Despite a strong effort, the State of California has not given the city of Oxnard its desired Enterprise Zone. This has caused a significant stir in the region, since, from all appearances, Oxnard seemed to be an excellent candidate.  Instead of Oxnard, the state chose to award its new designations to:

• Hesperia
• Taft
• Tulare
• Pittsburg
• Sacramento

The Pacific Coast Business Times showed considerable consternation at the state’s decision:

“Oxnard is the biggest city in the biggest county in the tri-county region. It has a pro-business attitude, plenty of land and utility resources, a large and eager workforce and a desire to lead the state’s economic recovery. But that apparently means nothing in Sacramento, where the California Enterprise Zone Program recently turned down Oxnard’s request to join 41 other enterprise-zone locations in the state.”

Here’s an email I received from CAEZ president Craig Johnson about the two new hearings.

Dear CAEZ Members and Friends of CAEZ,

The Speaker of the Assembly has approved two additional Enterprise Zone hearings for the Assembly Committee on Jobs, Economic Development and the Economy. The first is scheduled for October 8 in the Bay Area and the second will be held October 14 in Southern California. Each of the two hearings will have different topics, unknown to us at this time, as is the exact location of the hearings.

Your CAEZ leadership will be meeting with the Enterprise Zone Coalition to discuss strategy and potential speakers, once we know the topics to be discussed and the hearing format. If any of you are available to attend one or both of these hearings, there will be a public comment period where the public is encouraged to speak on any topic related to the Enterprise Zone program. It would serve CAEZ and the EZ program well, to have as many public comment speakers as possible speaking in support of the program. Your active participation in this process is critical to the continued success of the EZ program.

I will keep you apprised as more information is released.

Thank you for your continued support of CAEZ and the Enterprise Zone Program.

CRAIG JOHNSON
President
California Association of Enterprise Zones

FREMONT, CA (KGO) — Toyota announced the news thousands of Bay Area auto workers feared — it is ending production at the Fremont NUMMI plant. This, as plant managers get set to meet with leaders of the workers’ union later on Thursday afternoon.

The Toyota board voted very early this morning to end production at the NUMMI plant in March of 2010 and that will affect about 4,600 employees. Many of them rallied last week and hoped to changed the decision about keeping the facility operating.

NUMMI is the largest auto manufacturing plant west of the Mississippi and it could impact as many as 35,000 people tied to the production in the supply chain. The joint venture between Toyota and General Motors has been very successful since 1984, but the operation was thrown into turmoil in June when GM announced it was withdrawing the 50/50 joint venture and its partnership as part of its bankruptcy proceedings.

Essentially, the workers and this surrounding community now have six months notice, and many people say it is not over despite Toyota’s announcement.

Following the announcement, Lt. Governor John Garamendi said that a resolution must be reached to save the last auto plant in California. He is talking about perhaps stimulus money or an enterprise zone. There was also some legislation mentioned in Sacramento prior to Toyota’s announcement, and Lt. Governor Garamendi said those efforts will continue despite the announcement.

In this economy, everyone is trying to bring in business any way they can. Real estate professionals have been busy touting the EZ benefits to potential buyers. Often, I come across real estate ads touting the EZ benefits for buyers or lessees. Here is a recent video from a Santa Clarita agent.

The Hesperia Daily Press proudly proclaims the success Hesperia had in managing to outbid many other cities to obtain Enterprise Zone designation.  Below is the article:

HESPERIA • The state has named Hesperia as one of five new enterprise zones that will allow businesses to generate millions of dollars in tax credits.
Hesperia, along with  along with Sacramento, Taft, Pittsburg and Tulare have been only conditionally designated at the moment, according to Steve Lantsberger, Hesperia’s head of economic development. But it’s essentially just a matter of some signing agreements between the California Department of Housing and Community Development and the city before it’s official.
“We spent a lot of time going through all of the requirements so that, if we were successful, there’d be very few things we’d have to do if we were conditionally designated,” he said Thursday. His office began working on the application 18 months ago, and the city will be an enterprise zone until 2024.
The enterprise zone covers most of the city, outside of residential areas. Businesses already operating in the zone as of Aug. 19 are eligible, as are new businesses.

