Newsom also lauded new Controller’s report that shows biotech tax exemption and initiatives have been critical to industry’s growth in San Francisco

02/02/10 – Mayor Newsom today spoke in support of a biotech tax measure described during his recent State of the City address and introduced at the Board of Supervisors by Supervisor Michela Alioto-Pier. The measure, which aims to extend the City’s biotech tax exemption, has not been scheduled for a hearing by the Board of Supervisors.

“The City’s future is tied to innovation-driven biotech firms,” said Mayor Newsom.  “Companies like Prosetta, and Nektar are locating and creating jobs here because we invested in biotech several years back.  We need to do whatever it takes to continue the expansion of biotech in San Francisco and an extension of the Biotech Payroll Tax exemption will help us do it.”

Currently, the Biotech Payroll Tax exemption is in effect from 2004 to 2014 and is available to a qualifying biotechnology company for a total of 7 1/2 years.  However, because the exemption sunsets in 2014, a new biotechnology business that moves to the city today can only take advantage of the exemption for 4 years.   The proposed measure would create a rolling sunset provision and allow any qualified biotechnology business to take the full 7 1/2 exemption so long as they initially apply and qualify for the exemption before December 31, 2014.

A recently released Controller’s Office report on the Biotech Payroll Tax exemption noted that the exemption, along with other biotech initiatives the City has implemented, have been critical to the extraordinary growth San Francisco has seen in this industry over the past 6 years.

The report states that in 2000, San Francisco had only 1.3% of the total life sciences occupied building base in the Bay Area. This figure did not begin to rise until 2005, after the exemption went into effect in September 2004. Today, the percentage has risen to 6.1% of the regional total – a nearly a five-fold increase over 2004.   Estimates suggest there could be 2,750 life science jobs in San Francisco, up from only 500 in 2004.

In addition, the number of biotech companies in the City has increased from 2 in 2004 to 56 today.

The event today was held at Prosetta Bioconformatics to highlight that they are hiring San Franciscans, particularly City College students who’ve completed the Bridge to Biotech program.  They currently have 10 interns from City College and have hired 5 City College graduates as full-time employees.  15% of the company’s entire workforce are graduates of City College’s biotech program.