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The New Gold Rush: What impacts are tech companies really having on the mid-Market district?

Del Seymour makes sure to take everybody on his walking tours of the Tenderloin to the corner of Turk and Taylor.

“I lived on this street,” he says. “I didn’t have an address but I lived on this street if you know what I mean.”

I’m with a group of a dozen tech workers following Seymour around the neighborhood, listening to him talk about his experiences here.

“I got trapped in the Tenderloin, actually I trapped myself,” he says. “I lived in a cardboard box for a couple of years. I was running girls on this corner for many years. I did everything you could think of in the Tenderloin.”

It’s important for Seymour to talk to these people. Their companies have moved into the Tenderloin in the last three years, and he’s telling them about the importance of being good neighbors. He points out Twitter, Zendesk, and other tech companies that are new residents.

Chelsea Ashton moved to San Francisco in February to take a job at Zendesk.

“You know like the neighborhood can be slightly intimidating to someone who’s not from here and walking around to get lunch,” she says.

Zendesk was one of the first to jump on the mid-Market tax break, moving into an old furniture and carpet store at 9th and Market streets in 2011. Now, the company suggests all of its new hires follow Seymour around for a day, within the first few months of getting a paycheck.

“I’m personally on it to just to kind of get a better feel of the neighborhood because sometimes fear comes from ignorance,” Ashton says.

This area used to be a thriving commercial district in the mid 1900s. It became a place, though, that tourists avoided for decades, before the recent tech revival. Now, it’s somewhere in between. Zendesk’s hip new building is surrounded by a discount clothing shop on one side, and two boarded-up buildings on the other.

A contract with the city

The tax break that helped draw so many companies to the mid-Market area has saved them a lot of money. Twitter, for example, will save an estimated $22 million over six years. In exchange, the six biggest companies had to sign Community Benefit Agreements, or CBAs: contracts with the City that show how they’ll contribute to their new neighborhood.

Zendesk has taken the CBAs and made them a big part of their company’s mission.

“You hear about tech culture and it’s all about happy hours, and big go-karting, and big bouncy ball houses. And with us it’s community service,” says Tiffany Apcynski, Zendesk’s director of social responsibility and public affairs. Her job was created specifically to make and manage the company’s CBA.

“The biggest thing we wanted to do right away was not be in an ivory tower. We didn’t want to move into the neighborhood and lock our doors, stay in here, and not go out in it,” she says.

Apcynski records the hundreds of hours Zendesk employees spend volunteering in the neighborhood; the money they spend in local restaurants. At a community meeting last month, where their CBA was literally applauded, she noted those and a new app the company is building to help homelessness.

“Their CBA mentioned a lot of specific targets, specific goals,” says Peter Masiak, the chair of the Citizen’s Advisory Committee, or CAC, for the mid-Market area. “It was really just a thorough document that they produced and just an ongoing commitment.”

The advisory committee is made up of nonprofit workers, business owners and neighborhood residents – all appointed by the city. They apply pressure on companies to make sure they truly accomplish the goals in their CBAs.

“It’s basically just trying to get these tech companies moving into the mid-Market area to be good neighbors, to actively engage with the community, and to help deal the potential negative issues around displacement, crime, quality of life that may arrive from their presence,” Masiak says.

Take Twitter, for example. It’s CBA includes everything from donating tweets worth thousands of dollars to giving free legal assistance to nonprofits. Soon after moving to its new building at 9th and Market Street in 2012, Twitter’s editorial director Karen Wickre told KALW she wanted to ramp up what they were giving back.

“We intend to do more. We want to do more. We will be doing more. I just don’t know what form it all takes, and I don’t know if it’s one kind of thing or another. It may be a mix of things that we do over time,” she said.

Vague promises

By the end of 2013, Twitter had done some things. It donated $75,000 to nonprofits. It installed wireless at a school. And hundreds of employees volunteered at local organizations. The company also went public, and it’s now worth around $25 billion. That kind of value makes citizen’s advisory chair Peter Masiak want to reconsider the company’s original community benefits agreement.

He takes out Twitter’s CBA from 2013 and flips through some of its promises, like how the company said it would work with community nonprofits and SFUSD to obtain the clearance needed to allow employees to volunteer at schools.

“It didn’t actually say that employees would volunteer at schools. The only thing they were doing was encouraging, allowing them to gain the clearance to allow them to,” he says.

Last month, Masiak and the committee decided Twitter hadn’t done enough. They felt the same way about Yammer, Spotify, Zoosk, and One King’s Lane. Masiak says some just didn’t get their paperwork together.

