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Redevelopment Agency · City of San Bernardino
300 Nanh "D" SuMr. Founh Floor . San B-.lino, Califamia 92418
(714) 384-5081 FAX (714) 888-9413
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SEPTEMBER 5, 1990
STATE ENTERPRISE ZONE
SynopsIs of PrevIous CommIssIon/CouncIl/CommIttee ActIon:
5/14/90 CouncIl authorIzed the ExecutIve DIrector of the Redevelopment
Agency to enter Into agreement wIth Val Mahablr & AssocIates to
prepare PrelImInary ApplIcatIon for desIgnatIon as a State
desIgnated EnterprIse Zone. .
Recommended MotIon:
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(MAYOR AND COMMON COUNCIL)
Move to adopt A RESOLUTION OF THE CITY OF SAN BERNARDINO DESIGNATING THE
AREA CONTAINED IN THE ENTERPRISE ZONE BOUNDARIES TO BE A DEPRESSED AREA
AND IN NEED OF DESIGNATION AS AN ENTERPRISE ZONE IN ORDER TO ATTRACT
PRIVATE BUSINESS FOR FUTURE DEVELOPMENT, GRANTING CERTAIN INCENTIVES IN
THE ENTERPRISE ZONE, AND AUTHORIZING APPLICATION FOR DESIGNATION TO BE
FILED
Respectfully SubmItted,
ROb~~~xecutlve DIrector
SupportIng data attached: YES
FUNDING REQUIREMENTS:
NONE
Hard:
Project:
Comml sslon
Notes:
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Agenda of: September 5. 1990
Item No. ~
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S T A F F R E P 0 R T
On May 21, 1990, the Redevelopment. Agency entered Into an agreement with Val
Mahablr and Associates for completion of a Preliminary Application for State
designation as an Enterprise Zone. The designation of Enterprise Zone will
allow for the development of commercial and Industrial sectors of the Zone
(Exhibit "2") and for use of State Incentives (Exhibit "3") together with City
incentives (Exhibit "1") for that purpose.
Application Is due to the State Department of Commercial no later than
September 10, 1990.
EXHIBIT "I"
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nI:. ~ >>lD ItJCaL :na:trl'1VBS
For the past five (5) years, the city of San l!emlImino has qlerated
a city ~ignated Ente1:prise Zone. '!he ~......l.aIe of that ~'-":ILaw
has been the delivexy of city fiilandecl incentives to local
bJsj-- 118. Attac:tJment NuIdJer is a l:~L that SllIIIIlarizes the
results of the ~'-":ILCIIll to date. It 1IUSt be noted that these
incentives fozmed the basis of the city.s applicaticn far designatim
l!IS an Ente1:prise Zone umer the ~te.s ~~aw in the year 1985.
'IhaIgh the city failed 'to meet the qualifyinJ score far state
designatiQll, the city's local ~'-":ILoiiw Wl!IS fozmed am cparated with
sane ............"ft. We believe that .a('(' -'I ~ state incentives
available urEr the state designated Ente1:prise Zane ~'-":ILaw, with
local incent:.ives will have a siC1lrlficant iIIplCt on the city's
depressed areas that qualify far Zane designation am the city l!IS a
Wole.
umer its 0Jrrent Ente1:prise Zane ~. ')," _1, the city will iIx:1ude
1IIlCh of the same incent:.ives as offered urEr the 1985 ~~) am,
in addition, iIx:1ude ather incentives thooght to be beneficial to the
progLaw.
A. '1'IIX IDL.r-._ftt "lUIlV'!'1tv'1' 1R8c!8val.--.-l'Lt Proieat 1lPllYla)
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'lO estimate the ilIport:anoe of this type of incentive to pt'-":ILaw
.~. l Tf, it JIIlBtbe ccnl1deJ:9d that virtually all of the pl.' '),..JEJe3
Ente1:prise Zane area is iIx:1uded within a Rsdeve1~,L Project
Area. J\ddi.tiala11y, areas of the ~~ Zane that are not
directly within a Rsdevel.............l Project Ama are within close
enough proximity am affected by si",il"r factors to allOii far
DUtual benefit arguments. As such, projects CA1te1de of the
Rsdevel~.L Project Area may have _~ft to Redevelo !.-.-.,t
f1nanc!n;J usinq mtuall:lenefit arguments. In all, seven (7)
Rsdevel~.L Project Areas ar ~.~ project areas direct1y
inpact the Ente1:prise Zane.
'!he primaty am most ilIportant fI.lnlliJ;J mechanism available to the
Rsdevelopoent 1q1rcf of the city is tax ir...............L f1nancinq. Upon
initiat.ia1 of a new redevel~,t project area, the total
eligible llIIICUI1t of p:L~ ty tax collected in the previcus year is
established as a base amcunt:. FJ:an inplEllll!ntation of the project
am thrcugha1t its deve1~IL, the llIIICUI1t of annual ~~ty tax
reveroes received in ,",""",e of the base llIIICUI1t is the tax incre
ment. 'Ihese reveroes will aocIUe to the Rsdevel~IL 1q1rcf far
further project f1nanc!n;J. '!he ~ of this method of
financin:) is the sale of tax ~L tx::nZ to fund r--e'ITY
activities to ll!ll\!lXl!Io,r= private deve1~.L, with the anticipated
tax ir.............tt, resultinq fran such deve1~d.., beinq pledged
toward repayment of the l:lcltm. As such, this method of f1nancin]
depems upon new private deve1~tt. occurrin;J in the project
area. It is effective am rxmnally cmly feasible in ccnjuncti.on
with relatively large deve1~ats ar a cluster of small deve1cp
menta projects.
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'!be method of usinq tax i.rlo1:.........L f1nanc!n;J is l!IS follows:
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1) '!be ReClevel...........,L 1qi!rc:f can provide tax 1nc:l:1ctuEoi,L financial.
assistan::le to deve1..'i....."t projects with legally bintin;J dis
p:lSitien and deve1...........L 6gl:--=o.ls or owner part:icipatien
~..........ls, in an lIIIIaInt up to the total lIIIIaInt of tax incre
ment to be received by the 1qi!rc:f aver a five (5) year
period, as a nlSUlt of small deve1~1t. or devel~d:s.
2) '!be lIIIIaInt offinancia1 assistan::le is limited to the miniD1nn
lIIIIaInt 7'"""'OI:!ll'!lXY to CXIIIer a veritable shortfall in the
f~ pro foma of an otherwise 1lCUI'Id, IImiletable,
fi:nan:ially feasible devel_d. lo'L' v -.aI. DIe to the very
natw:e of tax m.....a.....lt f~, it is diffia.11t to predict
an anmal or total dollar lIIIIaInt for this type of funilix.J
incentive.
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aJsinesses that anticipate expansion and new hJsiness within the
cxmlIerC.ial. area will receive the followin} rebates t.ran the City .
durin;J the first three (3) years of qlerllticn:
1) 0ne-hl.Irm'ed percent (100%) rebate of the utility services
users' tax.
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2) 0ne-hl.Irm'ed pe1:0$&1L (100%) rebate of the aminess License
tax.
3) 'l\ient:y-five pao...d. (25%) rebate of the water c:haJ:ges (for
new blsir--as cnIy).
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A new blsiness is defined as arr:I bJsiness .uc:n is "start-up" in
nature or has relcx:ated to the (.....-.cla1 area t.ran c:utside the
OOl.~..te City limits of San Be.mardino. An existin:J bJsiness
within the~, .uc:n has been p.u:dlased, is net CCI'IS!dered a
new blsiness. An explI1'Idin] bJsiness is defined as an existin;r
bJsiness which has made a ~ IIDII8 within the .. ...._. cia1
area the next nlSUlt of.uc:n results in additicnal space for
blsiness pnposes, or has JilYsicaUy E!XpIUljed its existin:J
facilities within the area. '!be expansion III1St have resulted in
at least a fifty pen.-..L (50%) incrMse in pezmanmJt full time
enployees or two (2) EIIpl.oyees whichever is greater.
