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Mayors Advocate For Enterprise Zones

Mayors from around the State have been in Sacramento advocating for the Enterprise Zone Program in the wake of the loss of Redevelopment.

The Los Angeles Daily News, for example reports:

In Sacramento, Villaraigosa will also explore legislation to spur development in the absence of CRA/LA funds, said [Deputy Mayor Sarah] Sheahan.

“We are advocating for the tools L.A. will need to create jobs, such as state enterprise zones,” Sheahan said, cautioning that the mayor isn’t advocating for a “new CRA.”

In Watsonville, however, the situation is more urgent. The Mercury News explains:

WATSONVILLE – For nearly 15 years, Watsonville has dangled tax breaks as a lure to businesses looking for a new home or an incentive for existing companies to expand.

But in April, the city’s state-approved enterprise zone expires, leaving the city with few tools to stimulate the local economy at a time when more than one in five workers is out of a job, officials say.

“It’s very tough, especially on the back of losing redevelopment,” said Jan Davison, interim redevelopment and housing director. “We’re losing the only other form of economic development assistance we had. It’s a double whammy.”

The state Supreme Court ordered the elimination of redevelopment agencies statewide in a late December ruling. The City Council on Tuesday will take the first step toward dismantling the local agency by designating a successor to distribute assets and ensure obligations are met.

On Monday, city leaders advocated for help on the redevelopment front as well as for an extension of the enterprise zone during meetings with legislators in Sacramento.

Mayor Eduardo Montesino said leaders came away without a clear answer.

“We’re pushing everybody,” he said, “but it’s a fluid situation.”

California established enterprise zones in 1984 to spark economic investment in depressed areas of the state. Watsonville’s enterprise zone, one of 42 in the state, was established in 1997.
The program aims to jump-start private investment by providing tax credits for hiring and equipment purchases.

According to the California Association of Enterprise Zones, the program was responsible for creating or retaining more than 118,000 jobs in California in 2010.

Critics, however, say the program costs too much and merely shifts jobs from one region to another.

Last year, Gov. Jerry Brown proposed to eliminate the program, a move the state Department of Finance said would save $343 million in 2010-11 and $581 million in 2011-12.

The program was spared, but the state Department of Housing and Community Development, which oversees the program, is not currently accepting renewal applications.

Julie Lambert, director of finance and human resources for S. Martinelli & Co. in Watsonville, said her company uses the program and called it a “valuable” resource for business as well as the city. She said it could use some tinkering to help businesses plan better. For example, legislators have changed the timing on when tax credits on equipment purchases can be used from year to year.
But she said the enterprise zone does spur economic development.

“It’s very valuable for the city for attracting new business, whether they’re in startup mode or expansion mode,” Lambert said. “It’s another gold star on the evaluation sheet as they decide where to locate their business.”

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