Enterprise Zone Status Expected for Wilmington

Los Angeles officials are confident that the state will soon select Wilmington and eastern San Pedro for a program that provides tax incentives to businesses--so confident, in fact, that they called a meeting of community leaders last week to get a head start on setting up the program.

Reynold Blight, the Community Development Department manager in charge of the city’s application, told the group that he expects to get “good news” when the state Department of Commerce announces its choices Oct. 18.

“If we don’t,” Blight said, “we’ll have to fall back and reorganize.”

The Wilmington-eastern San Pedro area is among four statewide finalists for three spots in the state Economic and Employment Incentive Area program. Commonly referred to as an “enterprise zone”--the name from a different, but nearly identical, state program--the incentive area offers tax breaks for new and expanding businesses, particularly those that hire employees who live within the area boundaries.

Paul Hiller, who manages the program for the Department of Commerce, said Los Angeles officials have good reason to be confident that their application will be selected, although he would not say it is a sure thing.

Strong Application

“We have not reached a final decision as yet,” Hiller said. “There are still some factors to be looked at but their application is very strong, as it has been from the start. They’re right in the thick of it.”

Hiller noted that of the five finalists initially chosen, one--the city of Watsonville--has since dropped out, increasing the chances of the other four. And he said Los Angeles officials have a good track record, having submitted successful applications for Watts, Lincoln Heights and Boyle Heights, and the central city.

City officials are especially anxious to have the enterprise zone designation for Wilmington, where they are moving on a variety of fronts to revive the depressed central business district.

In that community, the city also plans to:

- Apply for federal enterprise zone status. This is a long shot. Blight and other city officials say Wilmington does not meet the federal criteria for low income, high unemployment and population loss. Nevertheless, the City Council’s Industry and Economic Development Committee has instructed the Community Development Department to apply for the federal status. The status enables a community to qualify for other federal programs intended to cure blight.

- Expand the existing Wilmington redevelopment area, which now encompasses an industrial park, to include the area around the community’s main thoroughfare, Avalon Boulevard. A redevelopment designation lets the Community Redevelopment Agency buy property or, as a last resort, acquire land by eminent domain to attract new business.

- Establish a Commercial Area Revitalization Effort--commonly called a CARE program--similar to the one in nearby San Pedro. CARE programs take advantage of federal grants to help the existing business community. Money is available for earthquake-safety repair work, improvements to building facades, and street improvements such as new trees or street lights.

Blight said these last two plans require an economic feasibility study, which will be done by a consultant for the Community Redevelopment Agency and the Community Development Department, the two arms of government most involved in rehabilitating Wilmington.

“We want to look at the overall commercial activity in Wilmington and get some sense of what’s going on” and what market there is for new business, Blight said. “We have to test our ideas and the community’s ideas against the real world and see what can be done.”

The City Council recently approved $100,000 for the study, which is expected to take at least six months to complete. Blight said it will be the first time the two departments have worked on a project from its inception.

Groundwork Laid

At last week’s meeting, Blight laid the groundwork for a Community Advisory Council to help oversee the Wilmington-San Pedro program, as required by state law. The council’s main job will be to determine which community organizations will be certified to receive contributions from businesses that participate in the program.

The businesses are eligible for state tax benefits if 50% of their employees live within the enterprise zone. However, if more than 30% but less than 50% of the employees fall within that category, the business can “buy in” to the program and receive the tax benefits by making contributions to the community groups selected by the advisory council.

Designation by the state makes businesses eligible for city tax breaks as well.

The proposed incentive area includes 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.

Although city officials were most concerned about Wilmington, that community does not qualify as a high-density unemployment area or as poverty-stricken under the state program’s criteria. That is why eastern San Pedro, which has sustained a vast loss of jobs--especially in the ship-building and fishing industries--was included in the application.