'!be lIIIIaInt of rebate en the utility tax for an explI1'Idin] blsiness
will be based upon the lIIIlamt of said tax paid by the hJsiness
aver and aI:x:Ne the lIIIIaIntpaid, for the twelve (12) IIICIIlths prior
to the expansion.
Permanent enployees referred to III1St be residents of the City of
San Be.mardino and be on the job a miniD1nn of nine (9) 1IICIIlths.
'!be City will offerjprovide the followin} rebate incentives
durin;J the first year of qlerlltien of industrial blsir--as
lcx::atin;J within the industrial area.
1) 'lWenty-five percent (25%) rebate of the utility servioe
users' tax.
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2) 'l\ienty'-five pe1:oeut (25%) of the 8.lsiness License Tax.
With regard to item lib" aI:x:Jve, no addit:iala1 furxti.rJ;J far
adinistrative ani ~_.....J. functials will be mquired far this
incentive. '!be City JlAminiatrators will be the fucticnu:y
pe:rsameJ. in bplE!lllllf1ti.rg this incentive altha.1gh the initial
point of cxntact will be the 8Jsiness S1~ L Faci1ities.
Finances, with regard to a deficit, caused by these rebates to
the City's General. PUnd, has not been detemined yet.
For the 0......... cia! area, the rebate ~~aw will be available
duri.n;r the first four (4) years of the life of the Ent:etprise
Zale. At that point, the effecti,~- - of the pt09'-aw will be
<lll'S--ed ani extended am;ar expanded deperKiirg upcn the results
of the JI~"'?S~.
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D.Irin1 the first three (3) years of Ent:etprise Zale designatiem,
aU new ar exp!IIldin;J (mfer to It.Em "e" aI:x:Jve far definitiat) ,
within the Ent:eJ:prise.Zcrle area will be .........,L !:ran all
aqineerin;J fees, p.1.anr\in;J fees, 1IIIilCbanic:al fees ani bnildin;J
permit fees. stom dmin ani sewer fees are not covered by this
exenpticn.
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IJIplementatiat of the actiem will not create an added cost to the
City ........'lSEl it does not require new staffin;J ar measureable time
of exi.stin;J staff: however, the actiem willl.'"'J:AL SH,t; a cost to
the City in 1:e1:ms of lost revenue to the General. PUnd. '!be costs
have not yet been detemine either em an annual basis ar far the
three (3) year t.emre of the actiat.
'!be City Admi.nistrator's office will be respcl'lSible far coar-
dinatin;J the actiem ani assurin;J its In-......L bplementatiem by
llRllicable City Depntments.
D. Bea.ut:lfication pi;:\A,I.L......
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'lbe az:ea of :lnpJ.ementaticn of this incentive will be the eliq.ible
az:ea ani c:xmoercia1 az:ea. '!be iDplE!lllllf1ti.rg entity will be the
Redevel~,t; 1qircy of the City of San Bernardino.
'!be ci:ljective of this In-''''.:lLaw is to provide a f:inancia1 incentive
to hlsiness owners ar lcn;r t:em tenants who own (. ...._1 cia!
prqlerti.es, to finance exterior beautificatiat as facade
iltprovements. Int:eresbld hlsiness owners will file an
llRllication with the 1qircy, includiIq a desc:ripticn of the
J:IL' 'l<JSed beautificatiem activities ani cost estimates.
If ~, the 1qircy will grant matd1i1r:J fI.1rDs em a dollar
for-dollar basis up to $5,000.00. '!be grant canes via a rebate,
upon pt~ subnittal of receipts by the owner, ani an inspection
of the work by City staff. '!be pt~aw, ll\I>Iilab1e in other
specific locations in the City, is staffed by ate (1) person with
an annual b.ldqet of $50,000.00.
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'lhe City is cxmnitted to fundinr1 twenty-five pe1XlEIia. (25%) of the
funds for beautificat.ic:ll activities within the Za1e. An
evaluat!Cin will be can:!ucted periodi",,' 'y to .----- need and/or
deIIIaJxl for dlaD;te in f\m:lin;J levels. 'lhe BIIDJI1t cxmnitted for
the ~~aw totals $187,500.00.
'lhe beautificat.icn of the exist1nJ bJsJ.ness. mid1 may need
internal as well as facade hprQvements, will i"l"""" the ~
t.ent:ia1 for at.t:ractjn;r new luIir- as to the Za1e am l:eilA>..'ed
ClCXISUIIIer interest.
E. Allot,] .,...---- T^,",_
'!his i'L"":I4aw is administered am operated cut of the City's o:.m-
1IIInity Devel.'+"""ltt Department.
'lhe lhmnruty Devel'+"""ltt Department revolvirq loan turn receives
cn;pin} fundinr1 fran the City, primarily fran a fee dla%ged by
the City on all In:Justria1 Devel.~,l Ilcni T........... '!his SQ.D:tle .
has enabled the lhmnruty Devel~ttDepartment am its pre-
.......'>Dr, the &:x:.......i.c Devel'+"""l.l CCluncil to mke smalll::usiness
loans totallin} in -'-'8 of loans IIElde under the l'hIwftn1ity
Devel'+"""la. Department totals $500,000.00 within a two (2) year
period.
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Legitimate new am ~ small I::usi- '1'as within the En-
taprise Zone that my otherwise wail.d find it difficult to
qualify for can vent.icna1 fi.rlanciJx.J, m:e erx:oD:'aged to awly for
n-mmn1ity Devel......Ilo."L Department diJ::ect loans (~"":I4aw will fom
a m!n 0."1 alent within the 8.lsiness SUWAL Facilities) sud1 as
plant acquisition or expansion, equipnent and liimid.n;J capitalare
financed t:hra.1gh this l&"":I4aw.
'lhe smalll::usiness lam ~"":I4aw has existed within the City's
n-.nm.11'\ity Devel~a. Department for a period of two (2) years.
'lhe l&"":I4dw is provided guidance by a lam mview cxmnittee known
as the EOQllcmc Devel'+"""l.t P.LO,ILaw o:mnittee (EDPC). '!his
CkIIImittee is CICIIpt'ised ofaxea bankers am other professionals.
It is envisioned. that this lam agllications filed within the
Zone will be afforded the highest priority for use of funds.
A maxinum of $50,000 is provided under this i'L"":I4aw is provi.c1in1
gap financirr;J to local I::us~-'is. Gap financin} arran;)eIIleI1t
m:e IIElde ClClIlt.iJ'qent upon Small 8.lsiness Jldministrat.ic:ll (SBA) and
other conventional lam BClIJrCElS.
with the pl...~ meJ:9l= of the lhrmn1ity Devel'+"""ltL Department
am the Redevel'+"""l.L lIget:cy, the admi.nistration am cperat.ic:ll of
a lam pl.""",..aw shcW.d t.-:- .... IDCl1:e efficient and effective. 'lhe
pro p:lSed organizational structure is designed to in::1u3e a 8.lsi
ness Devel'+"""la. section with the lam pl.~..aw beinI a key
CXIIpOI1etlt of same (see C11art Nuni:ler ->.
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F. n-n'ition
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'Ihi.s i-ltU:l'o- will be funded by am mcnies. '!be ebjective will
be to tearc1awn and,IdI:' e1.iminate structures that L--. Ii uL a
blightin:J influelXleon neazby pl'"'!"=Lties am ld1icb camat be
1IIllniatorUy dealt with lmier local City ordinances.
