Governor Schwarzenegger Announces Six Enterprise Zones In L.A. County

23 Statewide to Spur Job Growth, Economic Development

Gov. Schwarzenegger Announces Six Enterprise Zones in Los Angeles County, 23 Statewide to Spur Job Growth, Economic Development

Santa Clarita named as a new California Enterprise Zone! Continuing his efforts to create jobs and a positive business environment, Gov. Schwarzenegger announced today the conditional designation of the City of LA-Central/Hollywood, Compton, Long Beach, Pasadena, Santa Clarita and Southgate/Lynwood Enterprise Zones in Los Angeles County, part of 23 Enterprise Zones he named statewide.

"Since I became Governor, I have worked tirelessly to improve the business climate and create more than 650,000 new jobs," said Gov. Schwarzenegger. "By using incentives like hiring credits or sales tax credits, these Enterprise Zones can harness the entrepreneurial spirit of our state and help draw business investment to economically depressed areas. Enterprise Zones lead to more jobs, less poverty and long-term economic stability."

The new designations will take the place of the 23 zones set out in statute which are expiring over the next several months. Each zone designation is in effect for 15 years.  Santa Clarita received the designation as a California Enterprise Zone for the first time this year, crediting the support of Senator George Runner, Assemblyman Keith Richman and Governor Arnold Schwarzenegger.  The Santa Clarita enterprise zone encompasses 98% of all of the commercial, business and industrial zoned land within the City.
 

“We are most appreciative of the governor’s recognition of Santa Clarita as a great place to do business in California and for the support of our local legislators in helping our business community realize the benefits of becoming an enterprise zone,” commented Mayor Laurene Weste.

The California Enterprise Zone Program targets economically distressed areas using special state and local incentives to promote business investment and job creation.  By encouraging entrepreneurship and employer growth, the program strives to create and sustain economic expansion in California communities. Businesses within Enterprise Zones are eligible for substantial tax credits and benefits including:

·       Firms can earn $31,234 or more in state tax credits for each qualified employee        hired.
·       Corporations can earn sales tax credits on purchases of $20 million per year of qualified machinery and machinery parts.

·       Up-front expensing of certain depreciable property.
·       Lenders to Zone businesses may receive a net interest deduction.
·       Unused tax credits can be applied to future tax years, stretching out the benefit of the initial investment.
·       Enterprise Zone companies can earn preference points on state contracts.
·       Up to 100% Net Operating Loss (NOL) carry-forward. NOL may be carried forward 15 years.

In August, Gov. Schwarzenegger released a report commissioned by HCD that evaluated the success of Enterprise Zones in spurring economic recovery. The report shows that from 1990 to 2000 Enterprise Zones on average experienced:

·       Poverty Rates: declined 7.35 percent more than the rest of the State
·       Unemployment Rates: declined 1.2 percent more than the rest of the State
·       Household Incomes: increased 7.1 percent more than the rest of the State
·       Wage and Salary Income: increased 3.5 percent more than the rest of the State

The next step in the designation process will be the Department of Housing and Community Development's (HCD) issuance of a conditional designation letter to each of the new zones.  The letters will outline conditions which must be met to be granted final designation.   Examples of conditions include preparation of an Environmental Impact Report and a signed memorandum of understanding with the Department which includes performance measures and benchmarks. 

The 23 new zones touch every major region of California:

Central Valley 24,377 businesses located within the zone; 12,266 hires the first year  
City of Arvin   City of Arvin  
Delano          City of Delano 
Fresno-City     City of Fresno 
Fresno-County   Cities of Fowler, Firebaugh, Kerman, Mendota, Orange Cove, Parlier, San Joaquin, Sanger, Selma, County of Fresno       
Merced  Cities of Los Banos, Atwater, Dos Palos, Gustine, Livingston, Merced, County of Merced 

Greater Sacramento/Stockton 3,683 businesses located within the zone; 3,900 hires the first year       
North Sacramento        City of Sacramento, County of Sacramento       
Yuba Sutter     Cities of Marysville, Yuba City, Wheatland, Live Oak, Counties of Yuba and Sutter    

Inland Empire/Imperial Valley 5,651 businesses located within the zone; 3,225 hires the first year     
Calexico        City of Calexico, County of Imperial   
City of San Bernardino  Cities of San Bernardino and Colton, County of San Bernardino, Inland Valley Development Agency
Coachella       Cities of Coachella and Indio, County of Riverside  
   
Los Angeles Region 80,653 businesses located within the zone; 19,880 hires the first year      
City of LA-Central/Hollywood    City of Los Angeles - Hollywood and Central City       
Compton City of Compton
Santa Clarita   City of Santa Clarita  
Long Beach      City of Long Beach     
Pasadena        City of Pasadena       
City of Southgate/Lynwood       Cities of Southgate and Lynwood

San Diego 8,640 businesses located within the zone; 2,500 hires the first year.
San Diego       Cities of San Diego, Chula Vista, National City

Bay Area 38,067 businesses located within the zone; 6,000 hires the first year         
Richmond        City of Richmond       
San Francisco   City and County of San Francisco       
San Jose        City of San Jose  
     
Northern California 7,810 businesses located within the zone; 1,900 hires the first year       
Shasta  Cities of Redding, Anderson, Shasta Lake, County of Shasta     
Eureka          City of Eureka, County of Humboldt     
Oroville        City of Oroville