Shakedown of Coworking: Is the City Demanding Your Members Names?
Sasha V
Yesterday, we received a letter from the City of San Francisco
demanding that we release the names of all our San Francisco members
to "insure that all commercial tenants in the facility are registered
with the Office of the Treasurer and Tax Collector".
1. Have you received this letter from SF or a similar letter from your
city government?
2. How have you handled it?
3. If you haven't, what's your instinct on this?
Ours tells us that our clients are not commercial tenants, but members
of a private club and thus we're under no obligation to disclose any
information about them in this KGB-like shakedown.
It'd be great to hear from the group.
Thanks!
Sasha Vasilyuk
Sandbox Suites
Alex Hillman
At the end of the day, though...I'd defer to a lawyer for something like this. If youre comfortable sharing more as this unfolds, I'm sure we'd all benefit from knowing more details about the background of the request as well as the path(s) to resolution.
-Alex
IndyHall.org
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Beth Buczynski
I'm not sure if it's related, but I know there's been a lot of fuss in
the San Francisco area about the legalities of shared renting since
the Airbnb fiasco.
http://www.shareable.net/blog/airbnb-uncovers-collaborative-consumption-legal-paradox
I wonder if they're now suspicious of coworking for the same reason?
Best of luck in dealing with this. Definitely sounds fishy.
Beth
@gonecoworking
On Aug 21, 10:32 pm, Alex Hillman <dangerouslyawes...@gmail.com>
wrote:
>
> At the end of the day, though...I'd defer to a lawyer for something like this. If youre comfortable sharing more as this unfolds, I'm sure we'd all benefit from knowing more details about the background of the request as well as the path(s) to resolution.
>
> -Alex
> IndyHall.org
>
> Sent from my iPhone
>
Pat Ramsey
Not a bad time to double-check all your paperwork to ensure everything's in order.
Cheers!
Pat
Rayann Larsen
instead the formalities of a letter.
I politely told them that it was not my job to do theirs and that I was not
going to release any information above and beyond what was already made
public via our website.
I have not had any further phone calls or letters of the such.
Rayann Larsen
The Work Spot
www.workatthespot.com
770-330-1001
Twitter (@theworkspot)
Facebook (The Work Spot)
Hello everyone,
--
Jack Speranza
members...
Whether or not you're under an obligation to provide identifying info
(or
whether your members would be under any obligation to pay taxes) is
a question of local law (CA state and city ordinances).
If this were in MA (where I'm an attorney), third parties such as
landlords
typically have no obligation to identity their business customers. It
is
also unlikely that users of a coworking space would be subject to
local taxes
(in our case triggered by having business "property" such as
computers,
desks and chairs located within the municipality). You're not in
Massachusetts,
however, so what's true for you and your members can be quite
different.
Seems like you have 3 broadly defined options.
1. Spend some $$ and have an attorney provide an opinion as to
whether
there's any legal obligation to respond to the City's request (and
more
importantly, if voluntarily responding to their request could subject
you to liability
under any state or federal privacy laws).
It would also be helpful to have a considered opinion as to what
circumstances
give rise to tax liabilities under local laws. It's most likely that
potential tax
consequences arise from generating some revenue from work, trade or
commerce
performed within the City's boundaries.
A legal analysis of the situation will let you know exactly where you
stand on
a variety of issues and permitting you to tailor your response
accordingly.
2. Your second option is to send a polite response declining to
provide specific
info (citing general privacy concerns absent a legal obligation to
disclose).
Because you want to be a responsible corporate citizen, however, you
should
invite the city to cite specific state or federal law compelling you
to disclose or,
in the alternative, offer to communicate specific concerns to your
members so they
can contact city authorities or otherwise act accordingly.
3. Your third option is to simply ignore the correspondence and see
whether
any follow-up actions are initiated (not necessarily recommended, but
doing
nothing is always an option so long as you're prepared for ultimately
having
to act).
