Santa Ana doesn’t have the corporate cachet of Irvine or Anaheim’s tourism. But Orange County’s most populous city does have a carrot for businesses: state tax credits under California’s enterprise zone program.
Santa Ana is the only city in the county with an enterprise zone, a program designed to bring jobs to poor areas.
The zone “levels the playing field,makes us competitive,” said Lina German, enterprise zone coordinator for the city of Santa Ana. “It counters the challenges in Santa Ana.”
But the clock is ticking on Santa Ana’s enterprise zone, and others across the state. The program is set to expire in mid-2008.
So far, Santa Ana officials and others have failed to persuade the Legislature to give cities a five-year extension. With Sacramento’s budget mess, getting lawmakers to extend tax breaks is proving a tough sell.
Privately, some question whether Santa Ana, home to some of the county’s largest companies and scores of manufacturers, still needs the help.
Among the beneficiaries is Ingram Micro Inc., the county’s largest company by yearly sales. The technology products distributor employs about 850 people in Santa Ana.
“An enterprise zone is very important to Ingram Micro, and for it to be here in Santa Ana,” said Jennifer Baier Anaya, an Ingram Micro spokeswoman.
The city has selling points besides tax credits, according to Chris Chinnici, a senior vice president at real estate brokerage Collins Commercial Corp. in Irvine. Those include a strong work force and relatively cheap real estate, he said.
“There’s other motivating factors for them to go there,” Chinnici said. The enterprise zone “is just another feather in the cap.”
Santa Ana officials point to gains the city has made under the program and fear they’ll lose ground without it. Already, city officials said delays for the enterprise zone extension are hampering their ability to recruit companies.
“There have been improvements in the 15 years we’ve had this enterprise zone,” German said. “There still are needs.”
So far, extending the enterprise zone has gone nowhere in Sacramento. For at least three years, legislation to add five years to the lives of enterprise zones hasn’t got much traction.
The effort now is on its second go-around with a set of bills stuck in committee, though one has cleared the Assembly.
If an extension isn’t granted, Santa Ana officials said they plan to ask for a new enterprise zone designation lasting 15 years. But the extension is a simpler, easier process for the state and the city, according to German.
The extension effort is butting up against budget concerns. All bills that cost the state money automatically are put in “suspension” for extra scrutiny, said Colin Grinnell, a consultant for Sen. Mike Machado, chairman of the Budget and Fiscal Review committee.
Machado is a Democrat representing Stockton and other parts of the San Joaquin Valley and is seen as moderate on fiscal issues.
The enterprise zone program could be tweaked to better focus resources on the truly needy areas of California, including putting more strictly defined parameters on social and economic indicators, Grinnell said.
Santa Ana’s German said she believes the city’s zone still would qualify under stricter rules.
For more on this story, see the Aug. 15 edition of the Business Journal.
