The City Council has unanimously approved an application for one of six nationwide federal "empowerment zones" that will be designated later this year.
With its combination of $100 million for social programs and tax incentives for businesses in poor areas, the zone, if approved by the federal government, will be the most significant economic development program in Los Angeles in more than 20 years.
The U.S. Department of Housing and Urban Development will designate the zones in September. Competition for the program is fierce, with more than 400 cities expected to apply.
City bureaucrats have been scrambling to meet a Thursday deadline after being informed by HUD officials earlier this month that Los Angeles' application was lacking in detail and not competitive. City officials said they were told they had to outline specific programs that would be funded with the $100-million grant.
"It's going to be a lot of work, but it will get done on time," said Marilyn Lurie, director of industrial and commercial development for the city's Community Development Department.
The council approved the city's application Wednesday. The empowerment zones are the showpiece of the Clinton Administration's urban agenda.
Under Los Angeles' application, the Eastside and South-Central would receive the lion's share of the federal funds. The application calls for dividing the 20-square-mile zone into three pieces, each of which meets federal guidelines requiring that at least half of the census tracts have poverty rates of 35% or more.
One empowerment zone would start in the industrial area of Boyle Heights, cross the Los Angeles River and encompass a section of South-Central along the Central Avenue corridor. The second area would take in the Broadway-Manchester corridor in South-Central, stretch south and include Watts and unincorporated county areas in Willowbrook. The third portion would include about two square miles in Pacoima.
Los Angeles also is applying for four of the 65 HUD-designated "empowerment communities" that will receive $3 million each in federal funds. Those areas would include portions of Pico-Union, Westlake, Koreatown, South-Central and the Eastside. The Southeast cities of Cudahy, Vernon, Huntington Park, Maywood, Bell and Bell Gardens also applied for the program.
During Los Angeles City Council hearings, community leaders had expressed concern that they would not be allowed sufficient decision-making input on how the money will be spent if Los Angeles' application is approved, as expected. Last week, however, they were generally optimistic that their concerns would be addressed.
"As long as we ensure that community residents are actively involved and push to make sure (officials) are held accountable, we should be fine," said Jonathon Newsom, president of Drew Economic Development Corp. in South-Central.
Under federal guidelines, the city would be allowed to spend the $100 million for programs ranging from child care to job training. Also, businesses in the zone would be eligible to receive various tax incentives. They would include payroll tax breaks of as much as 20% on the wages of workers who live in the zone and accelerated depreciation of equipment, enabling owners to write off machinery as a loss as soon as it is purchased instead of the normal five- to seven-year period.