As five new cities rejoice at being designated as Enteprise Zones, some others, including Escondido, are deeply disappointed at having missed the chance to boost their local ecomony.  The San Diego Union Tribune had this to say:

ESCONDIDO — Escondido’s hopes of becoming an enterprise zone to boost its economy have been quashed.

It lost in the latest round of California Enterprise Zone applications to five other cities: Sacramento, Hesperia near Victorville, Pittsburg in the Bay Area, Tulare near Fresno, and Taft, north of Los Angeles.

“What a disappointment,” Mayor Lori Holt Pfeiler said. “We were hoping to add it as a tool to help revitalize our underused area (industrial district).”

The city had hoped to use an enterprise-zone designation and the tax credits it gives to businesses to attract high-tech corporations to diversify Escondido’s revenue.

Almost 40 percent of Escondido’s general fund income now comes from sales tax, which is plummeting and resulting in budget deficits.

In March, the city applied to the state Department of Housing and Community Development to become an enterprise zone, proposing an area that covered almost the entire city.

It was roughly bounded by Country Club Drive to the west, state Route 78 and El Norte Parkway to the north and Midway Drive to the east. The southern border jogged along Oak Hill Drive, Juniper Street, Centre City Parkway and Ninth Avenue.

But Escondido soon learned that it faced record competition, and this week, the department announced that the city lost.

John Nunn, the state’s enterprise-zone program manager, declined to explain the reasons, other than the city scored lower.

Dennis Wyatt, reporting from the Manteca Bulletin, has said that the future Spreckles Park and Manteca Commerce Park firms are moving forward with Enterprise Zone strategies.

Wyatt reported that Manteca Chamber of Commerce Chief Executive Officer and Manteca Council Member Debby Moorhead believes not enough businesses know about the advantages of the enterprise zone designation or even what parts of Manteca are included. That is why the chamber made the enterprise zone the focus of its quarterly luncheon on Wednesday, Aug. 5.

If you have a business in the Manteca enterprise zone, please contact us directly for a free tax consultation.

Rebecca Matt from the HCD announced that several zones now have final TEAs including Kings County, LA East, Yuba Sutter and Siskiyou County. The HCD is close to finalizing Richmond, Delano, San Joaquin, Santa Ana, Merced, Oakland and West Sacramento. This will allow these newly designated Enterprise Zones to qualify employees for the credit.

Yesterday was the CAEZ quarterly meeting where a host of new faces were introduced to the EZ world. First, replacing Frank Luera at HCD will be Tom Bettencourt and John Nunn. Both men seem to be well suited for the role. Replacing Jeanne Harriman will be Jayme Mora and James Dudley. They have years of Enterprise Zone experience under their belt and seemed very inviting and helpful. James was even brave enough to give the group his email address. We look forward to a very supportive and beneficial relationship with both groups.

Toni Symonds, chief consultant for California State Assembly Committee on Jobs, Economic Development, and the Economy briefed the group regarding AB 1139. Looks like there will be a public hearing on August 18, 2009 and the bill will likely reach the Committee on January 5, 2010. The discussion will focus on what is the purpose and goals of the EZ and whether the program achieves these goals.

Also, AB 1554, a little known bill, should be garnering support by the CAEZ. AB 1554 aligns the reporting period with the period that HCD was actually administering the program. There will be much more to come, especially regarding AB 1139.

Last, the CAEZ annual conference is coming up on November 4-6 in Fresno.

The Enterprise Zone continues to have a powerful effect on how local businesses in California save money and grow their revenue.

“When you look at the whole picture – the enterprise zone program is an essential tool for economic growth in California,” says Craig Johnson, president of the California Association of Enterprise Zones. “The program delivers measurable benefits to our state by creating jobs and business growth opportunities for economically disadvantaged individuals and communities.”

Mr. Swenson’s research shows that the enterprise zone program decreases unemployment rates, boosts wage, salary and household incomes and decreases poverty rates, the association says.

“What this paper demonstrates is that to evaluate an enterprise zone program’s economic impact, we need to look at a number of outcomes – job growth, unemployment rates, income levels, business retention,” says Mr. Swenson in written comments provided by the association. “In the empirical study which I co-authored, we in fact found that the California Enterprise Zone program reduced unemployment rates, and increased incomes. This latter effect is consistent with increasing wages of EZ residents.”