DRIVING THE DAY: Vice President Kamala Harris will name Minnesota Gov. Tim Walz as her running mate, three people familiar with the decision told POLITICO this morning. By choosing Walz, Harris is elevating a Midwestern governor, veteran and former schoolteacher to help shore up support among blue-collar, white voters in the Rust Belt. Walz, 60, led a progressive overhaul of Minnesota during his second term as governor, when Democrats took full control of state government in 2023 — a template for what Democrats hope to do nationally. THE BUZZ: NOT QUITE TEXAS — Elon Musk is taking his talents to the South Bay. Mere weeks after Musk threatened to relocate operations for his social media platform X to the Lone Star State, employees in the company’s flagship San Francisco office learned they would be moving to existing offices in San Jose, according to an internal email first reported by the New York Times. The company will also open an engineering-focused office in Palo Alto, the email said. It’s not even close to the slam against California that Musk had originally telegraphed when, expressing his outrage over a new law to protect the privacy of LGBTQ+ students, he vowed to move the social media platform and SpaceX to Texas. A spokesperson for San Francisco Mayor London Breed didn’t respond to a request for comment. Gov. Gavin Newsom, who has had his own online tussles with Musk recently, responded to the news with the social media equivalent of an eyeroll. In a statement, Newsom’s office said "We’re pleased to see that they’re opening a new engineering office in Palo Alto, and the transition to San Jose was already underway." Nevertheless, relocating X, formerly Twitter, from its longtime location in downtown SF marks a significant moment for the city that fought so hard to keep it there. It’s particularly acute now as the city struggles to fill office spaces that emptied out during the pandemic. Twitter first took root in San Francisco in 2006, but by 2011, the company, frustrated with the cost of living and doing business, was making plans to relocate to Brisbane. That’s when the SF Board of Supervisors and the late Mayor Ed Lee introduced the idea of a tax break, relieving Twitter and other tech companies in the mid-Market neighborhood of a 1.5 percent payroll tax in hopes of attracting jobs and revitalizing the area. San Francisco at the time was in somewhat dire straits. Unemployment was hovering around 10 percent and city leaders viewed tech as an economic lifeline. Jason Elliott, a veteran of City Hall who was working for then-mayor Lee when he championed the tax break, described the circumstances as “really challenging” when he spoke to POLITICO last fall. “[The tax break] wasn't about, sort of, tech sandboxing so much as it was a critical economic imperative to… bring jobs and keep jobs in the city,” he said. The tax break succeeded in keeping Twitter in San Francisco, and the company moved to its current location at 1355 Market Street. But when the incentive neared its expiration date in 2019, there was little appetite among city officials to keep it. For many critics on the left, the special treatment epitomized SF's overly solicitous stance toward an industry that inflated rents without doing its part for the city. "It didn't work," said Assemblymember Matt Haney, who was a supervisor at the time. "It seemed to work initially just to help Twitter with their decision whether to leave at that moment, but beyond that it didn't do a lot to keep companies or keep them in that area." Haney, who heads the Assembly’s Select Committee on Downtown Recovery, told Playbook that X leaving is certainly not a good thing, and that there's no denying San Francisco's downtown, like many cities, is struggling to bounce back from the pandemic. But the solution doesn’t lie in giving one-off tax breaks to corporations or trying to appease certain tech scions who may not agree with liberal policies, Haney said. He pointed to two city ballot measures coming up in November that could ease the tax burden on companies who want to do business in the city. It’ll take changes to the tax code, along with some basic quality of life improvements, to revitalize the city, he said. "San Francisco needs to be cleaner and safer, with better infrastructure and more housing," Haney said. "All of these things go together." | 
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