Tax incentives for moving into blighted areas

May 10, 2011

Police officers stand near the scene of an underground explosion in the Tenderloin neighborhood in San Francisco, California June 5, 2009. REUTERS/Robert Galbraith

— Stephanie Rabiner is a contributor to FindLaw’s Free Enterprise blog. FindLaw is a Thomson Reuters publication. This article originally appeared here. —

One of the bigger stories out of San Francisco of late is Twitter’s planned move into the Tenderloin — a blighted area riddled with shuttered restaurants, graffiti, and crumbling facades.

Considering a move into the suburbs, Twitter managed to brokerage a deal with the city wherein it promised to move into the Tenderloin if the city would provide tax breaks.

While the majority of the debate in San Francisco was about gentrification, the fact of the matter is that sometimes, if it cleans up an area and increases safety, gentrification is a good thing.

It can also be good for business.

Twitter is a large company with a decent amount of pull, but that doesn’t mean that you can’t benefit from moving into a blighted area as well.

Cities and states across the country are trying to figure out how to increase economic development in areas that have been hit hard, and many of them are turning to tax incentives.

Some states, such as Missouri, have programs in place, while others leave it up to cities and counties to offer local tax abatements. There are credits for income and employee taxes, equipment purchases, and even insurance.

If you think that you might be willing to move your business into a blighted area, get in contact with your state and local redevelopment agencies.

And if there aren’t any programs, it doesn’t hurt to negotiate. Twitter did, and it netted the company a five year reprieve on city employee taxes.


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Twitter has been interested in moving to a building at 10th St and Market, an area commonly referred to as “mid-Market” (an area also included in the tax break debate), which would be a stretch to refer to as being in the Tenderloin. The mid-Market corridor does borders the Tenderloin further up the street and along with 6th St has been a target of revitalization efforts of various sorts by the city. None of which have had much of an effect on the state of the Tenderloin proper.

Posted by sfdudeman | Report as abusive

Tax incentives of all kinds to all kinds of businesses should be nationally prohibited. All it does is result in competition between states and cities over who can provide the most incentives for relocation to keep or attract a business at the primary expense of businesses not interested in relocating at all. Relocation within the U. S. is a zero sum game for the nation that only reduces the national sum total of tax revenue needed to maintain state and ocal services.

Low cost land acquisition used to be enough to prompt manufacturing, industrial,light industrial and wholesalers, while retailer simple need enough appropriate customers.

Besides incentive programs have a way of getting out of control. Colorado many years ago started enterprise zones in urban renewal areas with special tax breaks (on top of cheaper land and established utilities) and then they started covering virtually the entire, non-resisdential areas of the state. All a business needed to do was say I will move here if.

Posted by SeniorMoment | Report as abusive

Who in their right mind would invest in an American city?

In my hometown of Hartford, the “mill rate” is over 64 mills. That means that for every $1000.00 worth of property in the city I have to pay the tax thieves in city hall $6.40.

So if I were looking to build a small $10 million factory, the first diptard through my door would be the tax collector with a bill for some $600,000.00. FOR WHAT?
For the ‘privilege’ of foolishly investing in that ghetto?
My benefits?
A crime-ridden location.
Corrupt police and officials.
Illiterate workforce.
OSHA inspections and problems.
Union issues…
Additional taxes disguised as water use fees and sewer taxes…

No sane business person is going to put money into the Democrats’ welfare plantations.
That is why factories across America are being shuttered and new ones are not being built. They are being replaced with liquor stores, junkyards, crackhouses and Democrat voters living on Welfare and food stamps.

Posted by ObamaSucks | Report as abusive

By Blighted areas, do you mean the United States?

Posted by minipaws | Report as abusive

I hate to say it but I agree. I recently agreed to help my son invest in a dilapidated building in a southern city. We went through months and months of getting approval for renovating a home with a tarp on it for the prior 4 years! We needed approval from Design Review! It needed gutted.

We recently were cited for fixing a fence that was to keep my grand kids from falling over a retaining wall (12 foot drop)..>you see we need a “fence permit”.

We cannot paint the brick (even though the 90 year old brick work has wide unsightly cracks). We also had to purchase windows with “outside” mullions… adding 10 grand to the cost.

None of this would have occurred if we built a new home in the burbs.

Did I mention that the city tax is 1 1/2 times as high as the burbs? Also, we do not NEED a security system in our current “country home”. It is mandatory in the city!

By the way, the old mayor is in jail… and the city is fighting bankruptcy…

When will the CITY FATHERS “GET IT”?

Posted by tommy1951 | Report as abusive

Just another example of a broken government giving away money to the super rich.

Posted by M.C.McBride | Report as abusive

Blighted areas are blighted for lots of reaason and throwing more money at them is not the solution! When we shift scarce tax dollars to areas that are basket cases we create new blighted areas because of the redistribution of wealth! Reward those for making good choices and punish those that make poor choices-it’s the ONLY fair/equal form of government! Government can not be the great equalizer of poor decision makers! They must be allowed to fail! We don’t have the money to be everything to everyone!

Posted by DrJJJJ | Report as abusive

Mcbride: if we decide on less government than we give less money to the rich! How’s that sound! Vote for those that will most likely give us less government!

Posted by DrJJJJ | Report as abusive