San Fernando Valley Enterprise Zone Expansion

The City of Los Angeles has expanded the Enterprise Zone to now include Chatsworth, Canoga Park, Van Nuys Airport Area, Woodland Hills and the Northeast Valley.  Some of the incentives below:

• Employment tax credits of $37,400 per employee hired, spread over five years;


• 35 percent utility rate reductions over five years from the Department of Water and Power;


• Sales and use tax income credits for purchases of machinery and equipment;


• Lender interest deduction for loans made to Enterprise Zone businesses; and


• Priority bid preferences for Enterprise Zone businesses bidding on state procurement contracts.

The Enterprise Zone sounds interesting, but will it be effective in stimulating the growth and development of new and existing business in the San Fernando Valley? 

From the surface the benefits seem apparent in the manufacturing and distribution sector. And this benefit isn't just for a tenant, but as a landlord you reap the benefits of less stringent city ordinances and flexibility to allow for a few more types of uses. And in conjunction to the other city monies floating around for real estate owners, if you can find it "CRA", you might just be in luck.

So this enterprise zone solution is going to stimulate the economy, right? You have a great business plan. As a new business in the enterprise zone, you get 100% tax credits for the purchase of new equipment and machinery to get your business going.  You can hire someone that qualifies under any one of the 13 different categories (saves you up to $13,440 over a 5-year span), like the recently laid-off and don't forget those living in the work opportunity tax credit area which saves you and additional $2,400 per year. You have reduced parking requirements, city fee waivers, and DWP rate discounts that all put money back in you pockets, right.  It does seem promising.

So the question is, where can a new business get a LOAN? Um! Are we still at the mercy of the banks and politicians that help nurture the lending incentives? Until the key to lending is turned on, it's going to be a slow process to get things jump started. 

SEZ Zone Expansion Info Package

Commerical Real Estate Debt Maturity A Huge Problem

An estimated $1.4 trillion in commercial real estate debt is set to come due between 2010 and 2014. As the maturity dates come closer to being due, lenders are trying to work out extention plans for borrowers, thus "amend and extend".