OWners are requested to rem::Ml dilapidated structures tIu'aJgh the
Agency's DeIIlolition pl.:lg1._. 'ItIere are no addit.ia1a1 costs to
the owner. A staff person is relegated to hanUe 1-"-'"'!"=Lty
ic'Ient:if1cation, owner ccntact, l!IRll1caticn~,. ufthl1, ......ILLaCt
bid.UnI, award am supervision. '!his pl.U:I'o- is b.dgeted at
$50,000.00 per year. '!be ptOjL_ is to be 8llIIlClUted tlu:aIghcut
the periQd of c:paraticn of the Entmprise ZcrIe. '!his will be
reviewed periooi,...,l1y to evaluate deman1 am needs far increase
ar decI:ease of:furxUng. '!be min1Dum financiaJ. cx:muitment
awroximtes $250,000.00.
'!be deaD1ition plU:l'o- will serve as an im....L..u...IL incentive to
potential new am expan:lin;J bJsinesses, by ClCIII8ti.n;J a pre-
deve1"'P""'.t activity am costs. '!be negative percept:.icn of the
area will be eradi.c::ated tIu'aJgh the n!IIIOVal of a luge 7Dnrn.n- of
unsightly structures.
G. Past Track __i_
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'!be irnividual respa1Sible far ~ am c:xxmi1rla1:m;J the
activities of the aJsiness SlWv.L hciJ.ities (referred to lmier
the marketin:] I!leC:ticn of the lA~:Hl) will play a key role in
the fast t:rackiD;J of infOnlBticn am nnc.-a far deve1"'P""'.L
pnposss. '!be ulti1llate ebjective of this incentive is to prcwide
deve1c:pers with decisiall!l (~di.....RtLuVal.) J:eglIrdiJ1]
deve1"'P""'/t activities in the ehartest: possible' t:imeframe.
'!be orderly flow of infomation am ........-a bsbrJ8s\ deve1c:pers
am the City's decisiaHDakers will be streamlined am JII!Ide
"t.ime-efficient" by pmviclizq ens point of ccntact far.
deve1c:pers. '!his ccntact point will be the amr- SUwu&.L
Facilities' manager/coordinator. '!his irnividuaJ., wcrldng in
conjunction with the 8.1I!Iinees Devel"'P""'/t Sp-iIol1st (see
attadm1ent:s m.miJered _ and _ organizaticnal stmcture) within
the Rsdevel..'l......."'t Jqerr:y will ElI1I!Ilil:e that all ........~ are
prO(" red am infcn:maticn dispenSed in the ehartest: time period.
'!be 8.1I!Iinees Devel"'P""'IL SpeciaJ.:1st will wotX with the City's
Devel"'P""'/t Review O:mnitt:ee in the fast t.racIciJq of infcn:mation
am ~'"""'1ts.
'!be Devel"'P""'1t Review O:mnitt:ee (IEC) was fcmoed in the year
1985 as an element of its tben Enterprise ZcrIe ~. 'lP'""l . '!be
O:mnitt:ee has been func::t.i.cIniJ lmier the City's self-designat.ed
Zone since that time. '!be O:mni-t:t;ee is CXIIpri.sed of perscnnel
fran the variaJs City departments involved in plan c:tIecId..tq am
permit issuance am is coordinated by the City's Pl.anni.n;J am
Buildin;J Services Department. Qxle a deve1"'P""',L 1-"-,\.._1 is
received by the City, the IEC meets am acts within a ten (10)
day period, thus, a11owi.n:J far a CI'le step review ~.....- in the
shortest time frame possible.
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since the IR: is CXlOrdina1:Eld uOOer c:ne deparboent head, the
fl:Inct:i.cnin; of the unit is prcwided conti.rmcus guidance and
scr:uti1'Iy to ensure that the prhnary objective of fast t:racJciJ'r;J is
always met.
B. ParIdJlcr IU'll'I Set-_...,. -, i er
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'!his }'L' y:>sal incentive will take effort within six (6) IIa1t:hs of
ccnditiCl'la1 Zelle designatj,cn by the state of Califamia. '!his
ccndition at the City's portim of incentives was also included
in the City 1985 Zc:ne BRllication.
tlbere it is deteJ:mined that the S1~'Tfu1 occupancy of an
existin;J .;. ....-.cla1 structure is depeJldIa.d.. up::n ~ pr0-
hibitive off ..t..e..t parld.n;J stamards, SId1 stamards will be
waived. In the case .wbere new f...,iHtiE are l:lein} CXI'IStzuct:ed
for h1siness nt'!OllplDlCy am the set 1:lack requirements of the City
is the CIlly deterrent to sP""'OeSsfUl dsvel............tL, SId1
requirements will be waived with xespect to that "Ip"""i fic
deve1..'i......hL. It is expected 1;h!lt these partic:W.ar incentives
will sti".,1ate the deve1~d., l'8habilitaticn am re--oocolplDlCy
of certain h,ildin;Js/laM due to parcel size am lot CXIYlmIge.
As was }&~ uOOer the 1985 EnteJ:prise Zelle ..... 'l" oaal and
adcpted by City Resolution Nlmi:lerEld 85-411 (Attad1ment NImiler
->, the CitY authorized its Pl.anniJ'q and Jlni1<Un;J services
Department to prepare Code ~ for i'"P'--Ution of parld.n;J
am set l:lack modificatiotls within the. 0 ....-. cia1 area of the
~ise Zelle. 'l11e CitY's Pl.anniJ'q and Bni1din:J services
Department will dsvel.q> and i1IpJ.ement these dlan;les atce
ccnditialal designation is received.
:1:. t!IoI_ PJ:8vIIQtion
As was }'L~ uOOer the City 1985 ~ise Zale ARUication
and currently CD;JOin;J, the City has focused additiCl'la1 resources
through its Police Department in E!I'ISI.Irln;J a safe lYOIWIlI"1ity for
h1sir--!:i'es within the Zone area. '!his effort am call1litment will
be expaIKied to include the newly pl'~ Zelle area. As was
stated in the previaJs BRllication, two (2) Police Sexvi.ce
Centers were established within the City self-designated Zcne
area. In additiat, the Police Department has i1IpJ.emented the
NeighboJ:hood Watch P.L~aw within the Zale area. 'l11e Police
Sel:vice Centers were deve1qlEld to prtI\I'ide high visibility for the
Police Department efforts within the area, thus, act:irq in itself
as a =.ime deterrent. 'l11e Centers also prtI\I'ide quick responS9s in
the event of =imina1 activities within the area. As stated
above, this effort will expan:l with Zone "-i<Jnatiat uOOer
current proposal.
J. Business SUDDort ......ilities
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In an att.enpt to reduce the failure rate of bJsj----es within the
~ise Zone area, the City is iIl""l-"""'in;J the deve1___d.. of two
(2) Business SIJRlorl Facilities. 'l11ese facilities will be
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devel.q:lEld in ccnjunct:icn with otber incentives that willlJ9.:' ......
llV"il~1e to Zone I:ud-rr as. As stated umer the IIIlU:ioIIt:in;
sectic:n of this ~. iJOS8l (Sect:iat ucl.' a p;rim!ny goal of the
City for both the C'l..,~._.cia1 and Irdustr Areas of the Zone is
the reduct:icr\ of l:uli.nEIlIS failums by ten ~O&.d.. (lot) to fifteen
perOElht. (1St) of Clu.l.o&.t. failure rate. '!be Facilities will also be
. instrumental in assis1:in} the city to JEet otber goals for the
Zone, inc11Xlln;J:
1) '!'be ~ of f'.Jwo -.. to outside ...~----..