Wish I were based on the West Coast... this is exactly the kind of
thing
I'd love to bite my teeth into as a champion for small business (seems
like
the city is trying to bully those who are least equipped to defend
themselves).
By the way, I'm not about to insert the long legal-ese type of
disclaimers used
by most of my bretheren. I'm assuming the obvious -- that you and
everyone who
reads this understands I'm not rendering legal advice and you
shouldn't consider
anything I've said as anything more than the off-the-cuff ramblings of
a fellow
space owner.
Keep us posted.
----------------------------------------------
Jack Speranza
Principal, Main Street Ventures
15 Main Street, 2nd Floor
Hopkinton, MA 01748
T: 508.858.5440 x101
F: 508.858.5441
Toll Free: 866.472.1035
http://mainstreetventures.com
http://zenbungalow.com
----------------------------------------------
Jerome Chang
I verified with a very seasoned exec suite veteran and he said this type of request is quite typical.
The gist: the City does have the right to request this from the "landlord", which is effectively us by the way.
Reason: typically to verify our various businesses at an address complies with USPS regs re:CMRA (commercial mail receiving agency).
As mundane as this topic might be, this would be one of the resources we should provide to all coworking facilities if we were to have some kind of alliance which would make sure we aggregate this info. In a few weeks, this post will just disappear into our Google Group blackhole, and someone else will request the same down the road...which means repeating the same here again.
Jerome
______________
BLANKSPACES
"work FOR yourself, not BY yourself"
www.blankspaces.com
ph: 323.330.9505 | 5405 Wilshire Blvd (2 blocks west of La Brea) Los Angeles, CA 90036
ph: 310.526.2255 | 1450 2nd Street (@ Broadway), Santa Monica, CA 90401
Jerome Chang
Yes, this typically happens when city agencies are looking for money
No, our "club" structure won't hold weight vs. a City, nor worth the legal fight if you even think so.
Since we coworking centers are often facilitators of business growth, we coworking people should know more about this compliance stuff and also do our due diligence.
Thank you to Frank Cottle (http://www.ABCN.com) for providing this info.
Jerome
______________
BLANKSPACES
"work FOR yourself, not BY yourself"
www.blankspaces.com
ph: 323.330.9505 | 5405 Wilshire Blvd (2 blocks west of La Brea) Los Angeles, CA 90036
ph: 310.526.2255 | 1450 2nd Street (@ Broadway), Santa Monica, CA 90401
Devin
Gretchen Baisa
Yep, have to agree that SF is likely looking to pick every bit of tax
revenue that it can find. I've worked closely with City government in
my previous life. Here are some thoughts:
1. Shoot an email back. Copy your councilmember/supervisor's top
staffer to make sure that the City department plays by the rules
(you're an engine of economic development, so you've got some
power!!) Plus, that supervisor's top staffer is a great gatekeeper
and a good person to trumpet your/your members' accomplishments to.
2. Explain that while you've got some businesses that could
potentially be registered, you've also got plenty of consultants,
telecommuters etc that don't necessarily have to report to Treasurer
and Tax Collector.
3. Work with them to some point. Ask what kind of incentives, tax
breaks, etc they can give. We've got a City person coming into our
space tomorrow to talk about Enterprise Zone eligibility and tax
credits - a big boon for some of our folks that might qualify. We've
got parking incentives, had help with some policing issues, asked and
received a bike rack outside our doors...you never know. Perhaps
there are similar incentives or resources for your people?
The bottom line is that not all of your members may end up having to
pay taxes and it's unpleasant to be in a shake down, but business
taxes are kind of a necessary expense and evil if we want to keep
cities running. There's always a human behind the letter and they
might have resources or connections that could be useful to you - or
to your members. Good luck!
Best,
Gretchen
NextSpace Coworking + Innovation San Jose
Sasha V
Thanks for the useful feedback, everyone! We've discussed this with
other Bay Area coworking space owners and some of them received the
same letter. The consensus is to ignore it for now. But I'll update
you all if something develops. I already have a newspaper reporter
standing by in case the city tries to enforce it further :)
Sasha