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San Diego Zone Expansion and HCD Comments About Possible Regulations

I neglected to point out a large article on the Enterprise Program that appeared last week in the San Diego Union Tribune on the occasion of a new expansion approved for the San Diego zone. The article include a lot of positive information especially about opportunities for businesses in San Diego. Especially interesting, however, for folks who follow the issue closely, are comments made to the Tribune by HCD’s Colin Parent:

San Diego’s regional zone is one of 42 statewide, first authorized in 1984 and overseen by the state Department of Housing and Community Development.

“The enterprise zone is far and away the most lucrative program for businesses,” said Colin Parent, the department’s director of external affairs. “It provides the largest incentive and the fewest number of restrictions and caveats for companies.”

But the program’s success has been its undoing, at least for Gov. Jerry Brown, who in 2010 recommended abolishing the program to save the annual cost to the state budget, in fiscal 2012, $650 million.

Brown’s other cost-cutting proposal, eliminating local redevelopment agencies, did get legislative support but the enterprise zones were left untouched, thanks in part to the many Democratic legislators whose districts included zones.

“Now the approach of the administration has been to reform the program through the rule-making process,” Parent said.

The new rules, expected to be announced in the next few months, would eliminate new retroactive subsidies, a step that cut could the subsidy by a third, Parent said. Currently, companies that sign up for the program can apply for subsidies for workers they hired as much as five years earlier.

A second change would simplify the qualification process for veterans and people who were on welfare.

“The intent here really is to address some of these longstanding abuses of the program,” Parent said, “while improving the ability of the program to actually incentivize job growth.”

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