Action Withholds Commitment of Resources : City Panels Back Pacoima Enterprise Zone

Two Los Angeles City Council committees, meeting jointly, voted Tuesday to move ahead with an application to win the designation of state enterprise zone for Pacoima, a move that community leaders say is needed to turn around the area’s decaying business districts.

In giving the nod to Pacoima and to the Central City area of Los Angeles, the committees brushed aside a staff report that recommended dropping the applications unless the city committed substantial resources to help its communities compete for the designation with others throughout the state.

Waivers of Fees

The staff report urged the creation of such business incentive programs as waivers of business license fees, development fees and utility taxes. Douglas Ford, general manager of the Community Development Department, said no other city redevelopment area has received such waivers.

“My feeling is that we can get a zone even without a whole lot of incentives,” said Councilwoman Joan Milke Flores, chairwoman of the Industry and Economic Development Committee.

Dissent Among Officials

Although the decision clears the way for Pacoima to enter the final phase of the application process, some officials attacked the decision, saying the lack of city commitment substantially weakens the community’s chance of becoming an enterprise zone.

“It appears that the city doesn’t care,” said Assemblyman Richard Katz (D-Sepulveda), whose district includes Pacoima and who expressed fear that his lobbying efforts would be weakened by the committees’ action.

“If the city doesn’t care enough to commit any resources to the program, why should the state?” asked Katz, who contended that the city “is doing the very minimum so they can’t be accused of not doing anything. But they are setting it up to fail.”

The final say on whether additional incentives should be added rests with the full City Council, however.

20 Finalists

Pacoima is among 20 finalists vying to become 10 enterprise zones in California. Under the enterprise-zone program, state and city governments grant such incentives as tax breaks to businesses that locate within the zone.

The idea, pushed by the Reagan Administration but never enacted by Congress, is aimed at stimulating jobs in blighted areas by freeing businesses within zone boundaries from many government regulations while offering financial incentives. Twenty-one states have enacted the program on their own; California plans to follow suit by February.

Last week, the city’s Community Development Department issued a report recommending that Los Angeles drop its application because of “unrealistic” state application deadlines, the lack of substance in the state’s incentives and “substantial costs” for the city to operate a zone.

‘City Should Back Pacoima’

Mel Wilson, president of the Pacoima Chamber of Commerce, said he was disappointed in the department report and the subsequent committee decision.

“I don’t feel that the fact they decided to go through with the application is any kind of victory,” Wilson said. “I feel the city should be backing Pacoima up all the way in this application. It seems to me they aren’t.”

Besides tax and fee waivers, Ford said, about $11 million would have to be funneled into city loan and bond programs specifically targeted to the Pacoima and Central City enterprise zone areas.

Limit on Incentives

But the four members at the joint meeting of the Industry and Economic Development and Grants, and Housing and Community Development committees unanimously stipulated that special city incentives should not be targeted to an enterprise zone.

They ordered the department to submit a final application that would “amplify and clarify” existing redevelopment programs, including the city’s industrial development bond, small-business-loan and job-training programs.

Councilman David Cunningham, chairman of the grants committee, has criticized the enterprise zone program but he voted for it grudgingly, saying that getting an enterprise zone designation is “like giving the city a pet rock.”

Disagrees on ‘Pet Rock’

Councilman Howard Finn, whose district includes Pacoima, disagreed with Cunningham’s “pet rock” assessment.

“This is something very important to Pacoima,” Finn said. “We see it as a way to eliminate some of the biggest problems in the area.”

Community leaders envision a zone designation turning Van Nuys Boulevard into a thriving commercial strip, attracting industry to San Fernando Road and, most importantly, creating up to 3,000 jobs.