Los Angeles Enterprise Zone

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Los Angeles Serious About Reforming Business Climate With Tax Breaks

Friday, June 25th, 2010

Austin Beutner

Austin Beutner, first deputy mayor and CEO of the Los Angeles Office of Economic and Business Policy, published a spirited piece in the Los Angeles Daily News today.  

There has been a lot going on in the Los Angeles area including a sizable enterprise zone expansion, the creation of a new  “business tax holiday,” discounts from the Department of Water and Power for new businesses, and even a fast-track program to help new businesses rapidly set up their power and water services.

This aggressive pursuit of business is at least partially a response to well-deserved bad press about California’s unfriendly business climate.  Here’s what Mr. Beutner had to say about that.

Try this, for adding insult to injury. Not only did Chief Executive Magazine recently rank California as America’s worst state for business, but the publication called us “the Venezuela of North America.”

In other words, the Golden State, with its world-class economy, is no better than a dictatorship that can’t keep its lights on.

Fighting words? You bet. But sometimes a slap across the face can also serve as a wake-up call. After losing more than 111,000 jobs in the Southland this past year and seeing marquee corporate names head elsewhere, we have to develop smarter ways to retain businesses and attract new investment.

Let’s all hope the California state legislature learns to respond in similar ways.

Austin Beutner is first deputy mayor and CEO of the city’s Office of Economic and Business Policy, and general manager of the Department of Water and Power.

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California Governator Says YES to Enterprise Zones NO to Higher Taxes

Friday, June 18th, 2010

California Governor Arnold Schwarzenegger issued a statement today encouraging the use of California’s enterprise zone program to create and sustain jobs in California. This is the latest in a number of not-so-subtle messages sent to the California legislature signaling the Governator’s support of the state’s enterprise zone program.

For many California businesses and communities touched by these zones, this is encouraging news – especially in the face of bills currently under consideration by the state Assembly that would significantly alter the program. The California enterprise zone program provides significant tax breaks to businesses that employ workers within a zone’s boundaries. In fact, the enterprise zone hiring credit offers as much as $12,000 in state income tax credits per EACH qualifying worker during their first year of employment.

Here’s the press release in full:

Governor Schwarzenegger Issues Statement on Employment Report

Governor Arnold Schwarzenegger today issued the following statement after the California Employment Development Department released employment numbers for the month of May:

 “While the decline of our unemployment rate is welcome news, there are still far too many Californians out of work. To achieve a full recovery, there must be accelerated hiring in the private sector, and that’s exactly why we must not burden California employers and consumers with higher taxes. Now is the time for government to be a partner to economic growth, not an obstacle to it. Just this week, Baxter’s BioScience business announced it would continue investing in California because of the efforts of Los Angeles and my Administration to expand the East Los Angeles Enterprise Zone. These are the type of efforts we should focus on, and I encourage the legislature to consider this as they continue budget deliberations.”

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Enterprise Zone Expansion Convinces Global Employer to Stay

Tuesday, June 15th, 2010

Baxter International, Inc. is a global employer in the healthcare industry with more than 49,000 workers world-wide.  According to the company’s website, Baxter operates at 6 locations within the State of California. 

One of those is at 4501 Colorado Boulevard in Los Angeles, within the recently expanded East Los Angeles Enterprise Zone.  It was there that Los Angeles Mayor Antonio Villaraigosa announced today that Baxter International would indeed be staying put!

In a press event at the Baxter International Inc. manufacturing plant on Colorado Avenue, Villaraigosa said that the Illinois-based drug maker had decided to remain and even expand following broadening of the East Los Angeles State Enterprise Zone, which entitles businesses to tax breaks and other incentives. The plant employs 600 people.

“Baxter would like to thank the mayor’s office for providing the necessary information and support to aid in our decision,” said Joy Amundson, corporate vice president and president of Baxter’s BioScience division. “We recognize the importance of nurturing a vibrant business community and appreciate the value in retaining and creating jobs in Los Angeles.”

Read the story by Deborah Crowe, Web Editor & Reporter (health care & biotechnology) in today’s online Los Angeles Business Journal.

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California Enterprise Zone Expansion Announced Around LAX

Monday, May 24th, 2010

Posted by Art Marroquin Staff Writer of the DailyBreeze.com.  Click here to go to the entire article.  A few summary quotes follow below.

Hoping to spur job creation near Los Angeles International Airport, officials on Monday announced the creation of an enterprise zone offering economic incentives to businesses in the area.

….

The program, which targets businesses within 1,078 acres of industrial and commercial land surrounding LAX, had languished for nearly a year as negotiations stalled between city and state departments.

Approval of the zone was expedited last month when Mayor Antonio Villaraigosa discussed the issue with Gov. Arnold Schwarzenegger after they announced that Chinese automobile manufacturer BYD was moving its North America headquarters to Los Angeles.

…

Earlier this month, city officials expanded an enterprise zone in the San Fernando Valley to 5,444 acres.

The LAX and San Fernando Valley enterprise zones, along with the arrival of the BYD manufacturing plant, could create more than 25,000 jobs in Los Angeles, according to Deputy Mayor Austin Beutner.

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CA Enterprise Zone Expansion Approved in San Fernando Valley

Tuesday, May 11th, 2010

According to an article published online today by the Los Angeles Times, an un-named state agency has approved a California Enterprise Zone expansion in the Los Angeles San Fernando Valley area.  Of course, the agency must be the California Department of Housing and Community Development (or HCD), which oversees the state’s enterprise zone program.  According to reporter Phil Willon at Los Angeles City Hall,

The expansion area includes portions of Chatsworth, Canoga Park, the Van Nuys Airport area, Woodland Hills and the northeast Valley. Some of the major businesses and retail centers that will benefit are Micro Solutions Enterprises in Van Nuys, the Woodland Hills Auto Gallery, 3M and Nestle Foods in Canoga Park, the Northridge Plaza, the Westfield Topanga Plaza in Warner Center and firms around the airport.

California’s Enterprise Zone (EZ) program offers significant tax benefits to businesses located within their boundaries. The EZ Hiring Credit provides an income tax credit based on wages paid to qualifying (and properly certified) employees working within the zone.  The amount of tax benefit is nothing to sneeze at.  Try this on for size:  50% of wages paid during first year of employment, capped at 150 % of minimum wage.  In practice, this translates easily to $12,000 in tax credit flowing from a single qualifying full-time employee.

Another similar benefit is the EZ Sales or Use Tax Credit — actually an income tax credit based on the amount of sales or use tax paid in the purchase of qualifying equipment placed into service within the zone.

Other benefits include the (1) EZ Business Expense Deduction, (2) EZ Net Interest Deduction (for lenders), and (3) EZ Net Operating Loss Carryover provision.

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