State Program to Aid Depressed Areas : S.D. Wins ‘Enterprise Zone’ Designation

In a move to boost economically depressed parts of California, the Deukmejian Administration on Tuesday designated 13 communities, including the southeast section of San Diego, 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.

“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 concluded a yearlong competition among 65 communities that applied for enterprise zone status.

Blighted Areas Targeted

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 into them.

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 as much as $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.

The program was created under separate legislation 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. Three areas of Los Angeles, including Pacoima, the central city and Watts, also received the designation. 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 requires employers to hire people living in or near the enterprise zone. Nolan’s has no such condition.

San Diego County cities of Chula Vista, Imperial Beach, Vista and National City were among the original applicants last year for the designation. Only Vista and San Diego’s southeast area survived an initial screening. The also-rans are eligible to reapply for three additional enterprise zones to be named later this year.

Whitman, the program coordinator, said that Vista’s chances would be slim because the area “is too well off economically.”

“That part of San Diego County is booming. It’s going to see much business growth with or without an enterprise zone,” he said.

In addition to the San Diego and Los Angeles sites, enterprise zones were designated in southeast Bakersfield, Calexico, the Agua Mansa area between Riverside and San Bernardino, southwest Fresno, Porterville, north Sacramento and the Yuba City-Marysville area.