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Enterprise Zone: Like Twilight Zone? : Not in Santa Ana or Long Beach, where key urban-aid concept appears to be working

August 04, 1994

Politicians long have trumpeted the benefits of enterprise zones, where inner cities would be revitalized through tax breaks for businesses rather than through blizzards of dollars from the government. But proponents of the zones too often have failed to match their rhetoric with meaningful studies and statistics.

Now Long Beach and Santa Ana have supplied some encouraging figures. Both also offer lessons to enterprise zones elsewhere, including the need to sell businesses on their availability and advantages.

California began its enterprise zone program seven years ago. It now has expanded to 34 sites scattered across the state from the Mexican border to Eureka. The performance of the designated areas has been uneven, and the entire program often has been criticized as ineffectual.

But Santa Ana officials report that their enterprise zone has allowed the city to help save or create 540 jobs, more than half of them relatively high-paid manufacturing jobs, in its first year. Long Beach put its first-year tally at 350 jobs kept or created.

The zones will not work everywhere and they are not cure-alls. The Santa Ana experience suggests that they must have large amounts of available industrial space--its area includes more than 6,000 acres--and they alone cannot make up for other problems: unsafe neighborhoods, increased city fees, mountains of red tape. Nor can the state zones provide as many benefits as long-overdue federal enterprise zones would.

Former Housing and Urban Development Secretary Jack Kemp was a big booster, but the emergency urban aid bill that emerged from Congress after the 1992 Los Angeles riots, and which included funding for the zones, was such a deficit-increaser that former President George Bush vetoed it. He had a good argument for doing so. Fortunately, the Clinton Administration has money for what it calls empowerment zones, with one promised for Los Angeles. Officials who use the examples of Long Beach and Santa Ana, plus the tax breaks from the federal government, may be able to start putting more jobs back in American cities.

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