Tech sector loses champion in death of San Francisco mayor

[December 13, 2017]  By David Ingram

SAN FRANCISCO (Reuters) - San Francisco technology companies including Twitter, Salesforce.com, Uber and Airbnb lost an important ally on Tuesday with the sudden death of Mayor Ed Lee.

Lee courted the industry with tax breaks and helped fend off a backlash against the tech sector and the soaring rents and rising inequality it has brought to the city.

Lee, 65, a former tenants' rights lawyer and San Francisco's first Chinese American mayor, died with more than two years left in his term. The cause was a heart attack, local media said. The mayor's office did not confirm the cause.

As a champion of the tech industry, Lee arranged a major tax break for companies that moved into the impoverished Mid-Market neighborhood, a measure designed in part to keep Twitter <TWTR.N> in the city.

In 2014, he brokered a deal to let Alphabet Inc's Google <GOOGL.O> and other big companies use city bus stops for their private commuter buses, so long as they paid a modest fee. Street protesters had targeted the buses as a symbol of how wealthy tech workers were driving up rents and forcing long-time residents out of middle-class neighborhoods.

San Francisco's skyline was remade during Lee's tenure as the local economy soared along with the tech industry: a new skyscraper, the city's tallest by far, will house software firm Salesforce.com Inc <CRM.N>.

Lee also advocated a hands-off approach to firms such as Airbnb Inc, Lyft Inc and Uber Technologies Inc even as they faced political pushback and stiff regulations elsewhere.

Tech companies historically were mostly based in suburban cities to the south of San Francisco such as Mountain View, where Google resides, and Cupertino, the home of Apple. But in recent years many more firms - and the venture capitalists, lawyers and others who serve them - have opted for the city. Other San Francisco-based companies include Square Inc <SQ.N>, Yelp Inc <YELP.N>, Zynga Inc <ZNGA.O> and Dropbox Inc.

Lee's alliance with tech firms put him at odds with large blocs of liberal voters in the famously left-leaning city, where Lee faced savage criticism over the cost of housing and an influx of white, wealthy residents.

No mayor could have avoided that criticism, said Nathan Ballard, a Democratic political strategist who credited Lee with persuading tech firms to be more philanthropic.

"He'll be remembered for being very friendly to tech, but he wanted San Francisco to be prosperous and he presided over one of the most prosperous eras in San Francisco," Ballard said.

Lee justified his policies by pointing to a falling local unemployment rate.

"We have to work with the new jobs creators, and that's what I believe the public wants me to do," Lee told Reuters in an interview in 2012, the year after he won election.

San Francisco Mayor Ed Lee speaks during a news conference at city hall in San Francisco, California, U.S., January 31, 2017. REUTERS/Kate Munsch/File Photo

On Tuesday, after Twitter co-founder Biz Stone called Lee an "all around good guy" on the social network, one of the responses, from Twitter user @B34NS, was: "a 'good' guy if you're a millionaire who benefits from his tax breaks."

Lee, a longtime city bureaucrat, was appointed mayor in 2011 and won election later that year with the backing of the tech industry. Ron Conway, a venture capitalist, formed an independent political action committee on his behalf and raised almost $700,000 from executives such as former Facebook Inc <FB.O> President Sean Parker and Salesforce CEO Marc Benioff.

Conway in a statement on Tuesday praised Lee for caring "so deeply about the city and its people, about jobs and opportunity for young people."

Jane Kim, a member of San Francisco's board of supervisors, its city council, said she never doubted Lee's commitment to the poor and middle class, but that inequality nevertheless rose during his tenure and that his successor would need to do better.

"Our housing crisis is going to continue to be a top priority," Kim said in an interview. "We feel it by people leaving the city - feeling squeezed, feeling vulnerable to eviction."

A city-led survey found this year that the number of homeless had increased slightly to 7,499 people from 7,350 people in 2013.

London Breed, president of the board of supervisors, is serving as acting mayor. A native who grew up in a city housing project, Breed is allied with more moderate members of the city's fractious board of supervisors.

An election is set for June 2018 to fill the rest of Lee's term, which ends in January 2020.

One of the next scheduled items on Lee's agenda was a visit next week to the headquarters of software company Zendesk Inc <ZEN.N> to meet with its employees, something he had done before, Mikkel Svane, the company's chief executive, said in an interview on Tuesday.

Svane praised Lee for being accessible, and for not demonizing the tech industry as other politicians might.

"He never made a political agenda out of it. He just made things work. It's so easy to point fingers to this group or that group," Svane said.

(Reporting by David Ingram; Editing by Jonathan Weber)

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