'Ihis role will be limited to the r'li'l{"""lSllticn of overall
infcmoaticn regardiD;J the Zone and the city.
2) E~ I\k...tc ...oI..,1.tJ.0Il
'!be Facilities will play a lellId role umer the directia1 and
guidance of the F.r1tcprise Zone J\--i ..ticn in IIIlU:ioIIt:in; of
incentives to Zone bJsinesses. IDlIns will also be JIBde en the
re.. ....--'daticn of the Facilities Manager/C>:lordinator. '!be san
.Elel:nardino EIplcyment and 'l'rainin;J ~, t:lu:algh. cutstationed
eapJ.oyees, will pJ:OVide trained llIlployees to b.1sir--es.
3) Coordiftationof D8v81---.--nt Bfforts
'!be Facilities will act as the first point of cxntact for Zone
b.1sir--~s in p1:ooeesin;r pmmits, lioeltlns and other similar
devel~.t requirements.
As stated lIbaYe, the F.r1tcprise Zone 8Jsiness As"""C'iaticn will play
a lead role in the efforts of the 8Jsiness SlJRlOrt Faci1i-t.ies. '!he
Associaticn will be fOt1lled by initially invit.in1 key b.1siness
owners ftan the Zone to serve en an .interim I:lasis once Zone
designaticn has been received. 'Ihis core graJp will develc:p by
laws, policies and goals for Pl......... funot.icnin;J of the graJp. other
1IlIOIIIh<>m will be added t:lu:algh. a oont:raotual. mlaticnship in order
to pn:perly lV""""B the services of the Facilities. A small bee
will be charged (pro-rata) for dert:ain services that require lIm"e
than U<<l (2) halrs of staff time. '!be As'llOC:'iaticn Board of
Directors will gcvem the cperaticn of the Facilities in
cxmjunctian with the city's Redevel"'l-"""".t ~ (Attac:bment: NuniJer
) .
In JEetUl;r the goals mentia1ed lIbaYe, the followin;J "P"'"'i fic
activities will be undertaken by the 8Jsiness SUW01.t. Facilities:
o
1) -.1....-.. "1"
Reduction of failure rate by ten peroElut (lot) to fifteen (15%)
over a three (3) year period.
1Ict:ivities
o
a. PrcNisien of tecilnica1 assistance to b.1si---;;es inc1udi.n;
infcmoat1an en J:'eaSCiI1S for b.1siness failure, averal.l
irxnlst%y as a l4lole, product distrib.1tian, sales, pricin;r
7
0 b.
c.
d.
e.
f.
o
o
and ~tim.
ProIrisian of referral assistance to Aku-Uf:'Llate profes
sianal. services such as llClCCUI'ltirq and legal.
...,.....,.,a:in;J of 0CIIpJter services, lim"uy services, ClElht...al
typ:in;J and mil.:in;J for small, (> ....-. cial ventures.
srecb,ized oamsel:in;J (CI'IB cn-ale) for start-up busi
rae-as .
ProIrisial of bmJness seminars and &aJroes in exnjunction
with the thftn"1ity COllege district.
Packag:in;J of loan teqUests for cc:nUderatim by finan::in;
resources.
2) Goal N1"~ "2"
o
~ of Zone to cutside busil"--el!l.
ktivities
a. Distrib.ltian of infomation broctIUres in conjunction with
City Deparbnents (see sectia1 _, Markst.i:R;J) and the local
""",,I era of CI....-. oe to busirur'es wishin;J to relocate.
b. Relat:in;J to ptospect:i.ve relocatees of the factors and
carr:iitia1S that affect certain industry in the area.
c. Participat:in;J in Ecananic Devel._.t lil:lrkshqls, seminars
and ptasllI.tations held for likely business ~.....pects.
3) Goal ."her "3"
o
Eoonanic Sri".., ation
ktivities
a. Creation of a loan pool, us:in;J cw.......l financ:in;J med1mrlsms
within the thftn>rdty Devel._tt Department and the
Redevel_tt 1qercj (see Iam Incentives, Item Nuni:ler _,
Section -> to attract ather &aJroes of financing.
b. Cklordinate with the Ecananic Devel._tt P.L":ILaIU Ccmnittee
(EDPC), whic:h is the Ccmnittee responsible for l\l!lJdn;J loan
reo .......,mtions to the Mayor and CI.....I'} Cbmcil, in
attract:in;J additional finances and inc:reased bank
participation in the Zane area. ('!be EDPC is 0CIIprised
prilIIarily of area bank J:epl.1SIlI.tatives, see section ,
Financing) . -
c. Play prilIIaIy role in markst:Jn;J Zone :imentives to Zone
B.1s~S'es. nus will be dale through the active part!
cipation of the B.1siness Association us:in;J newsletters,
p.lblic service anncuncements, "net:wI:nid.n;, and ather
8
0 d.
e.
f.
q.
o
o
meni:lershi.p events.
0:l0J:dinatic:n of vocatialal trainin;J efforts by the San
Bernamino ~loyment and 'l'rainin;J 1qercy in meet:.irJ]
bJsiness needs.
O:loJ:dinatien of plClo",.....,.L. of trained euployees in bJsi
r-~es with San Berna:I:dino ~loyment and 'l'rainin;J 1qercy.
0:l0J:dinatic:n of plllO"'.~1t incentives to bJs:iJo--- with San
Bernardino ~oyment and 'l'rainiJ'q 1qercy.
0:l0J:dinatic:n of Targeted Jcb Tax Cl:edit ('IDTC) VCl.lCIlerin;J
with the ~oyment Devel...,......lt Department (note that
enp10yers have been reluctant in the pest to 1I88t the
VCl.lCIlerin;J requirements for '1DTC prim!Irlly "-wlOJe of the
preparin;J of TIIe<"""'~"IY ~""""1I:s en the pIlrt of the en
player) .
h. Fc:lst:erirq better linkage ~ lIIlIm1facturers within the
1n:Justria1 Zci1e and retailers in the n --.-. cla1 Zci1e for
better ..,-;- --ibllity to products.
4) Goal 11I- "4"
o
O:loJ:dinatien of Devel...,......1l Efforts
kltiv:l.ties
J\ct.in;J as the first point of ccntact for developers and Zci1e
bJs:iJo--es is pl:OCMSin;J of pezmits and lloense ~""""1I:s.
('Ibis effort will beooordinated with the aminess Develcp IIleIlt
Section of the RlIldevel...,.......t 1qercy, AttadmImt NuIIiJer ->.
In carryin;J cut the above role, the aminess &~t Facilities
will act as the pri.maJ:y Q."1'lDel1t within the city st:ruc::tme for
dsve1cpin;J Zci1e bJsiness. '1hoogh a level of aut.anny will be
provided to better facilitate the above role, the city, thrcu;!h
its city 1\dministrator, will ....--vft the meet:.irJ] of yearly goals
in det:ennining future qleratiCllS and relaticnships.
'!he Facilities will be initially financed for a two (2) year
period (see Attad1ment NuIIiJer -> for prelimi.nazy l:m;Jet
consideratiCllS. For the initial two (2) year period, the
Facilities will be financed by a oanbinatian of funds fran the
Redeve11.'}o&"",1t 1qercy, o:mmmity Devel...,......it IlepartJDimt: and the
San Bernardino ~loyment and 'l'rainin;J 1qercy and a fee for
seJ:Vioe st:ruc::tme within the aminess SI.glort Facilities.
