EZ Policy Blog

Here is a nice item:

The International Economic Development Council (IEDC) has named Jason Crawford as the recipient of the 2008 New Economic Developer of the Year Award. This prestigious award recognizes outstanding achievement by a young, emerging leader in the economic development profession.

Crawford works as the City of Santa Clarita’s Economic Development Manager, a job he was appointed to in 2007. Prior to his current position, Crawford served as the City’s Economic Development Associate responsible for leading the film and tourism programs, both of which have been recognized as the Best Economic Development Program(s) in California by the California Association of Local Economic Developers (CALED).

A panel of economic development experts, consisting of members from both the public and private sectors, selected Crawford as the 2008 IEDC award recipient. The award will be presented to Crawford at the organization’s 2008 Annual Conference, slated for later this year.

“We are very proud of Jason and the work he has done here in Santa Clarita. This prestigious award is well-deserved and we look forward to seeing what Jason will do next,” commented Ken Pulskamp, City Manager.

During his tenure in Santa Clarita, Crawford has been responsible for several successful economic development projects including: attraction and coordination of premier tourism events such as AMGEN Tour of California, the AT&T Champions Classic, and Loose Goose Wine Festival; establishing the Santa Clarita Film Office as one of the state’s most respected and successful; in addition to establishing Santa Clarita’s Enterprise Zone, a California business incentive program designed to potentially save local businesses millions of dollars.

“Whether it’s creating jobs through business development, attracting events that bring in visitor dollars and are fun for our community, or attracting the retail offerings and restaurants I know our residents want, my goal is to make Santa Clarita Southern California’s ideal city to live, work, and play,” explains Crawford.

It’s not clear exactly what Los Angeles City Council President Gil Garcetti has in mind for new or expanded enterprise zones to help the film industry in L.A. The Los Angeles Daily News reports:

With Hollywood facing its second major strike of the year, a Los Angeles city official on Tuesday called for more municipal effort to accommodate the film industry and state legislation to give it job-training credits.

“Without Hollywood there is no Tinseltown,” council President Eric Garcetti said after introducing a proposal to expand enterprise zones and tax credits the city offers and to develop proposals to accommodate film shoots around the city.

Garcetti said he and Councilman Tom LaBonge believe the city needs to do more to keep productions - and their jobs - in the city.

Among proposals to be studied are building electrical plug-ins on streets to avoid the use of large generators, improving the facades of buildings and restoring historical sites.

Garcetti cited the potential of a strike this week by the Screen Actors Guild, which would come on the heels of the Writers Guild strike earlier this year. The writers strike cost the region an estimated $1 billion in direct income and in revenue to other industries.

SAG is scheduled to announce Thursday whether it will call a strike.

Garcetti said he hopes to create three enterprise zones - Hollywood, the San Fernando Valley and downtown Los Angeles - to provide job credits for the entertainment industry.

“One of the issues we have to deal with is the requirement that these be full-time jobs,” Garcetti said. “With the industry, a lot of the jobs are seasonal. What we hope to do is work with companies that have multiple productions to keep people working on a steady basis.”

Garcetti and LaBonge also said they want to see an analysis of the revenue the city lost when “Ugly Betty” TV producers moved their show out of Los Angeles.

Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., embraced the proposals.

“Anything the city can do to help is welcome,” Kyser said.

From Senator George Runner’s website today:

Congratulations to the City of Santa Clarita, which just celebrated the one year anniversary of its successful Enterprise Zone. Here’s why Enterprise Zones are important: They encourage economic growth – particularly jobs – through offering tax incentives for business. The results are a larger tax base for the community and the improvement of blighted areas.

Furthermore, in Santa Clarita and other Southern California locations, Enterprise Zones are steps in the right direction by encouraging more businesses to keep money and jobs in California.

Enterprise Zones began in the 1980s when the state offered special tax incentives for businesses that chose to locate in designated areas. In an effort to revive economically depressed or blighted regions, businesses received incentives to provide well paying jobs for people living in those communities. This win-win situation provides economically disadvantaged residents with more employment opportunities and businesses with cost savings.

In Santa Clarita, businesses can earn up to $37,000 in tax credits over five years for hiring an employee either living within the targeted development zone, one who was recently laid off, or on one who participated in qualified training programs. This gives businesses the incentive to hire local people who need these jobs the most.

