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LOS ANGELES—Mayor Villaraigosa today joined Congresswoman Janice Hahn, Councilmember Joe Buscaino, and local business owners to celebrate the designation of the Harbor Gateway as a State Enterprise Zone (SEZ) and the opening of the Harbor BusinessSource Center, two important tools for creating jobs in Los Angeles.
"Small businesses are the backbone of our local economy," said Mayor Villaraigosa at the Harbor BusinessSource Center. "We are reopening the BusinessSource Centers to give entrepreneurs the tools they need to create jobs and grow their businesses. The redesignation of the Harbor as an SEZ will give business owners even more incentive to create jobs in the Harbor area.”
The LA BusinessSource program is part of the Mayor's Office of Small Business' effort to expand support for key job creators in LA. The city is home to 325,000 small businesses making LA the largest small business community in the country.
"Putting people back to work will be a cornerstone of my job as Councilman," said Councilman Joe Buscaino, who represents the communities of Harbor City, Harbor Gateway, San Pedro, Watts and Wilmington. "The Harbor BusinessSource Center will be a vital partner in that effort, assisting the very innovators and entrepreneurs who will provide those jobs, by helping them gain access to capital, helping with permits and paperwork and providing training and advice."
Formerly the LA Business Assistance Program, the revamped LA BusinessSource centers will offer the same synchronized and streamlined services by full-time staff throughout the city. They will focus on reducing bureaucratic red tape so businesses can create jobs faster. Project managers will help businesses navigate City services including permitting and contracting processes.
“MCS, as a minority- and veteran-owned business, understands the challenges faced by our constituents in ensuring the survival of their businesses once they’ve started operations,” said Philip Starr, Executive Director of MCS, who will run the Harbor BusinessSource. “With our own personal experience as a successful private enterprise, coupled with our staff expertise in serving diverse communities with economic, workforce, and business finance services over the last 25 years, the MCS Harbor BusinessSource has the critical matrix of services essential for equipping entrepreneurs and small business owners with the knowledge, tools, and access to capital to thrive in this challenging economy, and ultimately, to create jobs for our Harbor residents.”
The HarborBusiness Source center will now be able to help businesses take advantage of the new re-instated Harbor Gateway Communities State Enterprise Zone (HGCSEZ). After a previous State Enterprise Zone in the Harbor Area expired in 2009, the Mayor's Office of Economic and Business Policy worked with the State to create a new zone focused on commercial corridors. The new SEZ went into effect this month.
The SEZ covers portions of San Pedro, Harbor City, Wilmington, and Harbor Gateway and offers tax credits and deductions including a 35 percent DWP electric rate discount for new businesses and a State tax credit worth up to $37,400 over five years for hiring local or disadvantaged workers.
SEZs across Los Angeles have been effective tools for job creation in recent years. In 2011 alone, 5,401 businesses participated in the City’s two SEZs. These companies were able to retain over 20,000 jobs and create over 5,000 new jobs because of their participation. Companies that cite the SEZ as a major motivator for theirc hoice to stay or expand in Los Angeles include Costco, Baxter International, LuckyBrand Jeans, electric vehicle manufacturer Boulder Electric Vehicle, and many more.
Some of the valuable tax incentives offered by the Harbor Gateway Enterprise Zone include:
· Hiring Tax Credit – Up to $37,440 tax credit over a five-year period per qualified individual hired.
· Sales and Use Tax Credit – Receive 100% of the current sales or use tax as a credit when purchasing qualifying equipment.
· Business Expense Deduction – An accelerated depreciation is available for tangible personal property the first year used.
· 15 Year Net Operating Loss – 100% of Net Operating Losses may be carried forward for 15 years to reduce taxable income.
· Net Interest Deduction – Lenders earn tax-free interest on loans made to Enterprise Zone businesses.
· Business Assistance – Business assessments, financial management, & access to capital.
· Job Placement Assistance & Eligibility Screening (Provided by City of Los Angeles WorkSource Centers)
· Department of Water and Power (DWP) 5-year Electrical Rate Reduction for New and/or Expanding Businesses
· Save 35% in the first year as a rate reduction on electrical consumption.
· Business Tax Holiday – Businesses are eligible for a full three years of gross sales tax exemption provided they open or locate in Los Angeles between January 2010 anD
December 2012. (Does not require SEZ Eligibility)
· Site Plan Review Fee Waiver & Reduced Parking Ordinance.