They’re Among 13 ‘Enterprise Zones’ Chosen : State Moves to Assist 3 L.A.-Area Communities
In a move to boost economically depressed parts of California, the Deukmejian Administration on Tuesday designated 13 communities, including Pacoima, Watts and the area east of USC, as “enterprise zones” where businesses are granted tax breaks and other incentives to hire the unemployed.
Christy Campbell Walters, director of the state Department of Commerce, said she hopes that in the next 15 years the program will create 25,000 new jobs statewide and between 5,000 and 8,000 in the Los Angeles area.
“Enterprise zones represent one tool for spurring new investment and job creation,” Walters told a press conference called to announce the 13 winners. The announcement culminated a yearlong competition among 65 communities that applied for enterprise zone status.
The enterprise zone program is targeted at blighted areas with high unemployment. In an effort to revive business in such areas, state and local governments will offer a range of special incentives to firms already situated inside the zones and others that want to move there.
Businesses that apply for the program could begin obtaining the tax advantages within three months, said Richard Whitman, the Commerce Department’s enterprise zone coordinator.
He said that among other things the state plans to offer businesses inside the enterprise zones up to $5,000 a year in income tax credits for hiring an unemployed person, a sales tax credit for new equipment purchases and a 5% income tax credit for workers hired inside the zones.
At the same time, the Los Angeles Community Development Department plans to offer up to $10 million in tax-exempt bond financing to entice new firms to the zones, help market products made there and cut through red tape for various city permits.
The program was created under two bills authored by Assembly Republican Leader Pat Nolan of Glendale and Assemblywoman Maxine Waters (D-Los Angeles) and signed into law by Gov. George Deukmejian in 1984. During the next two years, six more zones will be established.
In making the announcement, Walters said that 10 of the zones were established under Nolan’s legislation and three under Waters’. The major difference between the two laws is that Waters’ program--which applies in Watts, southeast Bakersfield and north Sacramento--requires employers to hire persons living in or near the enterprise zone. Nolan’s has no such condition.
The enterprise zone issue has sparked debate in the Los Angeles City Council over which communities should seek the state designation and whether the program would help provide jobs. In the past, Councilman Dave Cunningham has called the state tax breaks “puny.”
On Tuesday, Councilwoman Joan Milke Flores, whose district includes the Watts enterprise zone, said she is pleased by the state action because it will give the city a new tool for attracting businesses. In addition, she said, it might encourage Congress, which annually debates such legislation, to finally approve a proposal creating federal enterprise zones.
Coordinator Whitman said the three Los Angeles sites were chosen because the city pledged to open field offices with at least two representatives to attract new employers to the areas and then help them cut through red tape to obtain permits.
High-Technology Businesses
He said the 3 1/2-square-mile zone around USC in South-Central Los Angeles is the most economically depressed of the 13 zones chosen. Under the city’s proposal, Los Angeles, with the help of the university, will attempt to lure high-technology businesses.
In Watts, the city was joined by Los Angeles County and three other cities--South Gate, Huntington Park and Lynwood--in applying for the zone designation in the seven-square-mile area. State officials said they selected this area, which is in Assemblywoman Waters’ district, partly because it is close to Los Angeles International Airport and Huntington Park plans a $24-million industrial park in the area.
Whitman said the state was persuaded to select the 6.7-square-mile Pacoima area because the local Chamber of Commerce and California State University, Northridge, plan to help businesses market their products. In addition, he said Los Angeles police foot patrols have led to a drop in crime in the area in the last year, making it safer for potential employers. Pasadena, which was on the list of 24 finalists, failed to be selected. Whitman said that Pasadena planned to locate businesses in redevelopment areas, but is just beginning to figure out where to place the redevelopment areas.
In addition to the three Los Angeles sites and those in southeast Bakersfield and north Sacramento, enterprise zones were designated in San Jose, Calexico, the Agua Mansa area between Riverside and San Bernardino, southeast San Diego, Eureka, southwest Fresno, Porterville and the Yuba City-Marysville area.