Businesses can also receive a $40,000 business expense tax deduction for purchasing equipment and supplies. All told, the Santa Clarita Enterprise Zone offers $3.7 million in potential savings.

The Antelope Valley Enterprise Zone also provides similar incentives, offering $31,574 in tax credits over five years for hiring, $20,000 in business expense deductions, and providing corporations with up to $20 million for purchasing qualified machinery and equipment.

The Victor Valley offers incentives too through the Local Agency Military Base Recovery Act, which also provides sales tax credits for up to $20 million for qualified machinery and equipment, hiring credits and other deductions.

With the deficit looming over the Capitol, policy-makers are frantically searching for ways to close the $16 billion hole in the budget. Some suggest eliminating the tax credits for these Enterprise Zones throughout the state. This wrongheaded approach would only serve to drive more businesses away and exacerbate an already sour economy.

With the celebration of the Santa Clarita Enterprise Zone’s one year anniversary, and the continued success in the Antelope Valley’s Enterprise Zone, we should look to expand the tax base by encouraging increased investment in California.

Enterprise Zones are the right approach to fixing blighted areas, and I believe these policies would work statewide. Let’s continue utilizing strategies that encourage growth rather than hinder it.

From Salinas Mayor Dennis Donohue’s State of the City address:

“The agricultural downturn is real, and it threatens our city’s livelihood,” Donohue said.

He warned the economic downturn could cost Salinas farm-worker and agricultural business jobs. To compensate, “we will need more companies to relocate to Salinas so that high-paying jobs will replace those that may be lost in agriculture,” he said.

Donohue also expressed optimism about Chiquita Brands International announcing a research and development headquarters at Fresh Express in Salinas - its second worldwide.

With the Salinas Valley’s designation as a state enterprise zone that offers tax breaks and job-creation incentives to employers, Salinas is poised to have an economic advantage in rough economic times, he said.

Donohue finished his speech by saying, “I don’t know if these are the worst of times that we face now. But I do know they are tough times. And I also know my town, and I know we are more than capable of doing the best thing, no matter how tough the times.”

The Record Searchlight in Redding, CA has published an Op-Ed by Greg O’Sullivan, president of the Economic Development Corporation of Shasta County:

Last Wednesday, hundreds of Shasta County residents joined together to attend the annual Economic Development Corp. of Shasta County Luncheon. The message they heard from keynote speaker and noted economist Jeff Thredgold was one of optimism tempered by the acknowledgment of the challenges we face as a country and a county.

We have all noticed the downturn in the recent housing market, the rising costs of energy and the general slowdown in the economy. We also must acknowledge that Shasta County has an unemployment and underemployment rate higher than most of the country and that this situation is unacceptable.

As the president of the Shasta EDC, these are challenges I and my staff members must squarely face. It is the mission of the EDC to ensure the prosperity of the region.

There are two important aspects to solving the economic challenges we face. We must grow our local businesses and attract companies from outside the region when they are seeking to grow or relocate.

To help our local businesses grow, we will be putting together a group of experts in a variety of business services, including finance, business planning, marketing and human resources, and experts in explaining how businesses can take advantage of the local enterprise zone designation. This information will be available to Shasta County businesses through regular seminars and other efforts.

We will also reach out to local businesses in other ways to identify their needs and assist them in any way that we can. Much of this work will be done by the excellent personnel at the Small Business Development Center. Read the rest of this entry »

From the Oroville Mercury Register:

OROVILLE — The City Council Tuesday night approved a $30,000 agreement with the Chamber of Commerce to market the Enterprise Zone.

However, the approval came after city staff had already been working with chamber staff to market the zone for nine months.

While councilors approved using $30,000 from Redevelopment Agency funds to pay for the chamber’s work, one questioned why approval came after most of the work had been done.

City Administrator Sharon Atteberry said the chamber had worked with staff on many things to promote the zone since last year, including an informational workshop, the Pulse of Business and the recent Business Showcase.

Additionally, the chamber had developed fliers and press releases, she said.

