While going through the Enterprise Zone commentary this past week I found a great post by Randy Gordon, the President and CEO of the Long Beach Area Chamber of Commerce discussing the absolute need for the EZ program that the state of California provides.

Below are some of my favorite thoughts that he posted, “We are in a time of double-digit unemployment rates, significant underemployment, minimal economic diversity, budget deficits, and a record-high of inventory of vacant business and industrial space. Expansion, not elimination of the California Enterprise Zone program that rewards businesses and employees for locating and expanding in economically challenged neighborhoods, including a large portion of Long Beach, should be encouraged.

The California Enterprise Zone (EZ) Program does exactly that, which is why we will be asking you to follow our lead and contact your representatives in Sacramento and urge them to protect the Enterprise Zone Program and oppose any attempt to dissolve or decrease enterprise zone areas or incentives.

Tax incentives that are part of Enterprise Zones include such things as equipment, hiring, worker credits, tax deductions, and preference points that can help them secure state-sponsored contracts. In other words, tools that attract businesses and promote economic development.”

It’s taken a while, however the Santa Clarita Valley region has hired a lobbyist to ensure that the area’s interests are represented well at the capital.

Natalie Everett, from the Signal, reports the following regarding the hire, “Damian Jones has 15 years of experience in the field, including a stint as The Home Depot’s government relations senior manager. His firm, Pacific Strategy Group, represents about 350 clients in 17 offices across the nation. One of the first issues Jones will tackle is securing Santa Clarita’s enterprise zone. A bill is making its way through the state Legislature that would make eligibility for the lucrative tax breaks – up to $37,000 for one employee over five years – harder to get.”

“(We recently) held a forum for existing business owners asking them what were the benefits of doing business in the Santa Clarita Valley, and the No. 1 answer was availability of the enterprise zone,” Jones said. “Real dollars are being saved, it’s improving our economy, and people are trying to … minimize their impact.”

It’s great to see cities from around the state are realizing the importance of the Enterprise Zones and are putting the resources needed behind their plans.

Following up on our coverage of the Redlands move to join the local San Bernadino Enterprise Zone, below are the detailed city council discussion and presentation.

Click here to view the minutes of the meeting.

The City of Brawley is in the heart of the Imperial County, which is located in the s­outh­eastern part of the State of California. It is situated approximately 210 miles southeast of Los Angeles, 126 miles east of San Diego, and 30 miles north of Mexicali, Mexico. Brawley is a general law city incorporated in 1908 and has a Council Manager form of government. The 20­07 population is estimated to be 25,694 as reported by the State Department of Finance.

The city of Brawley has a wide range of business credits, if you have a company in the city, please contact us to see which credits you qualify for.

San Jose is the 3rd largest city in California, and the 10th largest in the US. It is the county seat of Santa Clara County. San Jose is located in Santa Clara Valley, at the southern end of the Bay Area, a region referred to as Silicon Valley. Once a small farming city, San Jose became a magnet for suburban newcomers in new housing developments between the 1960s and 1990s, and is now the largest city in Northern California. The United States Census Bureau population estimates the city’s population for 2007 as 939,899.

Companies located within the City of San Jose Enterprise Zone may be eligible to receive a tax credit for hiring individuals meeting certain qualifications. If you meet any of the following eligibility criteria you may qualify for the Enterprise Zone hiring credit.

If you want to explore the available tax credits you are entitled to, contact us directly for a free consultation.

The City of Taft was recently awarded the Enterprise Zone designation. “California Enterprise Zones give communities a chance to develop their economic potential, improve their quality of life and contribute to the state’s economy. Enterprise Zones are part of the Administration’s ongoing efforts to increase the number of jobs through state and local incentives,” said HCD Director Lynn L. Jacobs. “This is the single most important building block for Taft’s economic growth that the city has had in many, many years,” said Lucille Holt, Taft City Grants Administrator. “Its good news because it is not just for new businesses, but for existing Taft businesses as well.”

Businesses within Enterprise Zones are eligible for substantial tax credits and benefits, for example:
- Firms can earn $37,440 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.
As you can see, Kern County and the City of Taft are positioned for an exciting future. We are also working with 4th District Supervisor Ray Watson regarding other plans that will create even more exciting possibilities for the greater Taft area.

The State of California designated a limited number of Enterprise Zones throughout the state to encourage business expansion. For businesses located within an Enterprise Zone, this translates to California tax savings and incentives that can substantially reduce their operating costs. When those incentives are coupled with the additional local incentives, the opportunities and savings are greatly enhanced.

Located in Central California, the Stockton/San Joaquin Enterprise Zone provides business with easy access to all major markets. Interstate 5, State Highway 99, an airport, a nationwide railway system (Burlington Northern Santa Fe and Union Pacific) and the Port of Stockton (on the Deepwater Channel) provide our Enterprise Zone businesses with direct links to world-wide markets.  In addition to the tax incentives for businesses, the Stockton/San Joaquin Enterprise Zone has readily available and favorably priced properties (improved and unimproved), a semi-skilled and skilled workforce, and a public/private network that is committed to providing companies with a pro-business environment.

