Development or gentrification? Burning Man HQ relocates to Mid-Market
The Burning Man headquarters will relocate from Bayview-Hunter’s point to Sixth and Market streets. The official announcement coincided with the Board of Supervisors’ preliminary approval of legislation that will exempt businesses in the mid-Market area from paying payroll taxes on new hires, which would last 6 years.
Last month, Larry Harvey, founder and CEO of BM, claimed that he has been contemplating the relocation to mid-Market with or without a tax break. The goal is to facilitate art and culture by infusing Burning Man’s creative energy in an area that desperately needs urban revitalization. Burning Man currently has 30 employees and plans to hire more in the near future.
The larger debate is whether this revitalization effort, despite its intention to spur long-term economic development in the depressed mid-Market district, will lead to externalities such as gentrification and further income inequality. According to Greg Leroy in his 2004 book The Great American Job Scam: Corporate Tax Dodging and the Myth of Job Creation, taxes are not the primary factor in investment decisions. In fact, cost of labor and transportation account for 75% of the factors that drive business location decisions, while taxes account for less than 4%.
I think that this issue transcends the need for standard cost-benefit analysis, and is fundamentally a matter of fiscal priority and further discourse about what San Francisco’s definition of “economic development” is.