The Enterprise Zone offers a variety of tax and employee-tax credits to businesses located in it. The goals of the program are to attract new businesses, retain existing businesses and help them expand, according to Atteberry’s staff report. This helps create jobs, and increases the city’s tax revenue, he noted.

City and chamber staff had also worked with the Butte County Private Industry Council to give information at workshops for the zone, Atteberry said.

“So if I’m getting this right, we’re approving a contract for $30,000 that’s been worked on for nine months,” said City Councilman Art Hatley.

“That’s right,” Atteberry replied.

“That seems backwards to me,” Hatley said.

Atteberry said they would have the chamber submit a specific plan earlier next time.

Hatley said he wasn’t against paying the chamber, but he didn’t like the city doing business without council approval.

“This better never happen again,” Hatley said. “This is absolutely wrong.”

The item was on council’s consent agenda to be approved with a number of other items with one vote. Hatley asked to have it pulled for discussion.

Claudia Knaus of the chamber said it had performed the work in good faith. While she agreed it wasn’t quite proper, it had just happened.

Hatley said he wasn’t blaming the chamber.

“What I am saying is that I don’t like having business done first then approved later,” Hatley said.

The City of Fresno issued a press release today stating that HCD will announce the final designation of the new Fresno City Enterprise Zone at an event in Fresno today.

Long Beach received their final designation on April 9th bringing the total number of conditionally designated zones to receive final designation to 7 out of 23.  They are:

Compton, Fresno City, Fresno County, Long Beach, Oroville, Pasadena, and Santa Clarita.

The new Siskiyou County Enterprise Zone seems to be taking the lead in efforts to fight off challenges to the program arising from the budget crisis. From the Mt. Shasta News:

A recent recommendation to cancel Enterprise Zones throughout the state as a budget cutting effort has prompted local officials to take action.

“We are working to maintain our designation and are drafting a letter to send to the state to protest the proposed move,” said Siskiyou County Economic Development Council executive director Tonya Dowse during a presentation at last week’s Mount Shasta Chamber of Commerce meeting. “We need to be proactive in this matter. The city of Mount Shasta has already sent a letter in opposition.”

Dowse said the county and its cities and towns recently received an economic boost with a new 15 year California State Enterprise Zone designation.

“There are only 42 Enterprise Zones statewide, and it’s very competitive to achieve the designation because of the benefits that come with it. Fortunately we were one of the top applicants,” Dowse said during the meeting at Lalo’s Restaurant Thursday.

She said, “Siskiyou County is the most rural applicant and as such really needs the tax credits to sustain current businesses as well as to bring in more business and light industry. Since we are primarily a county of small businesses we have to take everything into account. What may seem like a relatively small benefit can be significant to a ‘Mom and Pop’ type of business.”

Siskiyou County Economic Development Council executive director Tonya Dowse, standing right, and Monique Dixon of Great Northern Corporation updated members and guests on the area’s Enterprise Zone status during the Mount Shasta Chamber of Commerce meeting at Lalo’s Restaurant Thursday.

Siskiyou County is one of eight areas

View Larger Map

that recently received conditional designations for new Enterprise Zones. Based on this article in the Siskiyou Daily News, it sounds like some local officials are not too pleased with the LAO’s budget recommendations:

A recommendation from the state’s legislative office has put the board of supervisors on the offensive.

According to District 4 Supervisor and Board Chair Bill Overman, the Legislative Analyst’s Office (LAO) has - in order to cut the state’s budget - recommended that Gov. Arnold Schwarzenegger cancel the recently designated enterprise zones throughout California.

If that happens, Overman said during Tuesday’s brief board meeting, it ’will have dire consequences.’

The LAO is the state’s nonpartisan fiscal and policy advisor. Its Web site states that it serves as the legislature’s ’eyes and ears,’ a job it has done for more than 65 years.

The 2008 LAO budget analysis proposed to phase out enterprise zone programs.

The report states, ’Cancel the recent redesignations of enterprise zones and deny future extensions for all other EZs.’

The LAO offers the following rationale in the report:

’Many studies of EZs question whether they are efficient or cost-effective tools for improving the economic conditions of the targeted areas.

’A December 2003 report, ’An Overview of California’s Enterprise Zone Hiring Credit,’ concluded that EZ incentives have little, if any, impact on the creation of new economic activity or employment, but that they can be effective in shifting activity into the EZ that otherwise would have occurred elsewhere in the same geographic region.

