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Enterprise zone on rocky ground

May 13, 2002|By DARREN SIMON

Staff Writer

BRAWLEY — This city's hopes of obtaining a state enterprise zone designation to provide tax incentives to new businesses may be dashed by a troubled state budget.

City officials had been pursuing legislation — Assembly Bill 499 — that would have created an enterprise zone designation in place of the city's current state manufacturing enhancement area designation.

However, A.B. 499, approved by the Assembly, is in limbo in the Senate Housing Committee and all indications are it will stay there.


Bill Dohring, a lobbyist for the city, said he and City Manager Jerry Santillan spoke before the committee earlier this month.

He said while the chairman of the committee is sympathetic to the importance of the legislation, the state's financial concerns may be the overriding issue.

With the state facing a projected $22 billion deficit, there is hesitation on the part of the Legislature to approve any legislation that would provide tax breaks, Dohring said.

However, he said he has not given up the fight to win the designation for the city.

"If we go down, we're going down swinging," Dohring said this morning, adding, "We haven't given up."

He said A.B. 499 probably will not be freed from the Senate Housing Committee. However, Dohring said it is possible to place the enterprise zone legislation in another bill in a move known as "hijacking."

Dohring said he is working with the Latino Caucus to try to gather some political power and support for the city's legislation.

This is not the city's first attempt at obtaining the state enterprise zone designation. In the late 1990s the city made the attempt and did not succeed.

But city officials, with the help of Assemblyman Dave Kelley — at that time a state senator — and the lobbying efforts of local leaders managed to push forward a new type of designation.

In 1998 legislation was approved creating the manufacturing enhancement area. It was approved with wording that made it specific to the Imperial Valley and Brawley and Calexico were the only two cities to receive that designation.

While the MEA was key to the city attracting the new beef-processing plant to Brawley, it is limited in that it only provides tax breaks to manufacturing industries.

The enterprise designation is more far reaching in that it would allow the city to provide tax incentives to any new business locating in the area.

Santillan said this morning if the city does not succeed this year, he does not think the business growth the city is experiencing will slow.

He said Brawley does have federal enterprise and champion zone designations that provide some tax incentives. The federal enterprise designation ends in about a year, but the champion designation will remain in place for five more years.

In addition, the city is pursuing a federal foreign trade zone designation that would make businesses exempt from import/export fees. He said such a designation would help by attracting businesses, thus creating jobs sales tax and property tax for the city.

Nevertheless, city officials would like to obtain the state enterprise zone designation, particularly as businesses that are ancillary to the beef plant look to the city. Such businesses would not qualify for tax breaks under the MEA.

Dohring said state officials are looking at the tax break without seeing the larger picture — that providing the tax breaks would create more commerce and more jobs. In doing so, he said, the state's economy would directly benefit.

>> Staff Writer Darren Simon can be reached at 337-4082.

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