|
|
|
Feeling the Power
What does ‘empowerment zone' designation mean for
New Haven business?
|
Business New Haven
2/8/1999
By: Mitchell Young
|
It's EZ. But it won't be easy.
Last summer's community-wide effort that earned the city recognition as an All-America City appears to have helped to win more than just bragging rights for the Elm City.
On January 13, another effort of community, business and civic leaders has won the city of New Haven designation as one of 15 new urban “empowerment zones” by the U.S. Department of Housing & Urban Development.
With EZ designation comes the potential for the city to receive up to $100 million in direct federal grants over the next ten years, as well as the right to provide $130 million of tax-exempt financing authority above existing state caps. It offers tax credits to businesses within designated development areas and provides priority status for other federal grant programs.
EZ players from the chamber of commerce, City Hall and neighborhood development are feeling empowered. They have won big by landing what will likely be a $230 million-plus sale with plenty of bennies. The customer is the federal government, but down on the street and in the cash register that's still a pretty big bell to ring.
What is an “empowerment zone”? In New Haven's case it's ten census tracts within the Hill, Dixwell, Fair Haven, Dwight, West Rock and Newhallville neighborhoods. It's also designated develop-able areas including most of downtown, some commercial industrial tracts and about 100 acres in West Haven. Within the zone, business and government get some new tools:
Bonding Authority - Up to $130 million over ten years above state caps. According to development officials there are no committed projects as part of the plan.
Machinery & Equipment Deductions - Zone businesses (and businesses in develop-able areas) can expense up to $37,500 instead of the typical smaller business deduction.
Brownfields Cleanup - A business in the zone can deduct qualified environmental cleanup costs for the tax year in which the cost is paid or incurred, instead of using standard depreciation.
Employment Tax Credits - Zone businesses can claim up to a $2,400 tax credit for hiring 18- to 24-year-old zone residents and other “hard-to-employ” residents.
School Funding - Government can issue bonds to raise funds for curriculum development or physical improvements for schools that have financial commitments from business partners.
There is also $10 million a year for ten years for use in a cornucopia of economic and social initiatives.
The “Empowerment Zone Strategic Plan” grew from an effort that began in 1995 when the city was named one of 60 “Enterprise Communities” nationwide. That provided access to $3 million in grants to be utilized according to a ten-year plan.
These EC funds have been managed by a “community”-based council and have been used to support what are called neighborhood-based economic development initiatives.
These include the Greater Dwight Development Corp.'s successful effort to bring a Shaw's supermarket to Whalley Avenue; a training and hiring program for city residents for the Omni hotel; the neighborhood program co-sponsored by the Community Foundation of Greater New Haven that provided 123 community gardens and green spaces in the city; the Regional Business Resource Center on Ella Grasso Boulevard; and the Regional Growth Connection, which provides transportation for city residents to suburban-based jobs.
The EZ plan which earned the designation for the city is built on more than 50 initiatives from four principal categories: “economic development and jobs,” “empowering families and individuals,” “education and youth” and “strengthening neighborhoods.”
The economic development plans include career development, job training, youth employment, neighborhood commercial revitalization, new construction at Science Park, entrepreneurial training and expanded access to capital, among others.
Other programs envision expanded day-care, drug treatment, early child development and adult education and youth-services organizations.
From biotech to business training to baby-sitting, some consider that every economic and social development idea of the past ten years is about to be funded for the next ten. The impetus for many of these initiatives is a core belief among proponents and HUD in the cross-fertilization of public money, business needs and institutional support with underutilized human and capital resources from economically distressed neighborhoods.
There has been some criticism that much of the $700 million outlined in the EZ proposal does not represent new commitments or investments, as it includes spending to develop the Long Wharf mall and buildings at Science Park, among other previously announced efforts. Proponents argue, however, that the EZ designation will both assure success of those initiatives and help keep the city and developers honest in delivering jobs for New Haven residents.
The current Enterprise Community is governed by a 30-member citywide council of which 20 are elected as representatives from each “Neighborhood Implementation Committee,” eight are appointed by the city and two are aldermen appointed by the president of that board.
Under the Empowerment Zone designation, the EC structure was to continue to guide the implementation and fiscal oversight process. Use of bonding programs, for example, would have to be approved by the community council.
Says Daniel Newell, co-chair of the empowerment planning process and co-chair of the Enterprise Community for the last two years: “The Enterprise Community has been in business the last three years. We feel we do need to tighten up, especially by doing a better job at creating a baseline assessment to compare results to. We've been recognized by HUD particularly for our governance structure as one of the best in the country.
“We won the empowerment zone designation not just because our application was good, but our track record was good,” adds Newell. “We've proven that, as a bottoms-up organization, our implementation was successful. This didn't have anything to do with city government or politics.”
Newell says he wants to keep the focus on success and not controversy. “One of the things we've learned is that the folks from the community did have a lot of ideas, a lot of insight. We also learned that for community development to really work, it wasn't enough to have the neighborhoods at the table but also the business community and the institutions. We just couldn't do it on our own.”
It's not cooperation that has some worried, including insiders at City Hall.
The New Haven Register initially responded to the EZ announcement with a headline, “HUD Gives New Haven Second Chance.” Indeed, New Haven's long history of controversial accounting practices with federal funds was most recently punctuated by problems at the city's housing authority as well as with the Livable Cities Initiative, which might have upended DeStefano's political career. With $10 million annually for a plethora of community-based programs, the city administration is reevaluating the governance structure.
According to city spokesman Michael Kuczkowski: “The mayor will announce an Empowerment Zone implementation team and is currently looking at a number of different governance structures that are used in other EZs to come up with the most effective structure possible. We will have a structure that includes substantial community input, but we must be sensitive to the fact that the city itself is the grant recipient and has to be accountable for how the grant money is ultimately used. The governance structure we ultimately choose will have to balance those two issues.”
Roger Joyce, chairman of the Greater New Haven Chamber of Commerce and a co-chair of the EZ planning team, adds that, “I think the relationships that were built here will work through any of these issues. My biggest concern is that the business community hasn't been well represented through the EC process, and needs to be better represented. Business involvement is crucial to the plan's success.”
Considering the state of affairs in Washington, this scramble for turf ultimately may not amount to much. Currently only $3 million of the plan's $10 million has actually been approved by Congress. And that money should start flowing within several weeks.
Joyce, however, believes that the political support is there and fully expects the rest of the commitment.
“There is a very high expectation that the whole ten [million] will be approved,” he says. “We're proceeding in terms of planning based on the $10 million. If it doesn't happen, we'll have to shift gears.”
|
Go FirstGo PreviousGo
NextGo LastGo
to Index
|
|
