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Proposal to Combine Imperial Valley Zones

From IVPressOnline.com:

Two cities in Imperial County are classified as disadvantaged, though the state may expand the coverage to include most of Imperial County.

However, instead of being a negative, the classification, along with a distinction of an enterprise zone, would benefit businesses by offering tax credits for new hires and some purchases.

The Imperial County Board of Supervisors will look today at whether it wants to pursue combining the Imperial Valley Enterprise Zone with the Calexico County Enterprise Zone, as well as combining the zone to include other cities in the county.

An enterprise zone is a state classification that an area is disadvantaged, which would mean that it has high unemployment, low average income and low wages, Diane Cason, manager of the Imperial Valley Enterprise Zone based out of Brawley, said. The zone classification helps to create jobs by drawing in businesses and keeping them in the area.

“It’s a business attraction tool,” she said.

The zones allow businesses in the area to receive tax credits, like a hiring credit that could save businesses $37,400 per person throughout a five-year period on income tax if the business hires qualified employees, she said. Qualified employees are those that are processed through the One-Stop Career Center, like those on unemployment.

Businesses can also save on sales tax on qualified equipment, like phones and some manufacturing machines, she said. Individuals can save up to $1 million and corporations can save $20 million.

“It’s a tremendous advantage,” she said.

Enterprise zones help businesses in retail, manufacturing, food processing and professional services like doctors, she said. Some of the businesses that utilize the Imperial Valley zone are Spreckles Sugar Co., Brawley Pharmacy and CalEnergy.

It makes the area more competitive for businesses outside of the area and in other states, because it offsets taxes, she said.

“I think that it has helped retain the businesses here,” she said. “It’s just part of an economic tool.”

It has helped increase jobs in Calexico, Calexico County Enterprise Zone Manager Daniel Fitzgerald said. In 2009, at least 40 vouchers were approved for new positions.

“That’s 40 people who previously didn’t have a job,” he said. “That’s in 2009, which was a bad year.”

Getting the classification of an enterprise zone is a competitive process with a four-inch stack of papers for an application, he said. There is a limit of 42 enterprise zones in California.

The reason that the board will be looking to an enterprise zone now is because of how intensive the application process is, he said. The application isn’t due until Aug. 18.

At least Calexico, El Centro, Imperial and Brawley will have to sign on to the agreement to become an enterprise zone in order for the state to combine the two current ones in Calexico and Brawley, he said. There can’t be huge gaps between the zone.

Others, like Holtville, Westmorland and Calipatria, will get the option to join, but it does cost money to be part of the zone, he said.

One disadvantage to creating a countywide zone is it might reduce the appeal of being in one of the current zones, he said. However, the main competition isn’t within the state.

Places like Arizona and Texas are appealing to businesses because of lower taxes, he said. Within an enterprise zone, the taxes are able to be offset.

Neither Fitzgerald nor Cason would say if they support combining the zones, but county Planning Director Jurg Heuberger showed his support in a letter to the Board of Supervisors.

It would not limit businesses to either Calexico or Brawley, he wrote. It would reduce any competition between zones in the county.

“It is my opinion by making this zone available to all qualified areas of the county, namely some of the town sites as well as all of the remaining five cities, we can’t lose and only win,” he wrote

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