The Center of the California Enterprise Zone Information Universe

Still Waiting for Final Designations

Here is an interesting article in the Santa Clarita Valley Signal regarding the progress HCD is making on issuing final designations to the remaining 8 conditionally designated Enterprise Zones. The article deals with Santa Clarita specifically, but many of the issues could be extrapolated to other zones.

The article suggests that final designation will take until April to complete. The memo issued by HCD on October 10, 2011 stated a 180 day deadline with no exceptions – that clock will run out in April. The article also states that at least Santa Clarita will be made effective retroactively to Jan. 1, 2011 even though they received their conditional designation on Dec. 15, 2010.

Here is the entire article:

The deadline for transitioning the new local Enterprise Zone, by the California Department of Housing and Community Development, is April 10, said Jonas Peterson, president and CEO of the Santa Clarita Valley Economic Development Corp.

“This is great news in that the city, county and Economic Development Corp. finally have a timeline to work with for bringing our new Zone online,” Peterson said.

The valleywide zone was initially approved effective Jan. 1 of last year, but Gov. Jerry Brown called to eliminate the program early last year under his proposed budget plan in order to recoup additional revenues to address California budget deficits.

In an interview with Peterson this spring, he said the plan did not factor in the tax revenue, jobs or tax savings benefiting local communities that have enterprise zones.

The Housing and Community Development department, which administers the Enterprise Zone Program, has been holding “listening sessions” to gather feedback from communities as it considers regulatory changes.

“We’ve been invited to participate in upcoming listening sessions with the state,” Peterson said.

“Our goal is to participate, offer suggestions and work with the state to keep the EZ program as strong as possible.”

Assembly member Manuel Perez, D-Coachella, an advocate for local economic development and chairman of the Assembly
Committee on Jobs, Economic Development and the Economy also sponsored an enterprise zone reform bill, AB 231, to preserve the enterprise zone benefits through reforms.

“The EZ program is an effective tool for local economic development, and the reforms in AB 231 will help to better tell that story,” Perez said.

The key fact for SCV business owners to keep in mind, Peterson said, is when the local Enterprise Zone program receives final approval, the benefits will be retroactive to Jan. 1, 2011.

“This retroactive effective date means that companies in the zone will be able to qualify hiring and investing activity that occurred in all of 2011.”

While applications will not be processed until final approval of zone expansion is granted by the state, Peterson said companies should proceed with hiring and investing.

“When final approval does come, businesses in our unincorporated areas will be able to apply for benefits based on 2011 activity.”

The city of Santa Clarita already has an enterprise zone program, which received final approval July 1, 2007. The city’s program is active through June 30, 2022. The valleywide program will encompass companies previously not located within the city limits.

The Santa Clarita Valley pushed hard to save the Enterprise Zone program from elimination last year through a broad coalition with support from the city, county, EDC and chamber, Peterson said.

“Together, we had one of the strongest delegations in the state. If necessary, I’m confident we can duplicate that effort again this year.”

Last March, an informal coalition of enterprise zone advocates from the local business community, city of Santa Clarita, SCVEDC and SCV Chamber of Commerce met with 18 state legislators in Sacramento to explore ways to salvage the program.

Companies, organizations and community leaders submitted letters and made calls to legislators in support of the EZ program.

“Our elected state officials, including Assemblyman (Cameron) Smyth, Sen. (Sharon) Runner and Sen. (Tony) Strickland were all very supportive,” Peterson said.

In addition to visits to the state capital, and calls and letters to legislators, local companies Aerospace Dynamics International, Stay Green and AT&T also visited with government leaders in Sacramento in support of the program.

Company executives spoke of the economic benefits derived from the program and were able to cite specifics as to how many people they’ve hired and whom they had hired as a result of the program giving legislators a chance to hear from real employers.

Santa Clarita was identified by the Department of Housing and Community Development as having one of the best-run enterprise zones in the state, citing it as a model program.

Follow maxshenker on Twitter

Receive By Email

Enter your email address and receive the EZ Policy Blog by email.