It. ,......~fo...l 1'IIr>.......-ts
Fac:h year, the city of San Bernardino updates a five (5) year
Capital DIprovement Pl.~aw Plan. '!he Plan prcwides for
construction, zecanstruct:ien, rehabilitation and get-.a1
inprovements for the fo1lCMi.n;J:
o
-~9
0 0
1) General )31'; 1 dings
0 2) SL...e.:.ts ani SL...eet Lightin;J
3) Sewers
4) stcmn Drains
5) Traffic (MIL...ols
6) Parks ani Recreation
7) Recreational Field Lightin;J
'!he Capital Illprovements P.I."':ILaw p1.~ for the entire City of
San Bernardino for the five (5) year period 1989/1990 ~
1993/1994 liOOld require a total expenditure of $86,336,339.99. Of
this lIIIXlUl'lt:, a total of $ will be expellded in the
Entezpri.se Zone area. '!be foJ.l.owin;J itsas (ra1ll'l->e1:ed "2" ~
"5" above) oc:wer those expenditures that liOOld IIXlSt affect business
&!ve1~IL facilities within the Entezpri.se Zelle area (items are
listed by project "l[""<"ific and total. ant:iclpated IIllpenditures) :
'1';'~.~~J"-,-~ ~~ .~t~i.L,:': ,:
mDDr.l'
o
VARIOUS cr.DU:il:i'~'D
Capital iDproyements in Redevel~Jt
Project Areas.
CElN'l'1W. Cl'1'lC soum
Reali'::l"...,...t of sb.....ts and 0ClllStxucticn
of un::lergramd utilities and laM""""'Pin;J.
$1,700,000.00
$7,700,000.00
.... CF.DU!iI5'.... A!I) IIILL 1S.DU:iI:i'....
RemcIre 0CIlCk...t.e cross gutters ani fill in
dip with aspw.t ClOo.......te payment.
WA'1'!:RIGN AVENlIB
RP.plaoe lli'!;..,.", st..=t lights, fran Second
SL........tt to Ninth St..=t.
$ a,100.00
. 70,000.00
soum '..' cr~".
widen to provide second sooth bo.md lane of
west bo.md onranp to 1-10 Fmeway.
WA'1'!:RIGN AVENUE
tJJx3ergrcmn utilities fran Santa Ana River
to Ninth street.
. 25,000.00
$6,000,000.00
'lft.C!IZII',,.. 1S.L"IU:iI:ir
Rehabilitate payment fran Medical center
Drive to Crestview Avenue.
$ 938,000.00
o
Hr. VERtal AVENUE
$ 526,700.00
10
o
Rehabilitate payment fran Grlmt Aveme to
8ecxni street.
o
111)11 1S.nu:iI5'....
F<=!pll'l...... steet li.ghtin;J fran Fifth Sb...et
to Baseline SL...eet.
1I1a'.flllDN AVEtltlE
Rehabilitate pavement an:i safety related
i.nprovements fran Rladl.ards BaJJ..evald to
Mill street.
1I1a'.flllDN AVEtltlE
widen to six (6) lIlnel;I an:i safety inprave-
menta fran Mill SL...eet to Fifth SL.....et.
~ AVEtltlE
Replace 01.1.........tal ..L...e..d: lights, fran
Fifth SL...e..d: to Baseline St......t.
:NDll'H ISJ.~.l.
Rehabilitate payment fran "E" SL.......t, to
Ti.n:---"'1Oe Avenue.
SOUDI .... D".nu:iB....
Rehabilitate pavement fran oran;e Shew Read
to Mill SL.......t.
o
K1'. 'V!:RtDr AVDIlB
tJn:!ergramd utilities fran Tenth SL.......t to
21st street.
HILL 1S.DUliI5'.....
widen to sixty-four feet (64') be.twen a.u:tls
an:i rehabilitate payment fran "Ell SL.......t to
Santa Fe Railway, E/o Sierra Way.
JOlJOR A=.IaUAL
QJns1:ruct major arterial accross Santa Ana
River, be.t\1eeI'l "E" SL....,.;t an:i Tir:t""""''1Oe
Aveme.
BY-PASS
QJns1:ruct By-Pass aroond Nortal Air Force
Base fran Mill street to TiRlecanoe Avenue.
!aLL 1S.DU:iI:i'.L"
widen Mill SL...eet to SElITeIlty-'two feet (72')
I:letween aJrl:ls fran Wat--'l Avenue to
Tippecanoe Avenue.
o
QM{ ISJ:lC.I:Zi....
Widen:in; of Oak Sb.....t I:letween D.lreka street
an:i "K" street.
K1'. 'V!:RtDr AVEtltlE BRIDGE
11
o
$ 101,000.00
$ 400,000.00
$1,1113,000.00
$ 108,000.00
$ 250,000.00
$ 400,000.00
$ 420,000.00
$ 1550,000.00
$8,000,000.00
$1,600,000.00
$1,500,000.00
$ 37,000.00
$4,000,000.00
-
o
~".. -.....(t of Mt. AvenJe over Santa Fe
Railroad yaJ:ds.
o
SIERRA WAY
Exten.i Sierra Way fran 0ranJe Show RcIld to
Mill SL....et.
WADllImIr AVENllB
Iamscapin;J wat-_" AvenJe fran Santa Ana
River to Central AvenJe.
E. VERR::IN AVENOB
Widenin;J Mt. Vernon AvenJe to six (6) J.ar.s
fran Highlam AvenJe to I-10 Freeway.
MILt. IS........... BRDXm
CalstJ:uct second bria;Je en Mill street over
Santa Fe Railway "B" yaJ:ds.
0lWU!: SIIJlf R:lN)
Exten.i 0ranJe Sholi RcIld fran Arrowhead AVEn.Ie
to wat-_" AvenJe.
HILL a-...'JU:iIS'.... - HIISE I
'l\il) (2) of two (2) lIlIIJ.Ial payments to install
Master Plan Drain fran ~e creek to west.
of Pemsylvania AvenJe.
o
HILL r::r~.a:
Install st:aJ::m drain fran "E" street to WaJ:m
creek Olannel.
o
$2,000,000.00
$ 400,000.00
$25,000,000.00
$6,000,000.00
$2,500,000.00
$ 105,500.00
$ 218,700.00
E. VERR::IN AVENUE $ 700,000.00
Install Blase "1" of "3" stotm drains, fran
Seventh ani Westem SL......ts to Baseline Aveme. .
M1lSTBR PIM IlRaDI $ 440,000.00
Install Master Plan Drain in -''''''''''''It fran
E1 Camino Real to 0r'an;Je Show RcIld.
NINlB lS........"r $2,500,000.00
Install st:aJ::m drain in Ninth SL..=t fran "E"
SL......t to '!Win creek (A-2).
CI!lRl'RM. AVENUE
Install st:aJ::m drain in Central AvenJe fran
East '!Win creek to Tiwecanoe Avenue (0-16).
''I'' lSuu:iI:i.... SEIlER - HIISE 1:
O:lllstruct sewer fran Mill street to Sixth
street.
o
"I" D".&:1<I!iI:i.... SEIlER - HIISE II
O:lllstruct sewer, fran Sixth SL......t to
M..1soott street.
12
$ '20,000.00
$1,305,800.00
$ 735,000.00
-
o
o
IllNDI CFUU5I:i'.I: __
Install xeJ.ief sewer bebleen Ninth SLr..-t
and Arrowhead Aveme and Eleventh SLr..-t and
Wateman Avewe.
8OO'DI .... Cf.nu:il5'.I:
Install xeJ.ief sewer frail Santa Ana River to
Blood Bank Read.
ARR.,-..III:.-m &v.I!iL'IJB
Install xeJ.ief sewer betwen 'lhird and
Eighth StJ:eets.
IllNDI 1S.&."IU:iI5'J:'
!blify traffic signals frail "B" SLr......t to
sierra Way.
.... Cf.a.".KI:iI5'J."