’As noted above, many EZs have already been in effect for many years. It is not clear what additional benefits will be gained by extending the same incentives that have already been in place for as many as 20 years. Rather, other redevelopment policy tools could be more effective than extended use of EZ tax incentives.’

Last month, Siskiyou County was awarded countywide enterprise zone status.

Overman drafted a letter to the governor, urging Schwarzenegger to reject the LAO’s recommendation.

Supervisors Marcia Armstrong, Jim Cook, LaVada Erickson and Michael Kobseff read the letter and gave their approval of it. Copies of the letter will also be sent to Assemblyman Doug LaMalfa and Senator Sam Aanestad.

Overman said that the county’s lobbyists will carry a similar message to other legislators.

Tonya Dowse, who oversees the Siskiyou County Economic Development Council, said that some of the nine incorporated cities are also taking ’preemptive measures.’

’A number of city councils are drawing up letters of support,’ she said.

She noted that Yreka Mayor Rory McNeil wrote a letter which will be sent to Sacramento legislators.

’Our part of the state has been hard hit by economic stagnation. However, other parts of the state haven’t experienced similar problems,’ Dowse said. ’It’s easy to have a misperception that enterprise zones aren’t needed.’

She hopes that the governor continues his support of the zones.

’The governor has been a big supporter of the zones,’ she said, ’and I feel that his support will continue.’

From CBS 5 via the Associated Press:

An ordinance introduced Tuesday by Mayor Gavin Newsom would allow more businesses, including small businesses, in certain parts of San Francisco to receive a tax credit for hiring disadvantaged workers, according to the mayor’s office.

In 2007, 10 businesses used the payroll tax credit offered by the city’s Enterprise Zone program, the mayor’s office reported.

The new legislation, cosponsored by Supervisor Aaron Peskin, would amend the program to conform to the state’s version, expanding both the area and the definition of the program within the city, according to the mayor’s office.

According to the mayor’s office, under the expanded definition, employers in certain neighborhoods would be eligible for a local payroll tax credit by hiring veterans, disabled individuals, workers who have been laid off, ex-offenders, economically disadvantaged individuals and those of Native American descent.

Other qualifying employees would include those receiving California Work Opportunity and Responsibility to Kids (CalWORKS) or Work Opportunity Tax Credit (WOTC) benefits, the mayor’s office reported.

According to mayor’s office deputy communications director Giselle Barry, for the first two years, a qualifying business would receive a credit equal to 100 percent of the payroll tax for the employee, decreasing each following two-year period to 50 percent, 25 percent, 15 percent and 10 percent.

The new definition would apply only to new hires for positions created in 1992 or later.

The expanded Enterprise Zone would apply to employers in Hunters Point/South Bayshore, the Mission District, the Tenderloin, Chinatown, North Beach, the Western Addition, South of Market, Civic Center, the Financial District, Potrero Hill and Mission Bay.

The proposed ordinance has been forwarded to the Board of Supervisors Government Audit and Oversight Committee for review.

The Los Angeles Times tells the story of a local textile company that was considering a move to Las Vegas:

Sometimes, what happens in Vegas can stay in Los Angeles.

Or, more specifically, in a vacant industrial building in Sylmar. That will be the new home of a 25-year-old Calabasas business named Drapes 4 Show Inc., which has made linens for Air Force One, swanky hotels, exclusive celebrity weddings and Hollywood movie sets.

The company had been leaving for Las Vegas, where many of its products are used, because it couldn’t find a suitable site for growth. Everything the company looked at in Los Angeles and Orange counties was too small, too expensive or too far from its workers.

But the company that was founded in a schoolteacher’s garage had learned that it pays to look for expert help when problems arise. This time, it came from a $900,000 grant and loan package from the Community Redevelopment Agency of Los Angeles, approved by the City Council last week.

It’s interesting that the topic of Enterprise Zones is not raised - parts of the Sylmar area are within the new Los Angeles EZ.

Pasadena has become the fifth of the 23 Enterprise Zones conditionally designated in 2007 to receive its final designation.  They have also received approval for their new TEA, both the zone and the TEA have an effective date of 4/10/2007.

