HomeMy WebLinkAbout2006-07-11 - AGENDA REPORTS - ENTERPRISE ZONE PGM (2)NEW BUSINESS
DATE:
SUBJECT:
DEPARTMENT:
Agenda Item: — 16
CITY OF SANTA CLARITA
AGENDA REPORT
Carne Rogers
City Manager Approval:
Item to be presented by:
July 11, 2006
ENTERPRISE ZONE PROGRAM OVERVIEW
Community Development
RECOMMENDED ACTION
City Council receive the Enterprise Zone Program overview.
BACKGROUND
The purpose of the California Enterprise Zone Program is to target areas throughout the state to
stimulate business and industrial growth. Special state and local incentives encourage business
investment and promote the creation of new jobs through business attraction and expansion as
well as business retention. The Enterprise Zone program is state's most significant tool to assist
local governments in leveling the playing field with other states in the highly competitive field of
business attraction.
The Enterprise Zone program is a 15 -year partnership between local governments and private
companies to generate new private sector investment and growth. The state provides
performance-based tax credits and incentives to businesses located within the Enterprise Zone
boundaries including:
1. Tax credits for sales and use taxes paid on qualified machinery or equipment
2. Tax credits for hiring qualified employees
3. Accelerated business expense deduction
4. Net operating loss carryover
5. Interest deductions for lenders on loan to companies within the EZ
6. Preference points on state contracts
State law requires that 42 Enterprise Zones be maintained at all times. During the last quarter of
RECEIVED
2006 and the first quarter of 2007, 23 Enterprise Zones will reach the end of their designation
periods. This round of Enterprise Zone designations is the largest since the Program's inception
and it is anticipated that it will be highly competitive, as a large number of those with expiring
Zones are expected to reapply for designation.
The heart of the application is the Economic Development Plan and the selection of the new
Zones will be based heavily on the scoring of this section. The Plan includes marketing strategy
and plan, available property and businesses, financing programs, job development and
vouchering plan, planning and local incentives, unemployment and area income levels, enterprise
zone program management, and infrastructure and capital improvement plan.
The Santa Clarita Enterprise Zone application is a regional economic development effort.
Partners in the application include College of the Canyons, Santa Clarita Valley Chamber of
Commerce, Valley Industrial Association, financial institutions, WorkSource California
One -Stop Career Center, job developers, brokerage firms and City staff from the Community
Development, Public Works and Administrative Services Departments and City Manager's
office.
The proposed boundaries of the Santa Clarita Enterprise Zone include nearly all of the
commercial and industrial property in the City.
The Enterprise Zone application is due to the State Housing and Community Development
Department, which also administers the Enterprise Zone Program, on September 6, 2006.
ALTERNATIVE ACTIONS
Other action as determined by Council.
FISCAL IMPACT
None by this action.
ATTACHMENTS
Enterprise Zone Map