was a tough vote for me because of a lot of reasons, but i think the main reason was that i really recognize something has to be done about the market, about the tenderloin. and while i also understand, as supervisor of a list was saying -- supervisor avalos, was staying, something needs to be done. something needs to be added. which is why we need to look at what this proposal has to offer. that we say one of the biggest issues all along was the question of what benefits will the community get directly from this deal? i am very proud of the work supervisor kim has done in trying to strengthen that

process. if you look at where the deal is as opposed to where it started, i think it is very commendable. the reality is there are limitations in terms of how far we can go. there are legal limitations in terms of the feedback from the community is. my preference would have been to see a community benefit agreement that would have been finalized, so we can see actually what will be provided. the way that the law works, there are hearings, and input, but at the end of the day, the community will not be able to share -- to shape what happens, except to have public discussion. to me, that is insufficient and that is the problem. i do believe that the legislation makes sense, which is why i am supporting that. i think it makes sense to

strengthen the process of the community has more feedback, but let me step back and say one of the problems i have with this proposal is, while indeed something has to be done about the tenderloin and mid market, there has to be a larger discussion. there has to be a discussion about taxes in the city and the larger implications, not only with respect to this area of the city, but other geographic areas, including other economically-challenged geographic areas. i have always said that we at the board have an obligation to keep an open mind when it comes to promoting economic development. and even though some have questioned the appropriateness of a tax break, i do think the

consideration of a tax break is something you should be open to. i have voted for a tax break for the biotech industry. i supported -- supervisor mirkarimi, a tax break for the film industry. i think it is important to keep an open mind. but we need to ask ourselves whether or not what is already in place is actually working, which is one of the reasons why i will be asking the budget analyst to provide a support on whether or not the biotech tax break has achieved what was intended. the problem i have with this deal is as much as it provides some benefits, i do have concerns about the implications to other neighborhoods. i think it is important for us to encourage companies like twitter to stay in san

francisco, but to do so in a way that does not have unintended consequences for other parts of the city. i think there is a way we can make that happen. i do think we have an incentive that should be created for companies to go into mid market, but that has to be weighed against -- and it is not creating an incentive so companies leave other neighborhoods. that is one of the fears that the -- that i have. are we creating an incentive for companies to leave other neighborhoods where we want them to stay? that is one of the concerns, where i think looking at the issue of stock options in a citywide way makes sense. i do think there is our room, there is a place for us to figure out how we can work with the tax system to create economic development. i hope, in respect of of what happens with this vote today, -- your respective of what happens with this vote today, we look at

how this affects the local economy in a way that raises the bar across the board. i do not think it is enough for us to simply say, no. i think we have to offer alternatives. i think one big alternative is something supervisor kim has already said we are looking at, which is how to deal with the vacancies that are impacting many areas of the city, which is one of the reasons this proposal has been put forward, and i will be asking today, also, at the -- for the budget analyst to provide assistance in relation to legislation that supervisor kim is already working on, on a possible vacancy tax, trying to get an understanding of what the threshold should be in terms of the size of the property, so as we go forward with the legislation and create the

structure that there are no unintended consequences. i look forward to hearing directly from the budget analyst on that so we can get that information and of manthey work supervisor kim is already doing -- and augment the work supervisor kim is already doing. i think we need to approach this in a systemic way that raises the bar. i, again, want to thank supervisor chem, -- supervisor kim, supervisor to -- chiu and merely. i hope that we create something that will help all neighborhoods throughout the city. thank you. [applause] supervisor chiu: supervisor farrell? supervisor farrell: thank you. i have been happy to co-

sponsoring this legislation from the beginning. promoting economic development is the right thing and what we should be doing here at city hall. it is no secret. i am enthusiastic. our payroll tax system is broken. i know president chiu started a dialogue earlier periods until we fix this, we need to do everything we can to make sure we are on solid footing to create a solid economic environment for san francisco that does not hamper our ability to create jobs, attract companies we want to locate here in our city. the two things i want to point out, first, and regards to this legislation, it is unfortunate it has evolved into a dialogue about one company. we can not capitulate to one

