When the ‘Twitter tax break’ took effect eight years ago, it was intended to draw tech companies to rundown Mid-Market Street and lead to a neighborhood revitalization. Did it succeed?

About the series Eight years ago, San Francisco city leaders offered a tax break to draw companies to the Mid-Market neighborhood. That tax break expires on May 20. To mark its end, this Chronicle package looks at the evolution of the street, the impact on commercial and residential real estate, and the benefits that flowed — or didn’t — to the city and its people.

On a Monday morning in March, Huckleberry Bicycles co-owner Brian Smith arrived at his Market Street store to find medics removing a body from Stevenson Street, the alley behind his business.

Usually, unconscious people found in the alley are suffering from heroin or fentanyl overdoses — sometimes fatal, often not. But the emergency medical technicians told Smith this one was a suicide — the guy had jumped from a roof while being chased by police.

Five minutes later, before the first customer had walked through the door, an incoherent, screaming woman started smashing bottles on the sidewalk out front. A few yards away, EMTs tended to a cyclist who had just been hit by a car. None of these episodes were unusual in Smith’s Mid-Market neighborhood, but it wasn’t how he’d hoped to start his week.

“It was a Monday morning, and I just thought: ‘I’ve got to get out of here. I’ve got to get my employees out of here. This is not right, not normal.’”

Smith and his partners hadn’t always been so down on Mid-Market — quite the opposite. They opened Huckleberry between Sixth and Seventh streets in June 2011, just after the Board of Supervisors approved a measure commonly called the “Twitter tax break.”

The late Mayor Ed Lee had bet the tax break, which erased the 1.5% payroll tax for companies that moved into certain Mid-Market buildings, would keep tech jobs in the city and help revive seedy Central Market Street. At the time, half the area’s offices and 30% of the retail shops were empty, according to city data.

Filling vacant buildings with creative tech startups, Lee reasoned, would attract hip, independent retailers like Huckleberry, finally ushering in the Market Street revival that had eluded San Francisco mayors since the 1970s.

In 2013, when Huckleberry expanded into an adjacent retail space, Lee showed up with TV cameras in tow to boast about neighborhood improvements.

“We’re on the move,” the mayor said. “This is all for real. No more talk.”

Huckleberry co-owner Zack Stender agreed, saying Mid-Market was “becoming a more pleasant place” to do business.

“The street is cleaner, and we are seeing a huge influx of customers,” Stender said at the time. “This will become the grand boulevard that it was supposed to be.”

These days it would be a stretch to call Central Market Street a “grand boulevard.” Even after billions of dollars of investment has filled vacant office buildings with 10,000 new jobs, revived historic structures and generated 4,000 new housing units, Mid-Market business owners say the street is more problematic than ever and remains marred by crime, drugs, garbage, vacant storefronts and stalled development projects.

Still, eight years after the tax break went into effect and days before it ends on May 20, there is no doubt the area has seen changes both obvious and subtle, good and bad.

Buildings that were empty or underused are bursting with workers at Twitter, Zendesk, Match.com, Uber, Square, Dolby and other companies.

From Fifth Street to 10th Street, historic but dilapidated buildings were given new life. The Western Furniture Mart at 1355 Market St., empty since 2008, was reborn as Twitter’s home. The Eastern Outfitting Co. Building at 1019 Market St., a steel-and-glass facade framed by polished, white Corinthian columns, is now Zendesk’s headquarters.

The Strand Theatre at 1125 Market St. became a $34 million venue for the American Conservatory Theater. A flatiron building at Market and McAllister was transformed into the Proper Hotel, while across the street, the long-vacant Grant Building has been reborn as an outpost of the tech-centric Yotel chain.

San Francisco Heritage Executive Director Michael Buhler said that while he is ambivalent about the “social impacts” of the Twitter tax break, it was a blessing for “multiple historic buildings that have been languishing for decades.”

“Buildings that had been shuttered and fenced off for years are now open to the street and have pedestrian activity,” Buhler said. “They are important anchors for the neighborhood going forward.”

The Central Market revival also spurred housing development. Builders created thousands of units on or within a block of Market Street, starting with NEMA, the dark glass high-rise at Market and 10th streets that added 754 units to a vacant corner lot.

On the north side of Market, Emerald Fund converted an empty office building at 100 Van Ness Ave. into 418 apartments and followed with another 582 units at 150 Van Ness and 101 Polk St.

Emerald Fund President Oz Erickson said much of the residential building wouldn’t have happened without the tax break.

“I think it was incredibly important,” Erickson said. “We did 1,000 units there that would not have gone ahead if NEMA hadn’t gone ahead. And NEMA wouldn’t have gone ahead if Twitter hadn’t happened.”

