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HUD No. 99-03
Further Information:For Release
In the Washington, DC area: 202/708-0685Wednesday
Or contact your local HUD officeJanuary 13, 1999


Zones Now Eligible to Receive Billions for Long-Term Revitalization and Job Creation

WASHINGTON, DC - Vice President Gore today named 20 economically distressed communities as new Empowerment Zones, making them eligible to share $3.8 billion in proposed federal grants and tax-exempt bonding authority to finance sweeping revitalization and job creation programs over the next 10 years.

If Congress approves full funding for the Empowerment Zones, the federal investment is expected to help create and retain about 90,000 jobs and stimulate $20.3 billion in private and public investment in the next 10 years in the Zones. This would have a dramatic effect in the areas, which have high unemployment, weak economies, shortages of affordable housing and other problems.

"Empowerment Zones create a successful partnership between all levels of government, private businesses, community groups and local residents to bring new life to inner cities and rural communities suffering from hard economic times," Vice President Gore said. "These Zones do exactly what their name says - they empower people willing to work hard to improve their communities, improve their lives, and build better futures for their children. They help connect the communities that need it most to new opportunity."

This Second Round of Empowerment Zones builds on the experience of the program's First Round, which included eleven Zones (as well as 94 Enterprise Communities), awarded in December 1994. The First Round has resulted in more than $8 billion in private-sector investment to the designated communities and unprecedented public-private partnerships.

The Second Round offers additional potential to link communities to their broader regional economies. Second-Round Zones were able to designate up to 2,000 acres of underutilized "developable property" outside the formal Zone area that can receive Zone benefits and be used for job creation for Zone residents. For the first time, Indian tribes with poverty areas also qualified to apply for and receive designation.


New Urban Empowerment Zones announced today by the Vice President are in:

Boston, Massachusetts Knoxville, Tennessee
Cumberland County (Bridgeton/Vineland), New Jersey Miami, Florida
Cincinnati, Ohio Minneapolis, Minnesota
Columbia/Sumter, South Carolina New Haven, Connecticut
Columbus, Ohio Norfolk/Portsmouth, Virginia
El Paso, Texas Santa Ana, California
Gary/East Chicago, Indiana St. Louis, Missouri/East St. Louis, Illinois


Huntington, West Virginia/Ironton, Ohio

New Rural Empowerment Zones announced today by the Vice President are in:

Cordele, GeorgiaRiverside County, California
Lake Agassiz, North DakotaUllin, Illinois
The Oglala Sioux Reservation in Pine Ridge, South Dakota

The Vice President, who chairs the Administration's Community Empowerment Board, announced new Zones and Enterprise Communities at a White House event with Housing and Urban Development Secretary Andrew Cuomo and Agriculture Secretary Dan Glickman.

"Empowerment Zones are making the American Dream of a good job, a healthy community and a good home a reality for growing numbers of our people," Cuomo said. "The Zones are a powerful engine generating economic growth and prosperity."

"These designations will further reduce government red tape and help these rural communities thrive," added Glickman.


The 20 new Empowerment Zones designated today will share $55 million in federal grants already approved for this year - $3 million for each Urban Zone and $2 million for each Rural Zone. The Clinton Administration has already won Congressional approval of $2.2 billion in tax-exempt bonding authority for the group of 20 Zones announced today, along with other tax incentives over the next 10 years.

The Administration is seeking Congressional approval for $1.5 billion in federal grants for the group of 15 Urban Zones spread over 10 years, and $100 million in such grants for the group of five Rural Zones for the same period.

This works out to $130 million in bonding authority and $100 million in grants for each Urban Zone, and $60 million in bonding authority and $20 million in grants for each Rural Zone over 10 years.


The Vice President also announced that President Clinton's proposed federal budget for the 2000 fiscal year will seek an additional $65 million in special grants that would go to some of the cities that applied for but did not receive designation as Urban Empowerment Zones. A total of $45 million of the grants would go the 15 communities - called Strategic Planning Communities - that were finalists in the competition for selection as Urban Empowerment Zones.

