Santa Ana’s Task: Make Windfall Work

Santa Ana’s designation as an “empowerment zone” in Washington on Wednesday will bring the city as much as $100 million in federal funds for its poorest neighborhoods, but it is far from assured that the ambitious economic development program will actually improve the lives of residents.

Empowerment zones in other cities across the nation have met with decidedly mixed results, in some cases dividing communities over how best to spend the money and leaving residents bitter that the program did not deliver the jobs and prosperity that officials promised.

Experts said Santa Ana officials will have to learn from the mistakes of other cities like Atlanta and Cleveland if they hope to successfully bring jobs and improve education and social services.

“This is a tremendous accomplishment politically. But the reality is, it doesn’t ensure success,” said Mark Baldassare, professor of urban planning at UC Irvine.

Atlanta’s empowerment zone, for example, was launched with great fanfare in 1994 but has been mired in political infighting, including the firing of almost all the zone’s staff. Audits have questioned whether administrators are moving fast enough to improve blighted neighborhoods.

Santa Ana officials agree that winning the coveted zone designation is only a first step, and that they must now unite community groups and residents behind a plan to spend the money, which is expected to be paid out in 10 annual installments of $10 million.

“It is an awesome task,” said Santa Ana Mayor Miguel A. Pulido Jr., who was on hand in Washington on Wednesday when Vice President Al Gore announced the grant. “We’re going to have to work at it very hard.”

Already, different factions are listing their own priorities for the windfall. Members of the business community are pushing for job and economic development while some community organizations want much of the money spent on education and children’s services.

Some officials are troubled by the city’s decision to appoint a 20-member commission to administer the funds--which they consider an unwieldy body ripe for discord.

Whether the disparate community interests can work together on the commission will be an important early test of things to come, Baldassare said.

“For empowerment zones to be successful, you have to have everyone working on the same team,” he said. “In Orange County, we don’t have a lot of experience with everyone working on the same team in any city.”

Santa Ana is the first city in Orange County to be selected for the empowerment zone program, which was created by President Clinton in the wake of the 1992 Los Angeles riot to help inner-city neighborhoods. It was one of 20 communities selected this year.

Other cities have used the federal grants to offer tax breaks and loans to businesses that move into an empowerment zone or hire working who live in the area.

Santa Ana will receive as much as $10 million a year for the next 10 years if Congress approves the program, as expected, this fall. In addition, the city will be allowed to issue about $130 million in tax-exempt bonds over the next 10 years beginning immediately.

The city has identified 10 general goals for the empowerment zone including improved educational opportunities, job training, social and health services, child care, cultural programs and community policing. Money also will be spent attracting new business to the city and revitalizing aging roads, sewers and housing.

Pulido predicted that the city will be able to use the federal funds to generate $2.5 billion in public and private sector economic investment over the 10 years.

But experts who have tracked other empowerment zones said the promise of improvements is usually greater than the reality.

“The biggest downside is likely to be that, having received the designation, there are going to be expectations that [it will have] a major impact on generating new employment and attracting new businesses,” said urban planner Eugene Grigsby, director of the Advanced Policy Institute at UCLA. “It’s going to require a great deal of effort to make those expectations happen.”

Even offering tax breaks and loans to businesses, Santa Ana will still have to compete with other attractive business centers in Orange County, including Irvine and Newport Beach.

“They need to make it attractive for people who want to come there,” Grigsby said. “The other alternative is that the city is going to have to find some kind of niche, whether it’s entertainment, or manufacturing, arts, tourism or education. They have to develop a niche that a lot of people will support.”

Santa Ana’s empowerment zone includes portions of the aging downtown district as well as more suburban neighborhoods on the southeastern edges of the city.

Pulido said the city’s application used census data to pinpoint the neediest areas of the city, which is the second-most densely populated community in California, behind San Francisco.

Rep. Loretta Sanchez (D-Garden Grove), who helped win the designation for Santa Ana, said officials plan to target older industrial districts and downtown neighborhoods that have been largely ignored by past revitalization efforts.

She expressed confidence that the community will be able to work together, pointing out that groups chosen to administer programs--including Delhi Community Center, Catholic Charities and the Boys and Girls Clubs of Santa Ana--are established, trusted organizations.

“They’re very solid,” she said. “It’s not like, all of a sudden, you see a lot of money coming your way and everyone and their brother hangs up a shingle and wants a piece of it.”

Urban planners said Santa Ana would be wise to avoid the problems that have beset empowerment zones in places like Atlanta and Cleveland, where residents in many poor areas have complained that conditions have not improved despite the infusion of federal money. In Cleveland, residents said they’ve attended countless job placement workshops but that actually jobs never materialized.

On the other hand. zones in Baltimore and Detroit are widely credited with increasing economically vitality in target districts. After being rejected once, Los Angeles was awarded an empowerment zone covering portions of South Central Los Angeles and the east San Fernando Valley last year. The zone is now getting rolling.

Santa Ana is Orange County’s largest and most ethnically diverse city. Its unemployment rate is usually the highest in the county, and its schools have struggled to improve low scores on standardized tests.

According to Department of Housing and Urban Development guidelines, empowerment zones must have a poverty rate of at least 35%. A family of four is considered to be living at the poverty level if its annual income does not exceed $16,450.

Santa Ana officials and community leaders celebrated the windfall Wednesday and are already drawing up lists of projects.

“We will now be able to fund school programs with the money that might have died for lack of funding,” said school board member John Palacio, who would like some zone funding used to further cut class sizes.

Councilwoman Patricia McGuigan said money should be spent on a wide array of services.

“This is the people’s money,” she said. “There’s a need for clothing, for writing resumes, and transportation. These aren’t luxuries. These are down-to-earth, everyday quality-of-life advantages.”

How the program fares is significant for the rest of the county, Baldassare said.

“Santa Ana does tell us what the future of Orange County is going to be in 30 to 40 years,” he said. “The time to start addressing those economic issues is today.”

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Zone Is a First

Santa Ana on Wednesday became the first Orange County community to win federal designation as an “empowerment zone,” which could reap the city as much as $100 million for job training, education and economic development. The city will receive as much as $10 million per year for the next 10 years if Congress approves the program, as expected, this fall. About $3 million has already been approved for 1999.

Source: City of Santa Ana