Billionaire Elon Musk says Twitter – the social media company he’s within the midst of rebranding as “X” – will keep its headquarters in San Francisco despite the “doom loop” town is facing as big-name businesses head for the exits.
Musk, who led a gaggle of investors in acquiring Twitter that took the corporate private in a $44 billion deal last 12 months, tweeted Saturday that the corporate’s headquarters will remain in San Francisco despite receiving offers geared toward enticing the corporate to relocate.
“Many have offered wealthy incentives for X (fka Twitter) to maneuver its HQ out of San Francisco. Furthermore, town is in a doom spiral with one company after one other left or leaving. Subsequently, they expect X will move too. We won’t,” Musk explained.
“You simply know who your real friends are when the chips are down. San Francisco, beautiful San Francisco, though others forsake you, we’ll all the time be your friend,” Musk’s tweet concluded.
Elon Musk says the corporate’s HQ will remain in San Francisco despite town facing a “doom spiral.” Getty Images
San Francisco’s economy has suffered from an exodus of companies and residents in the previous few years, making a “doom loop” through which an area government enters a downward fiscal spiral as its tax base declines.
An urban doom loop involves a decline in employees present in offices in city centers, which ends up in businesses shrinking their office footprint and rental overhead.
The decline in demand causes real estate prices to fall, which in turn reduces property tax revenue while other sources of tax revenue, like sales tax, also take a success attributable to the reduced traffic in downtown areas.
Employees install a big X on the roof of the previous Twitter headquarters on July 28, 2023 in San Francisco, California. Getty Images
As the general tax base declines, it becomes harder for city governments to fund public services like law enforcement as they’re forced to make trade-offs that include things like budget cuts or tax hikes to stabilize their funds – each of which may drive more businesses and residents to depart if those policies have a negative effect on the economic climate or overall quality of life.
The growing popularity of distant work has accelerated that trend, decreasing the variety of employees heading to the office on a day by day basis because it becomes easier than ever for employees to live in suburban and rural areas without commuting.
The tech-heavy economy of San Francisco and criticisms of town government’s record on public questions of safety have made it a case study within the dynamics that drive urban doom loops.
Twitter is transitioning from its bird logo to a latest brand based on the letter X. Getty Images
In response to data from the Census Bureau, the population of San Francisco County declined by 7.5% from April 1, 2020, to July 1, 2022.
Industrial real estate firm CBRE released data in early July that showed that San Francisco had an overall office emptiness rate of 31.6% within the second quarter of 2023.
The CBRE report noted that within the last quarter “negative net absorption accelerated attributable to slow leasing activity, combined with a high volume of lease expirations and several other latest sublease listings.
This resulted in 1.83 million sq. ft. of occupancy loss, which increased the market-wide emptiness rate from 29.4% to 31.6%.”
Although Twitter isn’t relocating its headquarters, the corporate has sought to shrink its office footprint in San Francisco and faced a lawsuit from its landlord earlier this 12 months over unpaid rent – although the social media company has faced similar suits at offices in Denver, Oakland and London since Musk acquired Twitter and started a broad cost-cutting push to stabilize its funds.
Amid Twitter’s rebrand to X, city officials filed a criticism and opened an investigation into whether the corporate had the correct permits to put in an illuminated “X” atop its downtown headquarters.
Police had stopped the installation last week but later said there was a “misunderstanding” and that the incident was not a police matter.
City officials say a permit is required to vary letters or signs on buildings or to erect a latest sign on top of a constructing.