The Stockton/San Joaquin Enterprise Zone provides businesses with the following savings:

State Tax Credit Incentives

• Hiring Credit ($31,000+ per new employee over a five-year period)
• Sales & Use Tax Credit (On machinery purchases for manufacturing)
• Business Expense Deduction (Up to $20,000/year on tangible personal property)
• Net Operating Loss Carryover (Up to 100% carryover to future years)
• Net Interest Deduction for Lenders (May result in 3-4% increase on return of investment)

Local Incentives

• Reduced Fees -50% discount on Building Permit, Plan Check, Use Permit and Variance Fees
• Development Coordination
• Early Project Review (ERC) Meetings
• One-Stop Permit Centers
• Fee Deferral Program
• Fee Estimates
• Utility Tax Rebate
• Commercial Property Transfer Tax Rebate Employee

Job Recruitment

• Customized Staff Recruitment services at no charge
• On-the Job Training Programs. Wage reimbursement for hiring & training qualified employees
• Specialized Training Programs tailored to your company’s specific needs

Financing Opportunities

• Small Business Administration (SBA) Financing SBA 504 and 7A – discretionary loan packaging fees are waived or deferred
• San Joaquin County Revolving Loan Fund (RLF) Loan packaging fees waived and discounted interest rate
• Stockton’s Façade Improvement Forgivable Loan Program and Downtown Financial Incentive Program

The Orange County Business Council has endorsed State Senator Lou Correa, representing the 34th state Senatorial District, for re-election. Correa is an advocate of the Business Council’s key initiatives to enhance infrastructure investment, increase supply of workforce housing and promote solid education programs to ensure a skilled 21st century workforce.

“We are pleased to endorse Senator Lou Correa for re-election because of his strong record of support for OCBC’s business agenda,” said Lucy Dunn, President and CEO of the Orange County Business Council.

Senator Correa understands the connection between a strong business environment, sustainable infrastructure and jobs creation. He has been supportive of expansion of the 91, a vital link in goods and people movement between the Inland Empire and Orange County, as well as expansion of the 57, and he has been the long-time advocate of the completion of the Santa Ana River project. OCBC applauds the leadership Senator Correa has shown in supporting the comprehensive water package, a critical issue that directly impacts California’s future growth and sustainability, both economically and environmentally.

Throughout his years of service in the Assembly and in the Senate, Correa has championed a number of legislative proposals, balancing the needs of the business community, environment and social equity, working to ensure a high quality of life for both Orange County and the state. Senator Correa introduced legislation that proposed a simple and sensible reform to the California Environmental Quality Act (CEQA) that doesn’t diminish its authority, but helps to facilitate the process and he also supported additional housing legislation that helps with home affordability by reducing regulatory red tape that drives up costs. He has co-sponsored Enterprise Zone legislation, rightly seeing that the path to California’s economic recovery starts with giving business effective tools to create jobs and begin to grow again.
State Senator Lou Correa was elected to the 34th Senate District in 2006, representing Anaheim, Buena Park, Fullerton, Garden Grove, Santa Ana, Stanton and Westminster. In 2004, Correa was elected to the Orange County Board of Supervisors, representing central Orange County. Prior to his election to the Board of Supervisors, he served as a State Assembly Member from 1998 to 2004 representing the 69th District.

Local businesses in San Francisco may soon find themselves being able to take advantage of new state tax credits. Many people don’t realize that the San Francisco region is already an Enterprise Zone, however the city is considering applying for an expansion for 2010. One of the main areas that would benefit the most from an Enterprise Zone designation is the old Hunters Point Naval Shipyard, which has re-development plans for new stores, restaurants, etc. to bring life back into the area.

These plans are following up on the 2007 EZ expansion that increased the size of the zone to nearly 6,000 acres throughout the city.

So why did Downey get the new Tesla plant over Long Beach? See below for Gerrie Schipske’s view on the situation. This article was what she posted on her blog:

Gerrie Schipske, councilwoman for Long Beach’s fifth district, has been outspoken in her desire to keep alive the possibility of Tesla Motors locating its plant in Long Beach.

She personally contacted Elon Musk, President of Tesla to ask him what the City of Long Beach was doing to encourage his company to locate there. She also mounted a letter writing campaign called “Long Beach — We Can Do Better Than Downey.”

She used her blog to prod Long Beach officials to actively market the City to get Tesla here. So today upon learning that Tesla has signed a letter of intent with Downey to locate a plant which will manufacture 20,000 electric vehicles and produce 1,000 jobs she issued the following statement:

“The taxpayers of Long Beach deserve a full explanation about who or what killed the deal to bring Tesla to Long Beach. How did we lose this revenue producing opportunity to Downey? Long Beach has so much more to offer to a business than most southern California locations — we have manufacturing space at the Boeing site, nearness to freeways, an airport, a port, railroad, convention center, training programs at our local community college and most importantly a workforce ready and willing to work. We also have an enterprise zone that provides tax credits for employers. And just recently the City announced it won the ‘Most Business Friendly City Award’ in Los Angeles County.

So what went wrong?

Anyone who has worked in corporate America knows how important it is to develop positive relationships in order to do business, which is exactly what the City of Downey did and the City of Long Beach did not do.

Unlike the City of Downey, which marshaled its Mayor and Council to actively court Tesla through calls, letters, ads and personal outreach, Long Beach apparently treated Tesla as a ’second-class citizen’ according to comments made to me and to the press by Tesla President, Elon Musk. (It would be interesting to examine how much time and effort was really expended by Long Beach officials and staff in recruiting Tesla.)

I would like to congratulate the City of Downey for getting Tesla, and thank them for helping to keep these important types of jobs in the region.”