San Francisco’s relationship with Twitter, now rebranded as X, is drawing to a close. Once a symbol of the city’s tech-driven renaissance, the social media giant is preparing to shutter its headquarters in the city’s Mid-Market neighborhood. This move marks the end of a significant chapter in the city’s tech history, as Elon Musk shifts the company’s remaining workforce to offices in Palo Alto, San Jose, and ultimately, Texas. However, San Francisco city officials are far from heartbroken over this departure.
The story of Twitter’s presence in San Francisco began with high hopes and ambitions. Founded in the city in 2006, Twitter quickly became a darling of the tech world. By 2011, the company was threatening to leave San Francisco for Brisbane, a smaller town just south of the city, to escape payroll taxes. In a bid to retain the burgeoning tech giant and address the economic slump caused by the lingering effects of the Great Recession, then-Mayor Ed Lee proposed the so-called Twitter tax break. This deal exempted companies in the downtrodden Mid-Market area from a 1.5% payroll tax on new hires, with the hope that these companies would bring jobs and revitalization to the crime-ridden neighborhood near City Hall.
Twitter’s move to 1355 Market Street seemed to pay off initially. The company’s workforce expanded from a few hundred to thousands, and the surrounding area saw an influx of other tech companies, including Uber, Square, and Zendesk. Luxury apartments and upscale eateries followed, contributing to the city’s booming economy. However, the growth also exacerbated the city’s already severe housing crisis, and the anticipated economic spillover into local businesses never fully materialized. Many tech companies, including Twitter, provided free meals to their employees, which kept them from spending much at nearby establishments.
The Pandemic and Musk’s Takeover: A Perfect Storm
The pandemic dealt a severe blow to San Francisco’s office-centric economy, with Twitter’s Mid-Market headquarters becoming a ghost town as employees were allowed to work from home indefinitely. Elon Musk’s $44 billion acquisition of Twitter in 2022 only accelerated the decline. Musk’s drastic cost-cutting measures, including massive layoffs, and his controversial leadership style, which included clashing with local officials and erecting a giant, flashing “X” sign atop the headquarters, alienated many in the city.
Musk’s recent decision to relocate X’s headquarters to Texas is seen by many as the final nail in the coffin. Citing San Francisco’s tax policies and what he perceives as the city’s inhospitable political climate, Musk made it clear that his company’s future lies elsewhere. However, San Francisco’s officials seem unfazed. The city’s Chief Economist, Ted Egan, noted that X’s impact on the local economy had already diminished significantly, making the company’s formal exit largely symbolic.
San Francisco’s Future Beyond X
As X prepares to leave, the Mid-Market neighborhood it once anchored is left with a 46% office vacancy rate, reflecting the broader challenges facing downtown San Francisco. While Mayor London Breed expressed a desire to maintain good relationships with local CEOs, she made it clear that the city would not bend over backward to accommodate companies like X. For many, the departure of X represents the end of a turbulent relationship, one that had long since lost its luster.
In the end, X’s departure from San Francisco is not just the end of a business deal, but the closing of a chapter in the city’s evolving identity. The city, once eager to cater to tech giants, now appears ready to move forward, less willing to compromise its values for the sake of corporate loyalty. As San Francisco looks to the future, it does so with the knowledge that while tech companies may come and go, the city’s resilience remains.