Gov. Schwarzenegger Announces NEW Shasta Metro Enterprise Zone Designation for Redding, Anderson, Shasta Lake and portions of Shasta County along I-5 corridor
SHASTA COUNTY, Calif. (Nov. 16, 2006) — Continuing his efforts to create jobs and a positive business environment, Gov. Schwarzenegger announced today the conditional designation of the Shasta Metro Enterprise Zone in the North State, part of 23 Enterprise Zones he named statewide.
“Since I became Governor, I have worked tirelessly to improve the business climate and create more than 650,000 new jobs,” said Gov. Schwarzenegger. “By using incentives like hiring credits or sales tax credits, these Enterprise Zones can harness the entrepreneurial spirit of our state and help draw business investment to economically depressed areas. Enterprise Zones lead to more jobs, less poverty and long-term economic stability.”
The new designations will take the place of the 23 zones set out in statute which are expiring over the next several months. Each zone designation is in effect for 15 years.
“A majority of the companies we are working with in today’s competitive environment recognize the value of Enterprise Zones and in more cases Enterprise Zones are being requested as part of the site search criteria,” said Jim Zauher, president of the Economic Development Corporation of Shasta County. “Having a new Enterprise Zone designation available to us for the next 15 years will clearly assist local companies in their expansion efforts and add a competitive advantage in the recruitment of new companies.”
The California Enterprise Zone Program targets economically distressed areas using special state and local incentives to promote business investment and job creation. By encouraging entrepreneurship and employer growth, the program strives to create and sustain economic expansion in California communities.
“Tax incentives and assistance from the Economic Development Corporation of Shasta County made opening a new Captive-Aire plant a great decision,” said Captive-Aire founder and president Robert Luddy. “We are pleased to be in Redding, where Captive-Aire can grow our western operation and create new jobs for American workers.”
Businesses within Enterprise Zones are eligible for substantial tax credits and benefits including:
- Firms can earn $31,234 or more in state tax credits for each qualified employee hired.
- Corporations can earn sales tax credits on purchases of $20 million per year of qualified machinery and machinery parts.
- Up-front expensing of certain depreciable property.
- Lenders to Zone businesses may receive a net interest deduction.
- Unused tax credits can be applied to future tax years, stretching out the benefit of the initial investment.
- Enterprise Zone companies can earn preference points on state contracts.
- Up to 100% Net Operating Loss (NOL) carry-forward. NOL may be carried forward 15 years.
“This designation will continue to play a significant role in the attraction of new business to the greater Redding area, as well as businesses already located here,” said Dave Scott, founding partner of D.H. Scott & Company. “As a CPA, I can assure you that the tax incentives offered by this program represent a major savings to participating companies in our area.”
In August, Gov. Schwarzenegger released a report commissioned by HCD that evaluated the success of Enterprise Zones in spurring economic recovery. The report shows that from 1990 to 2000 Enterprise Zones on average experienced:
- Poverty Rates: declined 7.35 percent more than the rest of the State
- Unemployment Rates: declined 1.2 percent more than the rest of the State
- Household Incomes: increased 7.1 percent more than the rest of the State
- Wage and Salary Income: increased 3.5 percent more than the rest of the State
The next step in the designation process will be the Department of Housing and Community Development’s (HCD) issuance of a conditional designation letter to each of the new zones. The letters will outline conditions which must be met to be granted final designation. Examples of conditions include preparation of an Environmental Impact Report and a signed memorandum of understanding with the Department which includes performance measures and benchmarks.
A nonprofit corporation, the Economic Development Corporation of Shasta County provides information and facilitation for companies looking to expand or relocate in Redding, Anderson, Shasta Lake or anywhere in Shasta County. For more information on the Economic Development Corporation of Shasta County, visit its website at www.shastaedc.org, or contact Jim Zauher at 1-800-207-4278.