Grant Received in Project to Help Small Businesses

A $444,000 federal grant awarded to Santa Ana on Thursday will provide about half the cost of a project designed to help small businesses get off the ground in their first three years of operation.

The proposal, intended to create new businesses and thereby expand sales tax income, calls for the city to develop and manage a “business enterprise facility” on a one-acre site at Santa Ana Boulevard and Poinsettia Street. The cost of the project is estimated at $850,000, with city redevelopment funds expected to cover what the federal grant does not.

New businesses would lease space in the structure and would have access to pooled secretarial services, computers, shipping and receiving, accounting and vocational training programs, said Hank Cunningham, Santa Ana’s manager of business and industrial development. Construction on the now-vacant site, already purchased from the Santa Fe Pacific Railroad Co., could be completed by mid-1986, he said.

Ten to 15 tenants would be housed in the 25,000-square-foot structure, providing about 100 jobs in the area, said Cunningham. The businesses would be restricted to a maximum of three years in the facility.

“It’s our hope that they would want to relocate in the immediate area,” Cunningham said, although he said there would be no requirement that the businesses stay within the city. Santa Ana’s investment would eventually be repaid through lease payments on the facility, he said.

The federal grant was approved by Congress Thursday as part of an appropriation for the Commerce Department’s Economic Development Administration.

The business enterprise facility would be the first of three redevelopment projects planned in the area generally bounded by the Santa Ana Freeway, Main Street, Grand Avenue and 1st Street.

Santa Ana is seeking a “business enterprise zone” designation from the state for the area, which would provide businesses within the zone with relief from some state taxes, reduction of development fees and further tax credits for employment of low-income people. The state is considering 20 California cities for approval of such zones--Santa Ana being the only Orange County city in the running--and a final decision will be made in January.

The city is also asking to have a 43-acre parcel within the redevelopment area designated as a foreign trade zone, in which companies could import raw materials and then export manufactured goods duty-free. Duties would be levied only on finished goods leaving the zone to be sold in the United States. The Commerce Department is expected to make a decision early next year, Cunningham said.