Port Area Is Finalist for Job Incentive Zone

A proposal by the City of Los Angeles to gain state tax incentives for businesses in Wilmington and eastern San Pedro came one step closer to fruition this week, when state officials announced that the city’s application was among five finalists for three spots in the state program.

If the city is successful, Wilmington and eastern San Pedro, including the waterfront, will be designated a state Employment and Economic Incentive Area and, in an effort to create more jobs, the state will offer a variety of tax benefits to new and expanding businesses in the area. The announcement that the city was chosen a finalist from among 11 applications came Monday from the state Department of Commerce. “That’s good news,” said Reynold Blight, who helped prepare the application for the city Community Development Department. “Keep your fingers crossed.”

City officials--particularly Councilwoman Joan Milke Flores, who represents the harbor area--have been anxious to get the tax benefits, especially for Wilmington, which has not enjoyed the economic rebound that much of nearby San Pedro has.

Designation by the state would qualify area businesses for city tax incentives as well.

“The councilwoman has always felt that Wilmington particularly has a tremendous potential to attract quality investment because it is located near the port,” said Bernie Evans, Flores’ chief deputy.

Blight agreed that Wilmington has “a lot of potential . . . and also a lot of need. It’s not an area that will automatically redevelop. It needs a certain amount of help and intervention to develop properly.”

It will be six or seven months before state officials make their preliminary decision. Even then, the designation as an incentive area would be conditional, based on the city fulfilling promises it makes in its application. Final designation, state officials say, will take up to a year.

In the meantime, city officials must prepare a final, and more detailed, application to the state outlining plans for the area. The city will have five months to prepare the application, and the Department of Commerce will take a month or two to review it.

Other finalists are the cities of Madera and Watsonville; Fresno County for the Fowler area, and Sacramento for its Oak Park area.

Paul Hiller, who manages the incentive program for the state, said its purpose is to create jobs in “high-density unemployment areas . . . those areas that are lacking in economic growth.”

Other Designated Areas

Los Angeles already has two Economic and Employment Incentive Areas: Watts, and the Lincoln Heights and Boyle Heights areas on the city’s east side. In addition, the central city has been designated a state Enterprise Zone, under a program very similar to the incentive area program.

In making their case, city officials said they had to stretch the rules of the program a bit. They were very concerned about Wilmington, but that community does not qualify as a high-density unemployment area or as poverty-stricken under the program’s criteria. So, city officials included eastern San Pedro in their application and wrote a special petition, relying on statistics showing a vast loss of jobs--especially in the San Pedro-based ship-building and fishing industries--which have affected workers from both Wilmington and San Pedro in the last decade.

According to the city’s application, between 1976 and 1984 there was a decline of about 11,000 jobs in the area--from 31,262 to 20,246. The application noted that Todd Shipyards in San Pedro employed 5,200 people in 1984, and only 1,400 today; and that since 1981, layoffs at the Star-Kist and Pan Pacific canneries have been responsible for a loss of 3,200 jobs.

“I think what’s significant in terms of the Wilmington/San Pedro application is that the area did not neatly fit any statistically established criteria for determining need,” said Marilyn Lurie of the Community Development Department. “The most significant issue for the area is the severe decline in labor-intensive businesses.”

The incentive area in Wilmington/San Pedro would include all of Wilmington, as well as the part of San Pedro east of Gaffey Street and north of 25th Street, including the waterfront in that area. The Upland neighborhood in San Pedro, which juts out several blocks west of Gaffey Street, would also be included, as would the portion of Terminal Island that is in Los Angeles. Certain zones within the area would be targeted for commercial development; others for industry.