!blify traffic signal frail sixth SLr....et to
Tenth SLr......t.
........... ,'RIll! AT Hr. VERN:lN
u-!blify traffic signals.
8OO'DI ", Cf.L"1U5I5".L"
Install left-tum P1ases at Mill street and
Inland center Drive.
o
HILL Cf.nu:il:i.l:
Signal interoannec:t frail Mt. Vernc:n to "G"
street.
~a8'r.-nm 1S.DWiI5".L"
Install detection loc:ps to coordinate signal
system at "B" Sb.....t, "E" SLr......t and sierra
Way.
Hr. VERN:lN AVDltlB
InteJ:ClOIli-..."t signals frail Rialto AveruIe to
Baseline street.
KILL CS.&:N!il5'.... AT ''ZI' tf.DU5l!i'J."
!blify traffic signals, prt:I\Tide int:eJ:u.."....ct
with "B" street and "G" SLr..-t, and widen
..Lr..eet.
RDWro AVENUB
widen and ~..ade ct'ClSSin;J protection at grade
crcssiIq between Meridian Aveme and Rancilo
AveruIe.
o
13
o
. 485,200.00
. SO,OOO.oo
. 1113,400.00
. 2112,000.00
. U4,000.00
.
37,000.00
.
45,000.00
. 13&,000.00
.
31,271.00
.
112,000.00
. 135,000.00
. 180,000.00
~ ~
[~
~ E
== 5
8 Ii
1m
,
---,
I
I
I
I
I
,
1
I
I
I
I
I.
I
1/1
" ~--:.:;;,;oo::;""'-:..
'ftIlIClrInO,/ I --fill... ..' ':.~~,__, ..____ I
. ..,.-- . .... I
~., ,.... :
' .
./ I
t1^"
" EXHIBIT "3"
State of California - Franchise C Board
Guidelines for Enterprise Zone Tax Incentives
o
,
Enterprise zones have been ....blished
~In California to ati. 'mulate develOpment In
. lected economically-depressed ar881.
Tha Enterprise Zone Act provides illite
lex incentlvell for corporations and
Individuals who operate or invest In a
bUsiness located within a designated
enterprise zone.
The Enterprise Zone Act provides live
business-related lex incentives which
are explained In this publication:
1. Credit for sales and usa tax paid on
certain machinery;
2. Credit for employing qualified
employees;
3. Business expanse deduction for tha
cost of certain maChinery;
4. Net operating loss carryover;
5. Net interest deduction for lenders.
A sixth Incentive is available only to
emp/oy_ who work in a designated
enterprise zone. Employees may claim a
lex credit to reduce tha amount of lhelr
Income tax on wages earned in an
enterprise zone. See form FTB 1046.
This guide briefly explains the five
business-related tax incentives to help
Investors and business operators
understand the potential financial Impact
of each provision and what must be
done to take advantage of tha lex
Incentives. Detalled Information about
,..,.. methods Used to compute allowable
~ savings Is explained In form FTB
3805Z, Enterprise Zone/Program Area
Deduction and Credit Summary.
An Important ConsIderdon
Enterprise zone lex Incentives apply
only to Investments and business
activities that are undertaken altar an
enterprise zone has received final
designatiOn. In addition. the geographic
boundaries of a zone are important to
kno'(t to del8rmine whether tax
Incentives era available at a specific
bUsiness location. Further information
abouttha geographic boundaries 01 the
zon.. and the datas of official final
desigABtiOn Is available from:
CaRlomla Department of Commerce
1121 L Street, Suite 800
Sacramenfo, CA 15814.3101
AttentiOn: Enlerprlaa Zone Programs
Tafeph_: (fl') 324-8211 .
t . 511.. Ind U.. rll Credit
California Income or franchise lex may
be reduced by the amount of sales or
use lex paid on certain machinery
purchased for exclusive usa In an
entarprise zone. In any year, individuals
may claim a credit equal to the lex paid
~ Incurred on tha first $1 million of
ulpment cost; corporations may claim
credit equal to the lex paid or Incumsd
on the first $20 million of equipment
cost.
To qualify for tha credit, tha machinery
end machinery parts must be used to:
. Manufacture, proc.... combine or
otherwise fabricate a product;
. Produce renewabie energy
resources; or
. Control air or water pollution.
The following conditions apply when
you claim this credit
. You must use tha machinery and
machinery parts exclusively within
tha boundaries of an enl8rpriaa zone;
. The amount Of credl~ In any single
year, Is limited to the lex that would
be Imposed If tha Income releted to
bUsiness activity In tha enterprise
zone rapresented all of your net
Income; you may claim tha remaining
credit In future years by applying it to
lex Imposed only on enterprise zone
Income;
. You may not Increase tha basis of
prOperty by the amount of the sales
or use lex paid;
. II you purchase out-of-slate
machinery and claim tha credit for
the use tax paid, you will be allowed
the credit only If equipment of a
comparable quality and price was not
available for purchase In California
whan you needed It.
Example: You spend $50,000 to pur-
chase equipment used to manufacture
wooden toys. The sales lex paid for the
purchase Is $3,000. You may reduce the
amount of your lex Imposed on enter-
prise zone In.come by up to $3.000.11
you cannot claim the luli $3.000 In a
single year. you may carry over the
remaining amount to reduce next year's
lex imposed on enterprise zone Income.
Record Keeplng
To support the sales and use lex credit
claimed on your lex return. you must
keep records thatldenllfy or describe
the proparty purchased. the amount of
ssles or use lex paid on its purchase
and the location where it is used. II yOu
purchase out-of-llIIte machinery. you .
should be abie to subll8ntiate attempts
to purchase comparable items within
California
2 Hirln, Credit
A qualified business may reduce lex by
the amount of wages paid to one or
more qualified employees.
For an employer claiming this credi~ a
new employee Is someone who Is hired
8Iler the area Is designated as an
enterprise zone and Is:
. Receiving subsidized employmen~
training or services under the terms
of the Federal Job Training
Partnership Act (JTPAl; or
. Registered In tha Greater Avenues for
Indepandjll1Ce (GAIN) Program. the
Work .lncentive DemonstratiOn (WIN)
Program, or the EmplOyment
PreparatiOn Proaram (EPP); or
. CartIIled by the Emp/oymenl Develop-
ment Department as eligible for the
federal ~rgeted Jobs r-ax Credit
Program (TJTC).
Individuals who era partlclpanta In these
qualifying proorams should get Form
DOC-EZ1, Enterprise Zone HIring Credit
VOucher, from the agency lhet
admlnlll8rlthe JTPA, GAIN, WIN, EPP
or TJTC program.
You may claim up to 50 parcent of the
wages paid to a qualified employee as a
credit agall1lllax Imposed on enterprise
.zone Income. the credit Is based on the
I....r of the actual hourly wage paid or
150 parcent of the mInimum hourly wage
established by the Induatrlal Wellare
Commission.
. Prior to July 1, 1988. the minimum
. hourly wage was $3.35; 150% of
$3.35 Is $5.02. The maximum hourly
wage on which this credit may be
based Is $5.D2.
. On or after July 1. 1988. the minimum
hOUrly wage Is $4.25; 150% of $4.25
Is$8.ji7. The maximum hourly wage
on which this credit may be besed Is
$6.37.
The chart below shows the actual
parcentage of wages paid that may be
claimed as a credit.
Period of
Employment Credit Allowable
1st 12 months 50% of wages paid
2nd 12 months 4O'l6 of wages paid
3rd 12 montha 3O'lfI of wages paid
4th 12 monlha 2O'lIl of wages paid
5th 12 months 10'l6 of wages paid
Aller 60 monlha 0'l6
Example 1: On Januery 1, 1988. you
hired a qualified employee who worked
the entire year at your enterprise zone
business. From 1 11/11 through 8130/11,
the employee worked 900 hours at $4.00
and earned a totel of $3.800. From
711111 through 12/31/88, the employee
worklld 900 hours at $4.25 (new mini-
mum wage) and earned a totel of $3.825.
