The Los Angeles City Council gave final approval Wednesday to an application asking the state to make Pacoima an enterprise zone, but rebuffed a last-minute plea that it commit tax dollars to the area to increase its chances of winning the designation.
Council members, on a 5-5 vote, rejected a proposal by Councilman Howard Finn, who represents Pacoima, to set aside for each area designated as an enterprise zone 5% of the city's nearly $100 million in federal economic development funds.
The council, however, unanimously gave final approval to the city's application to the state to award enterprise zone status to Pacoima, the USC area and Watts.
Under the enterprise-zone program, state and city governments grant tax breaks and other incentives to get businesses to locate within the zones, which are supposed to be economically depressed areas to qualify.
2 Bills, 13 Zones
The state is planning to designate 13 enterprise zones under two bills. Under one of the bills, Pacoima and the USC area are among 20 finalists vying for 10 of the designations. Pacoima was ranked 16th in a preliminary list prepared by the state Department of Commerce.
Under the other bill, Watts is one of four finalists competing for three designations.
Finn argued that, in deciding which areas get the designation, the Department of Commerce will be influenced by the steps that cities take to attract new businesses. The department is expected to announce its selections in mid-February.
"Each final application will require a local incentives package, which will weigh heavily in determining final enterprise zone designation," he said.
Opponents of the proposal said it could deny their districts a fair share of the federal funds, which go for programs such as providing low-interest loans to businesses or subsidizing training of unskilled workers. The funds are allocated to projects by the council without any requirement that various areas get a minimum amount.
Councilman Marvin Braude was among the most vocal critics of Finn's proposal, saying that it would obligate funds to geographical areas regardless of the merits of specific projects.
"I'm willing to vote on the merits of a project, but not on a blank check," Braude said.
Some council members said they voted for the city's application as a courtesy to council members from the three areas competing for enterprise zone status, despite having questions about the benefits of the program. They said they doubt whether small tax breaks actually will prompt a business to move to one of the enterprise zones.
"The state has put no substance in this program," said Councilman Dave Cunningham, who previously has called the program a "pet rock."
But Finn said he welcomes any plan that might create jobs in Pacoima. He said the state designation also would give Pacoima a leg up on other communities if Congress creates a system of federal enterprise zones.
Mel Wilson, president of the Pacoima Chamber of Commerce and head of a citizen advisory committee on the Pacoima enterprise zone, said he was disappointed by the council's rejection of Finn's proposal. Wilson said the city has not made a commitment to improving Pacoima.
"I think we only have about a 55% chance of receiving the designation," Wilson said.
He said the final application will be "not much better" than the preliminary application that placed Pacoima 16th on the list of 20.