Stock Option Payroll Tax Reform & Expansion of New Technology Firm to Central Market Highlight Success of City’s “Start Here. Grow Here. Stay Here.” Jobs and Economic Development Strategies
06/03/11— Today Mayor Edwin M. Lee announced two significant milestones in the City’s strategy to ensure that the technology industry continues to thrive in San Francisco. First, Mayor Lee signed legislation, introduced by Supervisor Ross Mirkarimi and co-sponsored by Supervisors David Campos, Eric Mar and David Chiu that reduces taxation of pre-IPO companies’ stock-based compensation for six years. This legislation, passed by the Board of Supervisors on May 24, 2011, will help ensure that growing technology companies are not unfairly penalized for success and leave the City because of San Francisco’s unique payroll tax policies.
In addition, Mayor Lee also announced that Zendesk, a San Francisco-based technology company which provides cloud-based help desk software, has signed a three-year, 16,000 square foot lease, with expansion rights, for a new headquarter office at 989 Market Street, in the Central Market neighborhood. Zendesk will be moving from its current SOMA location at 410 Townsend Street, where it employs 80 people. The move is expected to take place in early summer 2011, and Zendesk plans to hire more than 70 new employees this year.
“Today we are demonstrating once again that there’s no better partner to the technology industry than San Francisco,” said Mayor Lee. “Whether you’re a startup with a new idea or a fast-growing company about to go public, the center of the technology industry in California is shifting northward, and San Francisco wants you to start here, grow here and stay here.”
“The State of California can take a page from San Francisco’s partnership with technology companies like Zendesk, Zynga and so many others,” said Lieutenant Governor Gavin Newsom. “To compete with other states across this country and other urban centers around the world, California requires an aggressive economic development plan and strategies to nurture, grow and retain the innovative companies of tomorrow and the millions of jobs they create for Californians.”
“San Francisco has a well deserved reputation for innovative legislation that protects and promotes the environment, Civil Rights, and the arts – to name just a few,” said Supervisor Mirkarimi. “The law signed today is an imaginative step in a new direction: fostering creative and emerging businesses that will serve as the foundation for the City’s future economy.”
“San Francisco’s business payroll tax, the only one of its kind in California, is a real disincentive to job growth, and this stock option exclusion incentivizes growth for our already thriving technology businesses,” said Board of Supervisors President Chiu. “We are taking substantive steps to build a better 21st century economy in San Francisco.”
“Under the leadership of Mayor Lee, the Board of Supervisors and former Mayor Newsom, San Francisco continues to demonstrate its commitment to being a full partner to technology companies at every stage of growth,” said Zynga CEO and Founder Mark Pincus. “On behalf of all our employees who live and work here, Zynga looks forward to making San Francisco our home for years to come.”
“Zendesk was founded in Denmark and moved to San Francisco in 2009,” said Zendesk CEO Mikkel Svane. “We have been humbled by the wonderful way we have been welcomed to this city. In return, we are proud and happy to help revitalize the Central Market neighborhood. When we began to outgrow our current space we were so fortunate that San Francisco had bold and visionary plans for the Central Market area. All of us at Zendesk are proud to be citizens of a city that has the vision and ability to execute on making San Francisco a better place to live and work.”
Zendesk is the leading provider of proven, cloud-based help desk software. For growing organizations, Zendesk is the fastest way to enable great customer service. More than 10,000 Zendesk customers, including Adobe, MSNBC, Sony, OpenTable and Groupon, trust Zendesk with their most valuable asset, their customers. Founded in 2007, Zendesk is funded by Charles River Ventures, Benchmark Capital and Matrix Partners. For more information, go to www.zendesk.com.