The Strategic Planning Communities, which would each get $3 million next year under the President's budget request are in:

Anchorage, Alaska Las Vegas/North Las Vegas, Nevada
Birmingham, Alabama Little Rock/North Little Rock, Arkansas
Burlington, Vermont/Plattsburgh, New York New Orleans, Louisiana
Charleston/North Charleston, South Carolina New York City/Brooklyn, New York
Jackson, Mississippi Newark/Elizabeth, New Jersey
Kansas City, Missouri/Kansas City, Kansas Providence, Rhode Island
Louisville, Kentucky San Antonio, Texas
Tacoma/Lakewood, Washington

The remaining $20 million would fund strategic planning and technical assistance for Urban Zone applicants.


In addition to announcing the new Empowerment Zones, the Vice President today announced 20 additional communities have been designated as Rural Enterprise Communities, making them eligible for a share of $50 million in proposed federal grants over the next 10 years. The grants are expected to help the Rural Enterprise Communities create and retain 16,000 jobs and stimulate $500 million in additional private and public investment over 10 years.

The 20 new Rural Enterprise Communities selected for designation today will share $5 million in federal grants already approved for this year - $250,000 for each.

The Rural Enterprise Communities are in:

Ada, Oklahoma Juneau, Alaska
Hallandale, South Carolina Keshena, Wisconsin
Austin, Indiana Leoti, Kansas
Bowling Green, Kentucky Lewiston, Maine
Charleston, West Virginia Orange Cove, California
Colville, Washington Poplar, Montana
Deming, New Mexico Rutledge, Tennessee
Harrison, Michigan Uniontown, Pennsylvania
Immokalee, Florida Uvalde, Texas
Kaunakakai, Hawaii Window Rock, Arizona

USDA will seek $5 million for additional special grants next year for rural communities, known as Champion Communities, that applied for but did not get Empowerment Zone designation.


This year 279 communities and groups of adjacent communities competed for the Empowerment Zone designation -- 119 in urban areas and 160 in rural areas. In order to compete for Empowerment Zone status, communities must submit strategic revitalization plans that act as roadmaps for transforming troubled communities.

Zones were selected based on a scoring system that measured the quality of revitalization plans and private and public sector commitments made to implement the plans. Career civil servants made the selections.

Existing Urban Empowerment Zones are in: Atlanta, Cleveland, Chicago, Baltimore, Detroit, Los Angeles, New York City, and Philadelphia/Camden, NJ.

Existing Rural Empowerment Zones are in the Mississippi Delta, Kentucky Highlands and the Rio Grand Valley in Texas.


Each new Empowerment Zone designated today by Vice President Gore will benefit from new tax incentives already approved by Congress. Each Zone will be able to take advantage of these tax incentives:

  • BONDING AUTHORITY: Communities can Issue $130 million in tax-exempt bonds for Urban Empowerment Zones and $60 million in tax-exempt bonds for Rural Empowerment Zones over 10 years to provide reduced-cost financing for revitalization efforts.

  • MACHINERY DEDUCTION: Businesses in a Zone can take a federal income tax deduction of up to $37,500 of machinery and equipment in the year it is placed in service instead of recovering the cost over a period of years through depreciation.

  • BROWNFIELDS CLEANUP: Zones can offer tax incentives to promote the cleanup and redevelopment of contaminated and abandoned business and industrial sites, known as brownfields. A business in a Zone can deduct qualified environmental cleanup costs in the tax year the cost is paid or incurred.

  • WORK OPPORTUNITY TAX CREDIT: Businesses in a Zone can claim up to a $2,400 tax credit for hiring 18-24 year-old Zone residents and other hard-to-employ residents.

  • SCHOOL FUNDING: State and local governments can issue bonds that permit public schools in a Zone to raise funds for curriculum development or physical improvements. To be eligible, schools must have financial commitments from business partners.

Content Archived: January 20, 2009

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