San Francisco gave away $70 million in tax revenue to lure the nascent social-media company to its bleakest neighborhood. Was it worth it?

By Jonathan Weber

In 2010, as the Great Recession ravaged the local economy, San Francisco was desperate for jobs.

With its manufacturing industries long since departed for cheaper locales, the city by the bay had grown overly dependent on financial services, real estate, and tourism. Unemployment was now topping 10 percent, and the local Internet industry, which first emerged in the South of Market district more than a decade earlier, was still quite small. The big technology companies at the time—Intel, Apple, the fast-growing Google—were located an hour south in suburban Silicon Valley.

There was, however, one very fast-growing, high-profile Internet company—a three-year-old start-up called READ ON