According to the Modesto Bee:

On Tuesday, the Stanislaus County Board of Supervisors approved an application to expand the county’s enterprise zone by 809 acres, with 620 acres in Turlock and 189 acres in Patterson. The enterprise zone provides tax incentives for companies that hire employees or purchase equipment. The current enterprise zone, approved two years ago, encompasses 67,509 acres. The Turlock area is part of the city’s Westside Industrial Specific Plan, and is scheduled for annexation to the city. The Patterson land is in three parcels: eight acres in the north area of the city where Highway 33 and Ward Avenue meet; 138 acres along Highway 33 between Olive and Sperry avenues and including downtown commercial areas; and 43 acres in the south, including commercially zoned property. The expansion needs the approval of the California Housing and Community Development Agency. The county can expand the enterprise zone by 10,126 acres, according to state rules on the zones.

I am tentatively scheduled to appear on a panel of experts for a Compton Enterprise Zone “Roll-Out” Seminar on February 20. Their press release states:

The City of Compton Planning and Economic Development Department is hosting an Enterprise Zone Roll-Out Seminar for Compton’s businesses, businesses desiring to relocate to the City of Compton and to residential and commercial property owners. The seminar will be held on Wednesday, February 20, 2008 from 8:00 a.m. – 12:00 noon at the Crystal Park Hotel. The Seminar will consist of panel presentations, Q & A sessions, and one-on-one discussions with experts in the field of taxation.

Expert panelists will answer questions such as: How do I know if I am located in an EZ? Which employees qualify me for the hiring tax credit? And, how do I claim EZ tax incentives?

Here is what the invitation looks like.

The seminar is free, but seating is limited. Email rojones@comptoncity.org for more information.

From the Desert Dispatch:

BARSTOW — A relatively new manufacturing facility is leaving Barstow, taking with it the jobs of several residents.

Ecolite Concrete decided to move to Moreno Valley and into a 81,000 square foot facility — nearly four times larger than its Barstow site on State Street. Ecolite representatives did not respond to calls seeking comment, but workers were removing office furniture and supplies at the facility on Wednesday.

Ryan Travis, commercial associate with Colliers International BradCo, which rents out the building, said that Ecolite’s departure was unexpected.

“I don’t think they were planning to leave Barstow,” he said.

…

The city’s economic development director Ron Rector said that he thinks the company’s Army contract ended. He said he doubts Barstow’s economy will be overly impacted.

“I don’t think it will have any effect,” he sad “Businesses are always coming and going; it’s my job to make sure there’s more coming than going.”

Rector said that the company had planned to expand its Barstow operations and employ as many as 45 workers. He said he wasn’t sure how many people Ecolite employs in Barstow but said only five or six would likely lose their jobs.

Rector said that the city had spoken with Ecolite officials to consider moving to the city’s Enterprise Zone, where they would be eligible for tax benefits but the company declined. The city is working with the business community and developers to fill the soon to be vacant space, Rector said.

The first article I could find expressing the reaction of one of the five losing EZ applications comes from the Desert Sun:

The western Coachella Valley on Thursday lost a statewide competition for tax breaks to boost economic development in Desert Hot Springs, Cathedral City and unincorporated areas.

The region was not among the eight new enterprise zones announced by Gov. Arnold Schwarzenegger as part of the state’s plan to aid economically distressed areas.

“It’s a huge disappointment for all of us,” said Riverside County Supervisor Marion Ashley, whose district includes the proposed zone.

“We saw that as a centerpiece for business attraction and retention,” added Rick Daniels, the city manager of Desert Hot Springs.

…

Thirteen applications were submitted for the eight zones open this year and seven of the new designations went to communities that had previously expired zones.

“I don’t think you have a leg up if you are a existing zone or not,” said Chris Westlake, deputy director for the division overseeing enterprise zones in the state Department of Housing and Community Development.

“You are starting from scratch with us,” he added.

Westlake said each application, which can cost in the range of $100,000 to prepare, is judged on a point system in eight categories, from unemployment and job development plans to marketing and property availability.

“They didn’t score very well,” he said of the valley application compared to the others.