The narrative of gentrification casts the evolution of trendy cities as a one-way street. Housing gets more expensive. Empty lots and underused buildings are developed or converted into lofts or creative office space. Well-paid workers replace those making minimum wage. Watery $1.50 coffee is replaced by fancy $5 coffee. Crime goes down and policing goes up. Grungy streets turn into welcoming boulevards.

But the story is different along the Mid-Market corridor, business owners and residents say.

Despite billions of dollars coming into the neighborhood, retail vacancies plague the street. Thirty months after it was completed, a new 250,000-square-foot mall between Fifth and Sixth streets, branded 6X6, sits vacant, the victim of rising construction costs and apprehension over the drug use, homelessness and filth on the street, its developer said.

Longtime residents and business owners say more drug dealers work the area now than six or seven years ago. Men with wads of cash in hand crowd the corners at Eighth and Market, and Hyde and Golden Gate, openly selling heroin, meth and crack.

Muklis Marta, who has owned World of Stereo for 33 years, said he will depart before his lease expires at the end of 2020. His shop’s entrance at Market and Jones is a convenience store for pot dealers, who have little reason to fear police now that their product is legal to possess.

“They talk bulls— to the police, and the police are afraid to answer back,” Marta said. “They fight all the time. Three times they have broken my windows during fights.”

Every evening around rush hour, men with backpacks congregate in front of the Proper Hotel, hawking stolen laptops, phones, clothing and bicycles. The activity moved from nearby United Nations Plaza about six months ago when the police parked a mobile command center there.

“Everything just got pushed right in front of the hotel,” said Alex Samek, a principal with Kor Group, which owns the Proper. “You can’t even walk down the sidewalks. It’s completely taken over. They are not afraid of the police.”

While the trendy Proper averages a 4½-star rating on TripAdvisor, reviews point out that the environment outside is “sketchy,” “seedy,” “dangerous” and “undesirable.”

“If you sit in that lobby and listen, it’s very rare that someone doesn’t comment about the neighborhood,” Semak said. “It’s a daily battle out here.”

Dealing with seemingly dangerous behavior is expensive: The Proper spends $400,000 a year on security. ACT’s Strand Theatre, a two-minute walk away, spent $127,000 last year on security guards, who escort theatergoers back to their cars.

Chris Foley, who runs Market, a 35,000-square-foot food and retail hall in the Twitter headquarters building, estimates the combination of security and “shrinkage” — shoplifting — costs at least $750,000 a year.

It’s not just for-profit businesses that feel the need to pay for extra security. The Lighthouse for the Blind, which moved from Van Ness Avenue into 1155 Market St. in 2016, spends $250,000 a year to station an off-duty police officer in front of the building.

Most of Lighthouse’s 3,000 clients and 140 staff members use the BART entrance right outside the office near Eighth Street. But a stairway clogged with people smoking, shooting up or nodding off is tricky for a blind person to navigate, Executive Director Bryan Bashin said.

“We moved here because of the transit, because of BART,” Bashin said. “Now we have transit at our front door, but our clients emerge from that transit in a cloud of meth smoke.”

Others who do business in the neighborhood have mixed feelings about Mid-Market’s changes. Jeannie Kim opened Sam’s Diner in 2006. For the first three years, “It was a ghost town,” she said.

But in January 2009, the musical “Wicked” took up residence at the Orpheum Theater, beginning a run that would extend to 660 performances. Before “Wicked,” Sam’s had been open for breakfast and lunch, but the crowds from the play convinced Kim to get a beer and wine license and stay open for supper.

“My customers were against it,” Kim said. “They said, ‘Jeannie, this is a rough neighborhood, nobody is going to come here at night.’ I said, ‘I’ll do it for at least three months.’ I wasn’t looking to make big money but I was a single mom with three young kids to support.”

It worked. Three months has turned into 10 years.

About 40% of Kim’s trade now comes from neighborhood theaters. Actors, tech crew, office staff and theatergoers become “temporary family members” for as long as a show is in town. Signed posters from dozens of productions — “Hamilton,” “Mamma Mia,” “Jersey Boys” — line Sam’s walls.

There’s more business from the Strand, where 210,000 people have attended shows over the past four years. In 2017, the nearby Golden Gate Theater underwent a year-long renovation. At the time, Greg Holland, CEO of producer SHN, explained that the promoter “saw Mid-Market start to take off in a new way and ... felt the happy obligation to keep pace.”

