Salesforce’s $110 million, 25-year deal to hang its cloud-shaped logos all over the Transbay Transit Center is a good deal for San Francisco — but the city might be leaving money on the table.
The homegrown tech titan may owe the city up to $5 million in taxes for the exclusive naming and signage rights agreement with the Transbay Joint Powers Authority. But records appear to show the company’s brand takeover of the $4.5 billion, four-block-long bus and train hub has escaped city property tax rolls for the past few years.
“Salesforce gave millions to have their name on the Transbay [Transit Center],” said John Farrell, a former assistant assessor. “That’s subject to tax. They’re benefiting from having their name on a publicly owned building.”
Salesforce might be on the hook for “taxable possessory interest,” the property tax on the private beneficial use of publicly owned property. In other words, businesses that advertise on public property have to pay tax on the value they derive from it, on top of the fee they pay to rent it. Boaters with slips at Fisherman’s Wharf, concessionaires on the Embarcadero, and the Outside Lands music festival in Golden Gate Park all pay the tax — as do the businesses located in the transit center. But an assessment for the naming rights doesn’t appear on the property tax roll, a review of city records indicates.
Depending on the calculation used to determine the valuation, Salesforce, which made $4.1 billion in profit in its most recent fiscal year, might owe the city as much as $1.3 million per year, Farrell said. So far, that’s about $5 million for the past four years, but over the course of the 25-year contract, that could mean the city is leaving $32 million on the table. (If an assessment were levied, the company could appeal it and pay less.)
It’s unclear whether San Francisco ever appraised the naming rights. If so, it may have determined the value was too low to add to the tax rolls. But that’s not clear from the records, and the assessor-recorder’s office said it can’t talk about it.
Last year, Salesforce paid $3.47 million for the naming rights to Transbay Transit Center, and is expected to pay $3.59 million this year to the TJPA, a conglomeration of the City and County of San Francisco and several Bay Area transportation agencies. However, the naming rights are missing from the TJPA’s annual possessory interest report.
The agency contends that only its leaseholders, such as restaurants, should be included.
“The naming rights agreement does not pertain to ‘possessory interest tax’ as Salesforce does not have private use of our facility,” TJPA spokesperson Lily Madjus Wu said. “All nonpublic rentals of any portion of the facility, including by Salesforce, are subject to the fees and requirements.” (Salesforce must pay for corporate events in the park and facilities separately — as any other user does.)
Farrell doesn’t buy that Salesforce’s naming rights aren’t a private use.
“They have the private use of the naming rights,” Farrell said. “It’s like a billboard.”
Salesforce did not respond to a request for comment.
Is the city aware that it might be leaving money on the table? The Standard reached out to SF’s assessor’s office, which is responsible for appraising properties for the purpose of tax collection.
Assessor-Recorder Joaquín Torres declined to be interviewed. In a statement, he said his office’s “duty is to fairly and accurately assess property in San Francisco as well as to protect confidential taxpayer information. … This generally requires that we withhold information about the treatment and assessed value of specific property interests that make up assessed value.”
Tax policy is baroque and confusing, but are there norms? The Standard interviewed half a dozen county assessors that work on naming rights — from Los Angeles, Alameda, and elsewhere. While none could speak about San Francisco specifically, they all echoed the sentiment of Santa Clara County Deputy Assessor Autumn Young. “There’s a private benefit to the company with the naming rights,” she said. “How that value is assessed is where the question is.”
One thing is for sure: Though the tax is a tiny percentage of the deal, when that deal is nine figures, even pocket change adds up.
Young should know. Her office worked to assess the San Francisco 49ers and Levi’s on the 30-year, $390 million naming rights deal for the city-owned stadium. In 2024, the assessed value was $88 million.
If in fact Salesforce isn’t being charged the tax (or if the city’s not being transparent about it), that wouldn’t be unusual for San Francisco. Farrell, the former assistant assessor, specialized in possessory interest in the 1990s and chased down dozens of missing properties to send them a bill.
“We were picking up hundreds of millions of dollars,” he said. “That’s about $10 billion in assessed value.”
If the city seems shy about taxing its biggest private employer, that may be a case of not wanting to stir the pot.
In 1993, Farrell found a file for Gannett, the company contracted to manage bus shelters across the city. The manila folder read “Do Not Assess; Too Political.” He assessed it anyway. Over the years, he found all kinds of businesses — shipping lines, stevedore services, concessions, and more — operating tax-free.
Farrell even worked on taxing the naming rights of Candlestick Park.
In 1995, San Francisco offered naming rights for the park to the 49ers. The team bristled at the tax burden, estimating the cost to be up to $150,000 annually for the four-year, $3.9 million deal. It was so contentious that lawmakers amended the contract to make sure the tax was paid to the city. As a result, the city brought in about $39,000 a year more.
The idea of Salesforce’s naming rights going untaxed rankles Farrell.
“The assessor’s office needs to audit to ensure that all properties subject to taxation are appraised accordingly, especially in these recession times,” Farrell said. “Everyone should pay their fair share.”