The amOunt of the hiring credit available
I.s $3,713 ($3,600 + $3.125 x 50%).
Example 2: On January 1, 1988, you
hired a qualified employee, who worked
the el!tire year at your enterprise zone
busin.... During tha year. the employee
earned $1',700 for 1,600 hours at $8.50
an hour. Your hiring credit Is computed
as follows:
Slap 1: 1/1/11-6/30/88:
$5.02 (not $8.50) x 900 hrs. " $4,518.
Step~ 7/1/88-12131/88:
$8.37 (not $8.50) x 900 hrs. " $5,733.
Step 3: $4,51' + $5.733 x 50% " $5,128
maximum credit available.
.
.
,
i
FT8 Pub. 1041 (REV 11-11) PAGE 1
Umn.u-:
. The hiring of a qualified employee
must take place altar '" area has
O been oIIicially deslgnated an antar-
prI.. zone by tha Department of
Commerce;
. At least 90 percent of the qualified
amployee's work must be directly
related to a lreda or bulln_ activity
located In an enterprl.. zona, and et
IaBst 50 percent of tha employee's
work must be performed Inside the
boundaries of an anterprise zona;
. A bulln_ expan.. deduction may
not be taken for the wagas on which
this credit is baaed;
. Tha credit must be reduced by any
federal or. state jobs credit claimed;
. The amount of tha credit available f9r
wages paid to. aU quallflad employees
may not exceed the amount of tax
thet would be impoHd If the Income
related to busin... activity in an anter-
prl.. zone W81 your only income;
. If the emount of the credit for employ-
ing qualified persons Is greater then
the tax on enterprise zone Income In
any Y88r, the exc_ credit may be
cerrled over to future Y88rs.
Recap\uN ollila credit If this credit Is
allowed for wages paid to a quallflad
amployee who Is terminated within 270
days altar the ,tart of employman~ an
additional tax, equal to the credit
allowed, will be due on the return filed
d:or the Y88r during which the employee
terminated. This tax will not be
ded if the termination was:
. Voluntary on the part of the
employee;
. Caused by the employee becoming
disabled;
. A raspon.. to employee misconduct
. Due to a substantial reduction in
bullneea; or
. CarrIed out so that other qualified
Individuals could be hired, creating
an Inc..... In the number of
quallflad employees and their hours
of employmenl
Record KaapIng
If you hlra qualified amployees and
claim this credit on your tax return. keep
records including:
. Copies of Form DOC-EZ1, Enterprise
Zona HIring Credit Voucher, for each
quallflad parson hired;
. Records of any other federal or state
subsidies you may have received for
hiring qualified individuals; and
. An amployment history for each
qualified employee showing the dates
of employman~ wages paid, the
duties performed, and the location of
employmenl
Important c-ld...aUon
apayars who claim both credits
. nable to antarprl.. zone busln...
rators-tha sales and use tax credit
and the credit for hiring qualified
employees-may not claim a total credit
amount which exceeds the tax Imposed
FT8 "'1047 (REV 11-81) PAGE 2
o
on enterprise zone Incoma In any lingle
year. However, credits which exceed ille
tax ImpoHd on enterprl.. zone Income
may be .carrted over to offset tax
Imposed on enterprise zone Income In
subsequent years.
3 BUllntII Expen.. Decluctlon
Part of the coat of certain property
purchased .for axcluslve u.. In an
enterprise zone may be deducted 81 a
busln... axpense In the first year It is
placed In sarvIce.
The type of property which qualifies for
this apeclal treatment is tangible per-
sonal property (1lClt real estate) which is
used for business purposes and is allgi-
bla for depreciation. This Includes most
equlpmen~ furnishings and vehicles
purchased for exclulive use in '"
enterprise zona, but not oIIice supplies
or othai smallltams which are ncirmally
lneligibla for depreciation.
The maximum amount which cen be
deducted rang.. from $5,000 to $10,000.
The amo\lnt of the deduction depends
on the following two factors:
. The date the property W81 placed in
service; and
. The date the enterprl.. zone
received Its final designation.
If property Is placed In service In the
year the enterprl.. zone Is designated
or the first Y88r altar designation, the
limit ot the deduction Is $5,000. If
property is first \lsed In the second or
third year after the anterprlse zone
designation, the limit of the deduction Is
$7,500. If property IS fist used four or
",ore years after the enterprise zone
daalgnation, the limit of the deduction Is
$10,000.
The alection to treat the coat of qualified
property as a business expense must be
made in theY88r the property Is first
placed In service. How_r, this election
is not allowed if the property was:
. Transferred between members of an
affiliated group;
. Acquired as a gift or Inherited;
. Traded for other property; or
. Recalved from a personal or
business relation as defined in
Section 267 of the Internal ~nue
Code.
DepreclaUon
The basis (cost for depreciation
purposes) of the property must be
reduced by the amount allowed 81 a
deduction.
. Dellreciation of the property in
excess of the amount deducted may
be claimed using any method of
depreciation normally allowed.
. The deduction allowed by Saction
179 of the Intamal R_nue Code
relating to an election to expanse'
certain depreciable busln... asseta,
does not apply.
o
. Corporations may IlClt claim
additional first-year depraclatlon for
lhasa asseta.
. The full emount of the deduction
must be Included In income If the
property Is no longer used In '"
entarprIse zona during the first two
years after the property was first
placed In ..rvIca.
Exampla: Th_ months altar the
location where you do buliness has
been dalignated an entarprIse zone
you pur(:hasa a baking oven which '
costs $20,000. You dapracJata the oven
over a ten-Y88r period UIIng the IlrIIlght
line method. The entarprIse zone
busln_ axpen.. deduction you may
claim Is $5.000. You may also claim the
normal $125 of dapracIatIon which is
allowed for aech month the oven w8lln
servlca during the year. ($15,000 + 120
months" $125.)
Nola: For equipment placed In aervIca
after 1986, dut to racent changes In the
tax 11IW, the dapraolaUon allowed to
Individuals. partnarahlps and S
COrflOr8t1ons typlcally will provide a
greater deduction uling nsgular
dapraclatlon mathods.
RacorcI Kaaplng
You should maintain Information which
will allqw you to subatantlate your claim
for the first-year business expense
deduction. The records for aech Item
should show:
. The IdantIty and purchase price;
. The dale on which the property was
first placed In sarvIce In an entarprl..
zona; and
. The location whare the property Is
used.
4 Net Operatlllf Loll Cent!!!!:
Net operating 1_ (NOLa) 01 individuals
or corporations dolng business In an
enterprl.. zona may be carried over to
future years to reduce the amount of
taxable enterprise zona Income for
those yalirs. Tha NOL carryover Is
determined by computing the busln_
lOll which results strictly from OOs''1811
activity In an enterprise zone.
The following IImltstions apply to the
enterprise zone NOL carryover:
. NOL carryovers ara allowed only for
losses occurring In a year beginning
after the date the area is daalgnated
as an enterprise zona;
. Financial Institutions uling bad dabt
reserve methods may extend the
Loss for only five years;
. A NOL may IlClt be applied to years
prior to the year In which the NOL
occurred (no carryb8cks~
. I'!lrt-year residenta of California must
prorate the credit Sea form FTB 3805V,
Net Operating Loss Deduction.
If you qualify to c1alm mora then one
type of NOL. you must maks an
irrevocable elecUon as to which type of
NOL you claim. This alaction must be
mada on the raturn filed by the original
or extended due data.
