HomeMy WebLinkAboutAgenda Report - February 20, 2013 C-14AGENDA
ITEM C* 14
CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Adopt Resolution in Support of the Enterprise Zone Program
MEETING DATE: February 20, 2013
PREPARED BY: Community Development Director
RECOMMENDED ACTION: Adopt resolution in support of the Enterprise Zone program.
BACKGROUND INFORMATION: California's Enterprise Zone program was established in 1984 to
stimulate business investment in depressed areas of the state and
create job opportunities for Californians.
According to the California Association of Enterprise Zones (CAEZ), in 2010, Enterprise Zones created
or retained more than 118,000 jobs while California experienced unprecedented unemployment.
When Governor Brown released his 2011-2012 budget proposal, he proposed the elimination of all
enterprise zone tax incentives, including Targeted Tax Areas, Manufacturing Enhancement Areas, and
Local Agency Military Base Recovery Areas. Tax benefits to be repealed included: hiring credits, credit
for sales tax paid, credit for employees who earn wages within the areas, and a deduction for interest
received from businesses in the area. The proposal was estimated to save the state over $300 million in
2010-2011 and almost $600 million in 2011-2012.
The challenge of eliminating enterprise zones in 2011 and 2012 was that it required a two-thirds vote of
the Legislature. Quite simply, the votes were not there and enterprise zones were retained. The
Governor responded by proposing a reform of the regulations that govern enterprise zones. As a result,
the Department of Housing and Community Development (HCD) has embarked on a task to make
changes to the enterprise zone program through the regulatory process, which would avoid the need for
a two-thirds vote. The revised regulations put forth by HCD look to limit retroactive vouchering, reduce
Target Employment Areas and restrict the expansion of zones. The CAEZ is concerned that these
proposed regulations will significantly reduce the effectiveness of enterprise zones, thereby providing
more justification to eliminate them all together.
While the regulatory reforms from HCD move forward, the election on November 6, 2012. has provided a
two-thirds supermajority in both the State Senate and the Assembly, providing the Governor what he
needs to eliminate enterprise zones once and for all.
Both the League of California Cities and the CAEZ recognize and support enterprise zones as one of the
only remaining tools that cities have for carrying out economic development and creating jobs. The
incentives provided through enterprise zone programs help existing businesses in California to expand
and create jobs, and to attract businesses from out of state.
APPROVED: - —
Konradt Bartlam, City Manager
Enterprise Zone
Page 2 of 2
In 2010, with unprecedented levels of unemployment, California's 42 enterprise zones employed more
than 118,000 employees on 10,000 companies. The San Joaquin County Enterprise Zone ranks in the
top three of the 42 California enterprise zones, with 1,241 businesses hiring 20,092 new employees.
The League of California Cities and the CAEZ are requesting that cities with enterprise zones;
• Adopt a Resolution supporting enterprise zones;
• Attend scheduled meetings with the legislator in your district and talk about the benefits of your
city's Enterprise Zone;
• Submit written comment to HCD on their proposed regulations by 5:00 p.m. on February 28,
2013.
FISCAL IMPACT: None required.
FUNDING AVAILABLE: None required.
Konradt Bartlam
Community Development Director
KB/jw
Attachment
RESOLUTION NO. 2013-20
A RESOLUTION OF THE LODI CITY
COUNCIL IN SUPPORT OF THE
ENTERPRISE ZONE PROGRAM
WHEREAS, California's Enterprise Zone program was established in 1984 to
stimulate business investment in depressed areas of the state and create job
opportunities for Californians; and
WHEREAS, according to the findings and declarations of the Enterprise Zone
Act, it is in the economic interest of the State to have one strong, combined, and
business -friendly incentive program to help attract business and industry to the State, to
help retain and expand existing business and industry within the State; and to create
increased job opportunities for all Californians; and
WHEREAS, Enterprise Zones create and retain jobs, and according to the
California Association of Enterprise Zones, in 2010, more than 118,000 jobs were
created while California experienced unprecedented levels of unemployment; and
WHEREAS, Enterprise Zones attract businesses to California and retains them,
and once a zone is approved, businesses construct facilities, purchase equipment, hire
workers, and make other investments; and
WHEREAS, Enterprise Zones provide a geographically targeted economic
development tool designed to improve poor and blighted communities.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council formally
supports the positive benefits of the Enterprise Zone program in local communities and
on a statewide economic level.
BE IT FURTHER RESOLVED that the Lodi City Council authorizes the City
Manager or his designee to communicate its support for the Enterprise Zone program
and to submit written comment to the State Department of Housing and Community
Development on its proposed enterprise zone regulations by 5:00 p.m. on February 28,
2013.
Dated: February 20, 2013
I hereby certify that Resolution No. 2013-20 was passed and adopted by the Lodi
City Council in a regular meeting held February 20, 2013, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
COUNCIL MEMBERS — Hansen, Katzakian, Mounce, and
Mayor Nakanishi
COUNCIL MEMBERS — None
COUNCIL MEMBERS — Johnson
COUNCIL MEMBERS — None
2013-20
JOHL
City Clerk