Still, Kim said her business would be a lot healthier were it not for the illegal activity on her block. She supported the Twitter tax break because it was supposed to make the sidewalks cleaner and safer, but it hasn’t worked out that way.

“More people walking on the sidewalk gives you the illusion of it being safer,” Kim said. “But the reality is the drug problem has gotten worse and worse.”

Joy Ou, president of developer Group I and an early champion of the Mid-Market dream, said she believes the key to safe sidewalks is affordable retail space. In 2012, Ou bought the then-vacant Warfield Building at 988 Market St., spending $6 million on renovations and eventually attracting tenants like Match.com, Artis Capital Management, Benchmark Capital and Spotify. The latter recently decided to move after an employee was slapped outside the building.

While the tech tenants upstairs pay full market rents, Ou hand-picked retail tenants based on their ability to generate foot traffic and enliven the sidewalk in a positive manner. Ground-floor space that had been vacant for more than a decade is now full — Popsons Burgers, Equator Coffee and Waystone, a bistro and wine bar, all do a brisk trade.

She sees Mid-Market retail as a trade off — to get “ground-floor activation,” rents need to be below-market.

“That is the only way to do it in Mid-Market,” she said.

But how well Ou’s gamble will pay off is an open question. In 2018, she started construction on 950 Market, which is to have 242 condos, a 232-room boutique hotel, three restaurants and a performance space for Magic Theater.

Ou said her Taiwanese investors — who had already committed money to the $350 million project but had not visited the site — were taken aback at the number of drug users, homeless and mentally ill people on the street.

“I really didn’t know how to explain to them what is happening, except to say there are a lot of people working on the problem,” she said.

Ou said investment in the arts in the neighborhood is crucial to the Mid-Market turnaround.

The city’s effort to strengthen the area’s theater and arts scene coincided with but was overshadowed by the Twitter tax break, said Dan Williams, executive director of PianoFight, an entertainment venue in the old Original Joe’s space a block and a half off Market on Taylor Street that produces between 20 and 30 shows a week.

The city provided technical assistance and funding to Exit Theatre, Luggage Store Gallery, Gray Area Foundation for the Arts, Boxcar Studios, Burning Man, Hospitality House Community Art Program, SF Camerawork and PianoFight.

“You have the full spectrum of offerings,” Williams said. “You’ve got the Golden Gate and Warfield, which bring big touring acts — Broadway stuff, shows from London. And a stone’s throw away you have PianoFight, which fully supports the indie, local theater cause. And the Exit, host of the first Fringe Festival outside of the U.K.”

He said a strong arts community has emerged at the east end of Mid-Market and the Tenderloin, with 13 stages within two blocks of PianoFight.

The city’s focus on Mid-Market, and efforts to lure tech companies there, was part of the pitch he and his partners made to investors. And it paid off: The area’s tech workers are PianoFight’s customers, and their companies hold events and happy hours there.

“Without tech our business would be far worse off,” Williams said. “What were they going to do with Mid-Market? What were they going to do with those buildings? Was it better to have boarded up buildings and nobody there?”

Even as the theater scene has bloomed and renovated buildings at the west end of Central Market Street have filled with new tenants, progress has been slower at the east end of the corridor. That is about to change.

After years of delays, two of Mid-Market’s biggest developments, Group I’s hotel and condominium project at 950 Market St. and Shorenstein’s 304-unit rental housing project at 1066 Market St., are finally under construction. This summer, Tidewater Capital Management will start digging on a third project, a 186-unit rental complex at 1028 Market St.

The trio of modern buildings will add more than 1,000 residents and eight to 10 new restaurants and retailers to the stretch of Market between Fifth and Seventh.

Back in 2012 and 2013, the assumption was that all the major developments would be long since built and occupied by now. The same was expected for the Better Market Street plan, a $250 million project to improve the street for biking and walking. Originally scheduled to be under construction by 2013, it is now set to start next year.

Instead the projects were bogged down for years, first caught up in San Francisco’s famously political and exhaustive approval process, and later delayed by rising construction costs.

“Yes, it’s taken more time than anyone thought,” Tenderloin Housing Clinic Executive Director Randy Shaw said. “Here we are in 2019 and we are not where we thought we would be. But Joy Ou is under construction. Shorenstein is under construction. By 2022, Market Street is going to look dramatically better.”

But 2022 will likely come too late for the owners of Huckleberry.

The bike store has about two years left on its lease, and Smith said he will likely leave Mid-Market then, if not before. Business is down 50% from 2015. The staff has been cut by the same amount.

While some of that is fallout from the rise of bike-rental apps, the conditions on Market Street don’t help.

“Most people who have been here for a while think it’s gotten worse,” he said.