IEumple: In your lirst year 01 business
In an entarprise zone, the activities in
~e entarprise zone show a $5,000 net
~rating loss that Is tha exclusive
resull 01 your enterprise zone activity.
Because 01 the loss, you owe no tax on
enterprise zone income. In the sacond
yes~ your business shows a profit 01
$8,000. You may carry over the $5,000
first year loss to reduce your taxable
entarprisa zone income lor the second
year.
Record Keeping
To support your claim 01 an NOL
carryo_ on your California tax return,
you should maintain:
· Racords showing the stetus date
your business activities began In an
entarprise zone;
· Accounting racords showing that the
loss was the result 01 business
activity in an enterprise zone; and
· Financial data Indicating Ihatthe
Income that the carryo_.ls oIIselllng
is the product 01 business activity in
an entarprise zone.
5 Net Interest Deduction
for Lende,.
A deduction from income is allowed on
the amount 01 "net Intaresf' esrned on
loans made to a trade or business
~tad in an entarprise zone.
~etlnterest" is defined as the full
amount 01 the Interest, less any direct
expen_ incurred In making the loan.
Some examples 01 direct expen_ are:
commissions paid to the loan
representative, the cost 01 money
Incurred in lunding the loan and bad
debt expen_.
Types 01 loans that qualify lor this
deduction Include business loans,
mortgages and loans from non-
commercial sources.
Requlremenla
· The loan is made to a trade or
business locatad solely within an
enterprise zone;
. The money loaned is used strictly lor
the business activities within the
entarprise zone;
· The lender hes no equity or other
ownership interest in the trada or
business; and
· The loan was made alter the
enterprise zone was deslgnalad.
IEumple: You loan $500 to an
entarprisa zone business that meets the
requirements listed above. You esrn
$550 01 intarest and incur $300 01
axpen_ directly related to the loan.
~ may deduct $250 ($550-300) 01 net
Vrest Irom your taxable income.
~ Keeping
To support tha "net interesf' deduction
on yo~r tax return, you ahould maintain
records lor esch entarpriae zone loan
ahowlng:
· The identity and location 01 the trade
or business to which you have
loaned the money;
· The amount 01 your loan, the amount
ollntaresl esrned, and the amount 01
any direct axpen_ associalad with
the loan; and
· Use oltha loan (I.a" purchase
Invoices).
For More Informetlon
Geographic BouncIarlea
Any inlormallon about geographiC
boundaries 01 an entarprise zone, dataa
01 designation, the Entarprise Zone
Hiring Credit Voucher or other
inlormation not reJatad to the tax
incentives ia available from:
California DepartnMnl 01 Commerce
1121 L Street, SuIte 100
Sacramento. CA 15114-3_
Attention: Enlerprlae Zone Programs .
Te/eph_: (118) 324-1211
Enterprl.. Zone LocItlons and
Designation Dates
enterprise Zones Dealgnallon DIlea
Celexico . . . . . . . . . . . . . . . . . . . . 10/15/86
Eureka..................... .10/15/86
S.VV. Fresno .................10/15/86
LA. - Central City. .. .. .. .. ... 10/15/86
Pacolma .................... 10/15/86
PortetVille...................10/15/86
S.E. San Diego.............. 10/15/86
Yuba City/Marysville .........10/15/86
San Bernardinol RIverside
(Agua Mansa) ............. 10/15/86
San Jose.. .. . .. .. .. . .. . .. ... 12/31/86
To Incentives
If you have questions about \he Celi-
lornia state tax Incentives available to
lenders or to busin_ operating in a
program area, please call the toll-free
number lor your ares code lislad below:
From Ares Codes 213, 619,
714, 80S, and 818 call .. 1-800-852-5711
From Ares Codes 209, 408, 415, 707,
and 916 (except Sacramenlo)
call.................. .1-800-852-7050
From the Sacramento Metropolitan
area call .................... 369-0500
II a toll call1rom your Sacramento
location, call .......... 1-800-852-7050
From outside Calilornia, call
(nottoll-fres) ............ 916-369-0500
o
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m Pub. 1047 (REV "... PAGE a
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1
RESOLUTION NO.
2
RESOLUTION OF THE CITY OF SAN BERNARDINO DESIGNATING THE
AREA CONTAINED IN THE ENTERPRISE ZONE BOUNDARIES TO BE A
DEPRESSED AREA AND IN NEED OF DESIGNATION AS AN ENTERPRISE ZONE
IN ORDER TO ATTR~CT PRIVATE BUSINESS FOR FUTURE DEVELOPMENT,
GRANTING CERTAIN INCENTIVES IN THE ENTERPRISE ZONE, AND
AUTHORIZING APPLICATION FOR DESIGNATION TO BE FILED.
3
4
5
NOW, THEREFORE, BE IT RESOLVED BY tHE MAYOR AND COMMON
6 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
7
SECTION 1. Recitals.
8
A.
The Mayor and Common Council of the City of San
9 Bernardino have thoroughly researched issues involved in
10 establishment of an Enterprise Zone within the City limits of the
11 City of San Bernardino, and are satisfied that establishment of
12 an Enterprise Zone will be beneficial to the City of San
13 Bernardino.
14
B.
The Mayor and Common Council, after due deliberation,
have found and determined that the neighborhoods contained within
16 the boundaries of the proposed Enterprise Zone are in need of
17 special assistance, and have agreed to adopt incentives for the
18 Zone.
19
C.
The Mayor and Common Council have established an
20 Enterprise Zone wherein tax advantages and other incentives will
22
21 be used to help stimulate economic development.
D.
It is anticipated that the Enterprise Zone will
23 preserve existing jobs and create new jobs in the Zone, encourage
24 exist.ing businesses to remain in the Zone and to expand, cause
25 the location of new commercial and industrial development within
26 the Zone, and in other ways will serve to revitalize the Zone.
27
28
/
/
/
DAB/ses/Zone.res
August 30, 1990
1
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1
SECTION 2. Finding and Determination.
The Mayor and Common Council of the City of San Bernardino
2
3 find and determine that the area contained in the Enterprise Zone
4 boundaries is a depressed area and in need of designation as an
5 Enterprise Zone in order to attract private business and private
6 sector investment for future development.
7
SECTION 3. Incentives.
8 The Mayor and Common Council hereby approve and commit the
9 City to providing those incentives to development within the
10
Enterprise Zone as are set forth in detail in the preliminary and
final Application for Enterprise Zone Designation, a copy of
11
12 which is attached hereto as Exhibit "1", and incorporated herein
13 by reference and to complete all actions set forth therein,
14 should the final application be awarded conditional designation.
15
I HEREBY CERTIFY that the foregoing resolution was duly
16 adopted by the Mayor and Common Council of the City of San
17
Bernardino at a
meeting thereof, held on the
, 1990, by the following vote, to wit:
18
day of
Council Members:
AYES
NAYS
ABSTAIN
20 ESTRADA
21 REILLY
22 FLORES
23 MAUDSLEY
24 MINOR
25 POPE-LUDLAM
26 MILLER
27
28
DAB/ses/Zone.res
August 30, 1990
2
0 0
, 1 RESOLUTION. .DESIGNATING THE AREA CONTAINED IN THE
0 ENTERPRISE ZONE BOUNDARIES TO BE A DEPRESSED AREA AND IN. . .
2
3
4
City Clerk
5
The foregoing resolution is hereby approved this day
6
of , 1990.
7
8 w. R. Holcomb, Mayor
City of San Bernardino
9 Approved as to
form and legal content:
l 10
JAMES F. PENMAN,
11 City Attorney
12 ~)
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DAB/ses/Zone.res 3
August 30, 1990