When Twitter launches its IPO on Thursday morning, company executives will be celebrating in New York City, but disgruntled neighbors in San Francisco will wake up early to protest tax breaks and rent increases they blame on the tech giant is responsible.
When trading opens at 9:30 a.m. EST on Wall Street, some San Franciscans will be meeting on Market Street at 6:30 a.m. their time.
The social media giant keeps getting more valuable. When Twitter first announced it would be going public, the share price was suggested at $17 to $20, but by Monday it had jumped to $23 to $25 --- valuing the company at $13.9 billion.
The protesters, who have aptly named their cause #ThrownOutByTwitter, charge that the tech giant is responsible for a variety of recent issues plaguing San Francisco after the company moved in. The city has used tax breaks and transportation modifications to lure Twitter to an area considered less desirable, which has now become a center for other startups on the rise. While the city defends its decision, which it says has boosted the economy, critics believe it has contributed to an inhospitable rise in rents and has caused a recent slew of evictions.
So far there have been just 18 tweets with the hashtag, but most of the discussion has taken place on Twitter’s rival, Facebook.
According to their event page, protesters will meet outside Twitter’s headquarters at 1355 Market St. at 6:30, then another rally at noon. At 5:45 p.m. they will meet at City Hall again.
“With widespread evictions, vital social services that are underfunded … the community at large asks Twitter and the other tech companies: What is your public offering to the people of San Francisco?” the event call reads.
In 2012, the city added a new bus route that goes through the area of Twitter’s office. According to the blog SfStreets, locals have dubbed it the “Twitter Bus” and the “Hashtag Express” since many view it was one of many efforts by the city to accommodate the company.
But the real issue at stake is city tax breaks for tech companies.
The company has a lease on the 1937 Art Deco building in the Mid-Market area that lasts until 2021, according to The New York Times.
Before Twitter moved in last year, the area wasn’t a particularly attractive one. Rental vacancies were high, and it lacked many amenities other more up-and-coming areas had. Consequently, the city imposed a tax incentive for companies looking to relocate there.
“You had a once vacant and blighted area that is now a gravitational center for some of the most innovative companies in the world,” Todd Rufo, director of the San Francisco Office of Economic and Workforce Development, told The New York Times.
The building is in the mid-Market Street payroll-tax zone. In a deal made in 2011, businesses located in the Central Market Street and Tenderloin areas are exempt from a 1.5 percent city payroll tax until 2017. Since Twitter moved in, other tech companies such as Spotify, Zynga, Yammer, Square and Uber have made plans to follow.
“The Twitter tax break provided exactly the right stimulus to keep valuable, high-paying jobs in San Francisco,” Oz Erickson of housing developer Emerald Fund told Bloomberg.
“If they hadn’t kept Twitter … we wouldn’t be enjoying this employment boom,” he said.
According to a report in the San Francisco Chronicle, the Central Market area office vacancy rate is now around 14 percent, down from 25 percent in the first quarter of 2011, before Twitter moved in.
Twitter currently pays $30 per square foot for 210,000 square feet of space. Mobile payment company Square is paying $39 per square foot, and transportation network company Uber will be paying $48.
The median rental rate in the city is $3,414 as of June 2013.
Protest organizers claim that the tech boom is responsible for raising rents in the city, and a consequent slew of recent evictions.
The Ellis Act is a California provisional law that allows landlords evict their tenants when they want to take their property off the rental market. According to an annual report from the city’s rental board, the amount of Ellis evictions has increased 81 percent since the second half of 2011.
This, according to the protesters, is mainly because of Twitter and the boom in tech companies taking over a once run-down area.
One of the event sponsors, POOR magazine added that their media visuals will include a “coffin with text ‘Death of San Francisco,’ death bell, banner, signs, placards of Twitter bird with ‘Gentrification, $Billions to Twitter $0 to SF’ written across it.”
As of this writing, there have been 19 total tweets with the hashtag #thrownoutbytwitter. According to the Facebook event, 95 people will attend the rally along with 29 who responded with “maybe.” There are 882 other people “invited.”
Kathleen is a money reporter at International Business Times with an eye on the Africa business story....