The Mohave Daily News offers the following insightful preview into the next round of Enterprise Zone designations along with some valuable insights from HCD’s Chris Westlake:
NEEDLES – As the Needles City Council explores options for growth in another state, there is still at least one option in California that could meet some of the city’s needs: an enterprise zone.
“This is one of the best tools the state has for attraction, retention and expansion of businesses in California,” said Chris Westlake, deputy director for the California Department of Housing and Community Development. “There are several different benefits to it.”
Businesses inside the zone are eligible for sales tax credits, net operating loss deductions and upfront expensing of depreciable property. To help stimulate investment there is a net interest deduction to lenders for businesses located in an enterprise zone.
Westlake said that Needles’ location and size should not be an obstacle to obtaining an enterprise zone because they have historically gone to entities of different sizes.
“These zones are scattered throughout the state. We’ve got them from the most urban areas to the most rural,” the deputy director said. “We’ve done small cities, like the city of Arvin in the central valley, which is very small, to L.A. It varies from year to year.”
Though Needles has been unsuccessful in attempts to acquire an enterprise zone in the past, zones continually become available as their 15-year terms expire. Needles could apply for one of the zones set to expire in early 2009.
“They are coming to an opportune time to do that,” Westlake said. “We have four expiring next year, which means probably within the next two to three months we are going to be issuing requests for proposals from jurisdictions to submit applications for those four slots.”
Though Needles may have as good a chance as any other municipality to receive a zone, the process is a competitive one.
In 2007, 13 jurisdictions applied for eight enterprise zones that became available earlier this year.
The HCD Web site has information on last year’s request for proposals, which Westlake said should be a good guideline for what will be expected in this year’s RFP.
“It won’t be much different from last year’s,” he said.
Jurisdictions have certain requirements that they have to meet, according to Westlake, and must provide certain marketing materials, like marketing plans and economic development strategies.
The process is estimated to take four to five months, from the time the RFP is issued to the time they’re due. No RFP has been issued for the enterprise zones set to expire in 2009; therefore there is not yet a due date set for applications.
“I know we are getting ready to release the RFP, probably in June,” Westlake said.
Even if the city is unable to acquire an enterprise zone, there are other ways the HCD could help the community in the future.
“We have lots of other programs, too,” Westlake said. “I don’t think Needles has used any of our bond programs. We’ve got lots of housing and other programs also.”
Needles City Council member Steve Thomas, who is a proponent of Needles’ annexation into Nevada, said that he would be happy to stay in California if Needles could acquire a zone that would help it compete with other communities in the Tri-state.
“If they give us an enterprise zone that allows us to build homes and allow our businesses to succeed and compete with the surrounding states, then absolutely, we have succeeded in what we want,” Thomas said. “If it’s everything that we need, then there is no reason to leave, absolutely none.”