company time and time again. that does not work for the long haul. yet we need to focus on the right economic policies that affect all businesses citywide. second of all, we cannot look at this as a corporate giveaway. the bottom line is if we do not do this, if we do not create laws and in the tax system that is equal to other cities, other municipalities, they -- we will not have their payroll to tax. that is a fact. companies will leave this city. that is the reality. companies realize, investors realize. we need to incorporate that into our thinking. i applaud supervisor ken and the rest of the co-sponsors of the legislation. i am happy to support it. >> supervisor david chiu?

supervisor chiu: thank you for your patience, members of the public, for the months of debate. i have been a proud sponsor of this legislation from the beginning. after all the debate, i think we are absolutely doing the right thing. i would like to address some of the issues that have been raised. first, there was the suggestion that we have a lot of policies in the tenderloin and mid market area. and we should allow those to work. i absolutely agree. we have attended many things in these neighborhoods and that is why we need to move forward. the tenderloin area and the mid market area have experienced decades of light, high crime, high vacancy, and we need to change the status quo. we need to move forward with something that is different,

that we believe will do and achieve what we want to see happen here. there is also the suggestion that perhaps the city dealt a little too soon with twitter. that perhaps we should have negotiated on the topic of stock options. as someone who has had numerous conversations with the cfo of twitter, i can assure you that while they are concerned about stock options, the payroll tax is one of their biggest headaches. we are the only city in the state that has a payroll tax. the only city. i have friends in san jose that make fun of the fact that we are at an incredible competitive disadvantage because of the payroll tax. they would love to woo twitter and companies like that to their jurisdiction. just as an aside -- president

obama at the beginning of this session proposed and passed payroll tax breaks. somehow we as a community did not have a problem with that, and we were supportive of what president obama did at the national level because we all believed it made sense. i want to obviously reiterate what we have heard from everyone about the importance of having a comprehensive business tax reform. this is something i have been talking about when i served in the small business commission. it is something i experienced as the founder of a small business. that being said, last year, we started the conversation. i want to thank various stakeholders who have been in conversations with me thus far about it, as well as colleagues. i want to thank today the president of sciu 1021.

they have been one of the most vehement opponents of the legislation today, but a few hours ago, the president committed we will work together to talk about how we reform business tax. that being said, we have issues now. we have unemployment, crime, vacancy rates. we cannot wait for us to move our city for. we all know that likely this tax reform will not be considered by san francisco until november 2012. what we need to do now is a first step forward in the right direction. it is a first step forward for trying to bring back these neighborhoods, and it is a first of forward for making sure we get our economy back on track. colleagues, a very much hope he will consider this and i look forward to future dialogue about how we perform our business tax. [applause] supervisor elsbernd: supervisor

chu? supervisor chu: thank you, president else burned -- elsbernd. [laughter] i am supportive of this moving forward. i just wanted to add three points we of not talked about just yet. one, with regards to the budget , i can appreciate how the decisions that we make in any given year affect our future budgets. to think about this item, the potential impact on the following years is something we should all consider when we start to say what does it mean to bring businesses? what does it mean to bring an additional tax base to san francisco? this is important to consider for the future. we are not losing current payroll taxes, and in fact, we

will be growing what our future will look like. the other thing i wanted to say is i have found an appreciation for supervisor kim's effort to deal with the mid market area. i think it is brave to deal with this in a way that has not been dealt with before. it is a proposal that will bring people, vibrancy to an area that does not currently have it. it is such a big change for an area like the midmarket section. the second point i want to make -- we circle are round this being our around one organization, around twitter, around a large corporations, and we forget some of the true beneficiaries of something like this will be the small businesses. i cannot tell you how many times i have gone to grab lunch at iron wok, and they have had so

much drop in their business since losing aaa out of the building. every time i go there, they tell me, can you bring a menu to city hall? can you invite people to order in? sometimes, when you think about a measure like this, it is important think, it is not only that organization we are talking about that might benefit, but think about all the residual businesses that will also be able to benefit from this kind of proposal. in my mind, i think this proposal makes perfect sense. it is limited. it brings vibrancy to an area that did not have it before. i want to commend supervisor kim and the mayor and others for their work on this. >> i think the honeymoon is over, colleagues. we have had a very spirited conversation.

