San Diego has been named one of 40 "renewable communities" in the country, making it eligible to receive a portion of $17 billion in incentives to redevelop older communities. Just how much might be headed this way isn't clear.
The announcement by the Department of Housing & Urban Development was made at Mayor Dick Murphy's offices Thursday.
The areas standing to benefit from the incentives include Southeast San Diego, portions of downtown and East San Diego, Encanto and even Lindbergh Field (see map left).
Mayor Murphy would have liked to include San Ysidro in the program but only contiguous census tracts are eligible. North Park and City Heights may be added later.
The incentives range from tax credits to providing a zero capital gains rate on property purchases inside the zones.
The $5 billion tax package portion of the plan is divided up into wage credits, accelerated depreciation, bond financing and capital gains.
"Each incentive is tailored to meet the particular needs of a business and to offer enough of an inducement to minimize the risks perceived by businesses in locating in distressed areas," HUD writes.
"It will encourage businesses to invest in our older neighborhoods," Murphy said. "This designation will add enormously to the city's efforts to revitalize several older commercial areas and greatly accelerate what has been a positive trend toward new investment."
Businesses within the renewable communities zones are able to write off as much as $10 million for a commercial real estate development.
Each zone has a $1,500 tax credit for employees. That is less than the $3,000 wage credit for those in enterprise zones, but renewable communities boast a wider range of incentives.
Richard Mallory, HUD regional director, said the "renewable" status will be good for the next 10 years. It was part of the 2000 Community Renewal Tax Relief Act.
"These tax incentives will help businesses grow in some of the country's most challenging communities," Mallory said. "By creating the incentives that will promote job growth and economic development, we are joining with the private sector to restore economic vitality and restore whole communities in the process."
Councilman George Stevens is counting on the incentives to both revitalize his district, and give businesses room to expand. "We have the land," Stevens said. "We can use it."
Murphy said areas like Little Italy, Barrio Logan and East Village stand to reap great benefits from the incentives.
While the tax incentives aren't grants, "the credits are a toolbox" for the older community, said Mallory.
They may not be grants, but Hank Cunningham, city of San Diego community and economic development director, is excited.
"This is the big one ..." said Cunningham "This is our bread and butter."
Cunningham noted that all of the eligible census tracts are south of Interstate 8. He said there are 15 redevelopment projects, 20 business improvement districts and three enterprise zones south of I-8, many of which could benefit from the incentives.
"This is another program we can add to our arsenal," added Mike Akey, Business Improvement District Council president.
Elizabeth "Betsy" Morris, San Diego Housing Commission chief executive officer, suggested that by spurring on businesses to locate in older neighborhoods, the seeds of "smart growth" are fostered, making it a win-win situation for the community.
The community could use some help. About 40 percent of the people living in the renewable communities boundaries live below the poverty line, and the jobless rate is 13 percent.
From the San Diego Daily Transcript