Westlake said the scores of all the applicants will be posted on the Internet soon, and his staff will be glad to discuss the choices with applicants, which is just what valley leaders want.

“We want to find out about our scoring,” said John Soulliere, president and CEO of the Coachella Valley Economic Partnership, “to see if there are any issues with our application that would make it impossible for us” to apply again.

If not, then Ashley and Daniels said they plan to give it another shot.

“If we can, within a year or so, we’ll gear up and try to win next time,” Ashley said.

Westlake said there will be four open zones for new designations in 2009. Zones are good for 15 years.

The valley leaders said such a designation is really a key tool for business development, especially in trying to attract firms from out of state.

“My problem as an economic development professional is (that) without an enterprise zone or other benefits zone, a (prospective) business, unless they are flat out in love with California or willing to throw money away, it is hard to attract here,” Soulliere said.

The Sacramento Bee: “W. Sac designated as state Enterprise Zone”

The Sacramento Business Journal: “Governor tabs West Sac as one of eight enterprise zones”

The Monterey County Herald: “Your Town: Salinas Valley pegged for state economic program”

The Lodi News-Sentinel: “Will a state zone marker boost Lodi’s job growth?”

The Salinas Californian: “Valley given a business boost”

The Los Angeles Business Journal: “State Targets East L.A. Economy”

The Stockton Record: “S.J. beefs up enterprise zone”

The Orange County Register: “State renewing program to encourage Santa Ana businesses”

The Desert Sun: “Valley loses tax break bid“

The debate will be held tonight at the Kodak Theatre at the corner of Hollywood & Highland, right in the heart of the new Hollywood Enterprise Zone.

The Santa Clarita Enterprise Zone has launched a unique marketing tool:

On Monday, January 14, 2008, the City of Santa Clarita unveiled its newest advertising tool for promoting the Enterprise Zone – 100 street pole banners placed throughout the industrial and commercial areas of the City. The banners will provide an awareness of the newly designated Santa Clarita Enterprise Zone while reminding businesses that they can save money just by being located “in the Zone.”

The Oroville Mercury Register reports on the formation of a new economic development collaboration including the Enterprise Zone there.

The Los Angeles Times has an extensive story on the City’s plan to remake Broadway in downtown and some of the conflict that this will generate:

City officials today will announce a new campaign to remake downtown Los Angeles’ historic Broadway corridor by redesigning the bustling street, fixing up some of the grand movie palaces and restoring the fading facades of buildings.

The city and private developers have earmarked nearly $40 million to begin the effort this year, hoping to pull the gentrification that has swept much of downtown into the district’s main commercial area. They envision many of the movie facades giving way to a live “theater district” forming on the street, with a trolley car system running down its center.

But the revitalization is already creating something of a culture clash. While the downtown development boom has brought thousands of mostly white-collar professionals into lofts and luxury high-rises, Broadway has for decades been the premier shopping destination for working-class Latinos.

And you can watch online a fascinating segment from 60 Minutes about the sub-prime mortgage crisis. Stockton, the foreclosure capital of the country, is featured:

Stockton is a city of 280,000 people in the Central Valley; 80 miles east of San Francisco and 80 miles north of San Jose. In many ways, this is ground zero for the current financial crisis and a microcosm of everything that went wrong.

A few years ago, it was one of the hottest real estate markets in the country; today it is the foreclosure capital of America.

Real estate agent Kevin Moran represents 102 properties and says all of them are in foreclosure.

Moran gave Kroft a tour of the wreckage in one subdivision called “Weston Ranch,” with block after block of vacant and abandoned houses.

“If you see a ‘for sale’ sign in this neighborhood, that probably is a sign of distress, right?” Kroft asks.

“I would say that, yeah. Two out of three of all the sales are probably foreclosed properties, and/or people who are in distress,” Moran explains.

From the Los Angeles Times:

Clinton was warmly received at the Citizens of Zion Missionary Baptist Church, where she told the largely African American audience that they need a president who will remember them from a distance of 3,000 miles.

“Compton is birthing a community, but you can’t do it alone,” Clinton said. “You need to know that someone all the way across the country is rooting for you and will be thinking about you every day. What is it that I can do to make sure this birth is easy and successful and [help] you bring forth a beautiful new Compton?”