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Friday, Mar 29, 2024

BREAKING NEWS: Valley Enterprise Zone Eliminated

The Northeast Valley Enterprise Zone was eliminated Friday after a state panel did not renew its designation. Business leaders and city officials had expected the zone to be renewed by the Division of Financial Assistance, part of the state department of Housing and Community Development. However, when the division’s list of 23 enterprise zones across the state was made public Friday, the Northeast Valley zone the only in the San Fernando Valley was missing. “The one they eliminated was one of the most successful in the state,” said Roberto Barragan, president of the Valley Economic Development Corp., in an interview after the surprise decision. In a prepared statement, Los Angeles City Councilman Tony Cardenas said he was disappointed. “Anyone who visits these areas can see that there is clearly a continuing need in preserving the enterprise zone,” he said. “We need to bring new jobs to the area and taking away financial incentives for business will stunt economic growth.” The process to receive enterprise zone designation is highly competitive, with more applications received than there are designations to give out, said Richard Friedman, a spokesman for the Housing and Community Development department. The Northeast Valley Enterprise Zone simply did not make the cut, he said. “They did not have as competitive an application as the other areas,” Friedman said. Barragan said he had heard the Valley enterprise zone had been rejected because it failed to meet the requirements of having 51 percent industrial and commercially zoned land. The zone was created in 1986 and renewed in 2001. The boundaries include much of Pacoima and portions of Sun Valley and Panorama City. Businesses within the boundaries are eligible for local tax incentives, the most popular being an employee tax credit of $31,000 per employee over a five-year period. Other include a rebate on sales tax for certain equipment and parts purchases; a business expense deduction capped at $20,000; and a five-year subsidy from the L.A. Department of Water and Power. Businesses that continue to employ workers hired before the enterprise zone designation expired can still apply for the employee tax credits, Friedman said. The two other enterprise zones in Los Angeles near downtown and in Hollywood have the option of expanding and including the Valley area into their boundaries, Friedman said. It is permissible for the zones to include areas that are non-contiguous so that businesses can continue to receive the tax incentives, Friedman said.

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