Santa Ana Seeks $2.9 Million in Federal Aid : Urban renewal: The city is applying to become one of 65 designated ‘enterprise communities’ in the nation.

The city is applying to become one of only 65 designated urban “enterprise communities” nationwide under a Clinton Administration program that gives sweeping financial benefits to poverty-stricken areas, according to city officials.

The proposal--prepared during three months of meetings with more than 150 community organizations, businesses and governmental agencies--has already been submitted to the state for preliminary review. The City Council is expected to endorse it at tonight’s regular meeting.

If Santa Ana is selected, the city would receive a one-time boost of $2.9 million to launch the project, businesses in the zone would be eligible to borrow money at tax-exempt rates, and all future federal funding requests for social service block grants would receive priority from the Clinton Administration, Santa Ana housing analyst Scott Kutner said.

The zone, based on six census tracts in the downtown core and southeastern part of the city, would largely overlap the city’s existing state-designated enterprise zone, which has lured new business to the city over the past year with tax incentives. The council is also expected to vote tonight to expand the existing zone by 15%.

“It’s something that offers tremendous potential,” Councilman Miguel A. Pulido Jr. said of the federal proposal. “If we are selected, we’ll be one of the very few who are fortunate to have both the state and the federal designations. But I think the real potential lies in additional benefits we would be able to realize downstream.”

Santa Ana is demographically the youngest city in the country, and the city’s proposal focuses heavily on youth-oriented issues such as education, health care, job training, affordable housing, recreation, crime reduction and economic development, Kutner said.

“Given its extremely young median age and ethnically diverse demographic profile, the future success of the community is wholly dependent on decisions being made now,” reads the proposal’s executive summary.

While the zone’s boundaries cover only 39,000 residents, if Santa Ana is designated an enterprise community, the entire city would be eligible for other benefits during the 10-year duration of the program, Pulido said.

Those include the formation of free trade “sub-zones” and preferential treatment in applications for federal money from the Department of Housing and Urban Development, as well as the Department of Labor and the Department of Transportation, he said.

“I see this as something much much greater than $3 million. Couple it with our position on the West Coast, our position relative to trade and our position in Orange County, with all these freeways that surround us . . . this designation would simply be something that would ice the cake,” he said.

State officials will review the applications and forward them by June 30 to the U.S. Department of Housing and Urban Development. That agency is expected to select 65 urban and 35 rural enterprise communities by September, Kutner said.

HUD will also pick six urban and three rural areas to be “Empowerment Zones,” entitled to more sweeping benefits than the enterprise communities. Santa Ana did not meet the poverty requirements to be an empowerment zone, Kutner said.

Anaheim has also applied for the enterprise community designation, according to the city’s housing coordinator. The cities had to show that at least 25% of their populations live below the poverty line in the designated census areas, Kutner said. They also had to demonstrate that local agencies, businesses and broad-based community groups are poised to work together to solve problems of blight, crime, unemployment and poor health.

In months of meetings to develop the plan, Santa Ana sought participation from groups specializing in housing, health care, business, youth and public safety. They included church groups, the Urban League of Orange County, Civic Center Barrio Housing Corp., Delhi Community Center and Cambodian Family Services, as well as large companies and public agencies such as school districts.

“This whole experience has been really positive, with respect to the participants who were involved in the planning,” said Kutner. “The city was very inclusive.”