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Assemblyman Luis Alejo Press Conference at Green Vehicles in the Salinas Enterprise Zone

Green Vehicles recently opened shop in Salinas California to make environmentally friendly cars in the California Enterprise Zone. Here is a video from CBS San Francisco profiling the company:

On Friday, Feb. 11 Assemblyman Luis Alejo held a press conference at the Green Vehicles site to highlight the importance of the Enterprise Zone program and the legislation he has co-sponsored with Assemblyman Manuel Perez.

Here is a video of Assemblyman Alejo speaking in front of Green Vehicles followed by Salinas Mayor Dennis Donohue:

The next video includes remarks by Green Vehicles president Mike Ryan explaining how the Enterprise Zone was a critical part of their decision to locate their facility in California:

The event received a good amount of coverage, such as articles in The Californian, the Santa Cruz Sentinel, and the San Jose Mercury News.

The following is the account from the Californian:

Assemblyman Luis Alejo, D-Watsonville, stressed Friday that the California Enterprise Zone program needs to be reformed and strengthened, not eliminated, as has been proposed by Gov. Jerry Brown.

California’s 42 Enterprise Zones provide tax credits and other incentives to businesses that operate in the economically depressed areas.

Last year, the Enterprise Zone program created and retained more than 118,000 jobs in California, said Alejo.

The Salinas Valley Enterprise Zone, which formed in March 2009, includes the cities in the Salinas Valley (Salinas, Gonzales, Soledad, Greenfield, and King City) and the County of Monterey.

“The Salinas Valley Enterprise Zone is responsible for creating 391 jobs and retaining 1,386 jobs,” said Alejo. “There are 231 businesses that are currently benefitting from Salinas Valley Enterpise Zone program.”

The Salinas Valley program also funded the application for the California Welcome Center, which is expected to bring in between $10 million and $17 million a year, said Andy Myrick, Salinas Valley Enterprise Zone manager.

In addition to Alejo and Myrick, other elected officials and local business people spoke at the press conference, pointing to the success of local Enterprise Zone programs and the tough economic times faced by residents. Salinas mayor Dennis Donohue and the president of Green Vehicles Inc., Mike Ryan, were among the community leaders gathered in front of the Green Vehicles Inc. factory in south Salinas.

The program was a major factor in Green Vehicles’ choice to move to Salinas. Green Vehicles only considered cities that were part of Enterprise Zones when choosing where to put its manufacturing plant, said Ryan.

Alejo commended Governor Brown’s budget proposal that aims to reduce the state’s $24.5 billion deficit, but thinks the Enterprise Zone program should stay.

“I fear that eliminating this program will result in more problems long term for businesses and for the potential to create new job opportunities throughout our region and throughout the state of California,” said Alejo.

Enterprise Zones provide “incentives for businesses to locate in economically disadvantaged areas to encourage investment, growth, community development, and most importantly, to create and retain jobs that are so critical for our local families,” said Alejo.

The reform Alejo talked about Friday comes in the form of three bills, introduced to the Legislature earlier this month, that would enhance program oversight along with audits and elimination of poor-performing zones.

Alejo acknowledged criticisms of some Enterprise Zone programs for including tax credits for the hiring of upper-level workers. The incentives and benefits should be given to those employers that hire lower wage workers not high-paid executives and administrators, said Alejo. The reform bills include a proposed wage cap for any worker claimed under the program.

Donohue also dislikes the Governor’s idea to eliminate the program as a means to balance the state’s budget.

“If you were to start from scratch and create tools to help expand your tax base and attract new jobs to California, you would design something that looks almost exactly like an Enterprise Zone.”

“It makes no sense to throw the baby out with the bathwater,” he said.

Donohue added that it is critical to attract new jobs in economically disadvantaged areas like Salinas Valley, which already suffers high seasonal unemployment.

“In the end, job growth is how we’re going to get at some of the tough social issues we have in our community,” he said.

Every city in the Salinas Valley in Dec. 2010 had unemployment rates of over 20 percent, according to zone manager Myrick.

The Public Policy Institute of California found that from 1992-2004, the Enterprise Zone program had no effect on job growth. However, a report from the University of Southern California concluded that the program has reduced unemployment rates by 3.4 percent and poverty rates by 8.65 percent. The Salinas Valley Enterprise program has been around for less than two years, said Alejo, and it has already benefitted the area, with new and retained jobs.

In addition to the tax incentives, the Salinas Valley program is hoping to attract new job-offering businesses with an online system that enables local realtors to advertise buildings and property available for business use.

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