“A lot of the other ones had really unclear, vague goals that were very difficult to measure,” he says.

But, he laments, the citizen’s advisory committee’s opinion didn’t ultimately matter to the city.

“It was a symbolic vote; the city did go ahead and approve them all, he says. “Zendesk was the only one that we supported.”

Supervisor Jane Kim represents the mid-Market and Tenderloin areas. She says the difficult part about the CACs is that they are purely advisory.

“We set it up so that the community would have a medium to have a voice in the process, but we were not actually able to grant them any more authority than that. The city administrator is the ultimate decider,” she says.

Kim says they’re still working to sort out the rules governing the tax breaks.

“I think what's tough is that there's the in-between area where there’s disagreement about whether their commitment is strong enough. Our office is committed to supporting a stronger process,” she says. We acknowledge that the process hasn't been good the last two years.”

Twitter has added some specific goals in its agreement for 2014: $10 thousand for homeless services; a $30 thousand tech scholarship. But citizen’s advisory committee chair Peter Masiak says the vague goals that actually involve interacting with the neighborhood haven’t really been clarified.

“When a goal is as vague, or as low level as encouraging or obtaining clearance to allow people to [do something], it really makes it difficult to accurately evaluate success,” he says.

I reached out to Twitter, and the other companies who submitted CBAs, for an interview, but they did not make themselves available before our air date. In fact, the official job of managing Twitter’s community benefit agreement remained unfilled from December to March.

Bigger issues of displacement

The bits and pieces that make up the CBAs aren’t the biggest concerns, though, for many longtime residents of the city’s new tech corridor. They’re more worried about displacement.

Back on the tour on the corner of Jones and Golden Gate, Del Seymour points out a lot of specialized housing units and notable nonprofits to the tech workers. He tells them that many residential hotels in the Tenderloin are actually protected by rent control, but surprisingly there isn’t any rent control for nonprofits.

The most visible and successful nonprofits, like Saint Anthony’s and Glide Memorial Church, are getting dollars and volunteers from tech companies. But others are struggling, like a mental health clinic on Golden Gate Avenue, a few blocks away from Twitter and Zendesk.

Cindy Gyori is the director of the Tenderloin Outpatient Clinic. It’s provided mental health services to about 1200 people in the neighborhood annually for the past 40 years. Next year the clinic’s rent is going up and Gyori says they can’t afford it. Gyori says even in the Tenderloin, it’s hard to find affordable space.

“We discovered that a lot of landlords don’t want to rent to a nonprofit. The cost per square foot is prohibitive – they think that they’re gonna get some tech industry in there and charge higher rent,” she says.

But, she adds, for the sake of the people who live in the neighborhood, the clinic needs to stay.  

“Imagine the Tenderloin with no mental health services, because that’s a risk,” she says. “You have the clients, they’re not going anywhere because you have all those SROs.”

Those are Single Room Occupancy hotels, where low-income residents live and rely on the neighborhood’s food, shelter, and services.

“We’re in jeopardy in not being able to provide those services because we have no place to go. We’ll be as homeless as many of our clients,” she says.

Gyori tells me she hasn’t received any attention from the tech companies who’ve moved in down the street.

“I hear a lot about plans, but nothing is coming to roost for our benefit yet.”

Gyori thinks that this is because it isn’t as attractive to support people suffering from mental health or substance abuse.”

“You might see an article in the paper paying lip service to it, but it’s more difficult for us to make the public aware and want to support those services than it is if we had cute cuddly people, kids, arts, and music, or whatever. The word really, really needs to get out,” she says.

More than a paper document

The final stop on Del Seymour’s tour is the Cadillac Hotel on Eddy Street. It was the first SRO west of the Mississippi, and it’s a five-minute walk from Zendesk.

Seymour sits the dozen tech workers down in the lobby. One asks what would best help the people they’ve seen on their tour.

“We don’t want to sell dope on that corner. But we can’t go to Twitter,” he responds. “Our kids on that corner, they can learn how to code. Teach us how to code! People ask me, ‘What can I do?’ Teach us how to code. The only difference between you and that girl on the corner: you can code.”

Right now only CBAs for Zoosk and Zendesk make it clear they offer direct coding opportunities for youth in the area. Seymour explains real changes like that – like teaching kids to code or actually establishing affordable nonprofit space – aren’t going be easy. And they’re going to take more of an investment than is currently being required by the city.

But if done right, the CBAs will be more than just paper documents. They’ll actually allow companies to embrace their new neighbors, and the community to embrace them back.

This story originally aired on April 4, 2014.