Communities Competing for $100 Million in Funding : Development: Only a fraction of L.A.’s impoverished areas will be included in the federal empowerment zone.

A multimillion-dollar federal empowerment zone that would promote economic development in Los Angeles will likely be carved into several portions, and communities across the city are already jockeying for their piece.

With its combination of $100 million for social programs and tax incentives for businesses in poor areas, the empowerment zone will be the most significant federal community-development program in more than 20 years. Although the economic effects could be diluted, council members and other city officials have said the zone will likely be broken into three pieces, which is permitted under federal regulations so long as half of the census tracts have poverty rates of 35% or more and the total population does not exceed 200,000.

No matter how it is carved up, the 20-square-mile zone will still exclude an overwhelming majority of the eligible areas covering 80 square miles in Los Angeles. And as a May 15 deadline approaches for the City Council to prepare a draft report on which communities will benefit, the battles among competing interests have begun.

“Hopefully, it won’t get too ugly,” said Reynold Blight, director of state enterprise zone programs for the city’s Community Development Department.

A preview of the competing neighborhood interests came during a March 3 council hearing, when groups from Watts to Boyle Heights and from Wilmington to Pacoima argued to be part of the zone. The hearing was held in advance of a Community Development Department report expected to be given this week to the council. That report will recommend areas to be included in the city’s application to the U.S. Department of Housing and Urban Development, which must be turned in by June 30.

“We’re all fighting for this piece of pie, and I don’t know if there is enough money to satisfy us all,” said Richard Marshall, a member of the Community Advisory Council to the 9th Council District in South-Central. He was among about 120 people at the hearing of the council’s Community and Economic Development Committee and the Community Redevelopment and Housing Committee, which will hold hearings on the empowerment zone report next week.

“We’ve been neglected worse than any of these other poverty areas in the city,” Marshall told council members, arguing for a zone along Central Avenue from 5th Street to Slauson Avenue. “I feel we deserve special consideration.”

But the same argument is being made by advocates of a zone on the Eastside, who say the only infrastructure development in their area has been the construction of freeways that have broken up the neighborhoods of Boyle Heights, El Sereno and Lincoln Heights.

“We’re lobbying for our future,” said Frank Villalobos, president of Barrio Planners Inc., one of 19 community groups representing the Eastside at the March 3 hearing.

The 19 groups presented an economic study identifying a five-square-mile area with 33,000 residents for consideration as part of the zone. Villalobos said the area includes the industrial section of Boyle Heights and runs along the Los Angeles River near several freeways and railroad lines, which makes it well suited for economic development. The area is also part of a state enterprise zone, which provides state tax breaks to businesses within its boundaries.

The same argument is being made by the Los Angeles Community Empowerment Collaborative, a coalition of more than 40 community and business organizations near USC that formed in November to push for inclusion in the federal program. The group wants a portion of the empowerment zone to overlap the city’s four-square-mile Central City state enterprise zone near USC.

In a report submitted to the council, Central City advocates say their area’s per capita income of $5,407 is the lowest of the city’s five state enterprise zones and cite the area’s proximity to the university and its existing industrial and transportation infrastructure as major advantages.

“Our area has strong economic development potential and many community-based organizations,” said Ezekiel Mobley, executive director of the Central City South Assn. of Commerce and Industry.

Complicating the problem, the Los Angeles County Board of Supervisors has said it wants to file a joint application with the city, possibly for the Watts-Willowbrook or Florence-Firestone areas bordering the two jurisdictions.

Under the federal empowerment zone program, the city would be allowed to spend the $100 million for programs ranging from child care to job training. Also, businesses in the zone will be eligible to receive a host of tax incentives. They include payroll tax breaks of up to 20% of the wages of workers who live in the zone and accelerated depreciation of equipment, allowing owners to write off equipment as a tax loss as soon as it is purchased instead of the normal five- to seven-year period.

The Clinton Administration, hoping to use Los Angeles as a model for its urban agenda, has said the city is virtually assured of receiving one of the zones. Los Angeles officials have said they also plan to apply for several of the 65 HUD-designated urban “enterprise communities” that will receive $3 million each in assistance.

Impoverished Areas

About 80 square miles in Los Angles have poverty levels making them eligible to be included in the city’s application for the $100 million empowerment zone program. But guidelines set by the federal government will limit the zone to only 20 square miles. Central Los Angeles now contains most of the city’s heavily impoverished areas.

Nearly 19% of residents in Los Angeles live in poverty (the federal government defines a family of four earning less than $14,764 as living in poverty.) In the most heavily impoverished areas, 38% to 84% of the residents live in poverty.