i would like to acknowledge and thank you for bringing this legislation to the forefront of our minds. i certainly hope that the spirit of reform and the dedication and commitment to revitalizing certain parts of downtrodden san francisco remains, because this gets us to think thoughtfully about policies that affect our small business community and also how the small businesses affect our neighborhoods. as you know, i will represent district 10. in preparing for this vote, i spent considerable time thinking about how this legislation would affect third street, leland avenue, which also has its own struggle with unemployment, drugs and crime. i am extremely skeptical about

how the conversation has turned to focus on one particular company and less about the larger issues, none of which it tends -- it tends to satisfy. i agree with my colleagues to a spoken who say that something needs to be done. i appreciate supervisor avalos' comments about the need for social responsibility. we need those businesses to be partners in this community. we are all living together and we must support one another. now, campos and i had interesting conversations earlier this afternoon, and one conversation was about the implication that this could have

on neighborhoods. i am very concerned about businesses leaving. this legislation to attract people to the midmarket area, but it could have a negative an unintended consequence of wooing business is to leave -- say, the southeast, mission street, ocean avenue -- to join the midmarket area. yes, it stimulates the midmarket, but it creates a void in the surrounding neighborhoods. i am in favor of the legislation and i will be voting for it, but it is with serious threat to reject reservations -- but it is with serious reservations and in a word about the mission we're sending to the small business community.

thank you. supervisor elsbernd: supervisor camera? supervisor kim: i want to thank my colleagues. no matter how you are voting today, you have been struggling for weeks with policies and have engaged with your constituents and stakeholders as well. i appreciate all the feedback everyone has given. first, i am glad this legislation is opening up a larger dialogue of reforming how we tax businesses in san francisco. is something all 11 of us have wanted for -- this is something all 11 of us have wanted for several years. hopefully, this legislation will bring the momentum and political will we need from our community and stakeholders and businesses to carry the legislation forward on the ballot to our voters in 2012.

i think there is hesitation to bring this reform to the ballot because we are not sure what the political will will be. hopefully this will do that. second, i want to point out the unique nature of these midmarket corridor. we are not doing any rezoning. we are not changing the character of the neighborhood. it was always intended for large commercial use. that is why we have large commercial real estate. 3 million square feet of commercial real estate. frankly, this area has been in desisting 1960's. for the past 60 years, we have maybe not made any attempts, and what we have seen is the same thing we have seen, and i would doubt any constituent from any district would doubt that this

was not a unique place. the citizens of sanford says go across the city want to see -- san francisco across the city want to see a revitalized midmarket, not just the residents of district 6. whether you agree with this legislation, a lot of thought did go into it. we attempted to make it as specific and targeted as possible. we put a time limit on it. once the market has grown and been activated, the businesses will have grown and activated through the tax exemption, and in that six or eight years' time, they will begin contributing back to the city, having also contributed back to the midmarket. it is not a blanket tax exemption. it is on net new jobs.

i was very concerned about cities -- companies moving into this part of the city just to get the tax exemption. you are not going to hire another employee, you are not going to hire one to 5 new employees just to do that. i do not think we will see that. not many companies are growing at this rate in san francisco. that is why this legislation is targeted to our large growing businesses. i share the concerns of my colleagues. i want to make sure we are revitalizing corridors around san francisco. i have concerns are around south beach as well. this is for large and growing businesses that are appropriate to be in the midmarket. i want to