HUD Archives: News Releases
HUD Announces Community Revitalization Initiative to Stimulate Economic Development and Job Growth -- Names Tucson an Empowerment Zone
TUCSON, AZ - Housing and Urban Development Assistant Secretary Roy Bernardi today announced Tucson is the nation's newest Empowerment Zone, eligible to share in an estimated $17 billion in tax incentives to stimulate job growth, promote economic development and create affordable housing opportunities. Empowerment Zones (EZs) encourage public-private partnership to generate economic development in some of the nation's most distressed urban communities.
Tucson will receive regulatory relief and tax breaks to help local businesses provide more jobs and promote community revitalization. HUD recently announced seven other Empowerment Zones in Pulaski County, Arkansas; Fresno, California; Jacksonville, Florida; Syracuse, New York; Yonkers, New York; Oklahoma City; and, San Antonio.
"These tax incentives couldn't come at a better time for the people of Tucson," said Bernardi today during a news conference at El Presidio Park. "This critical partnership between the public and private sectors will give local businesses an economic boost to help drive revitalization, provide jobs and ultimately build a foundation for a stronger Tucson."
Authorized by the 2000 Community Renewal Tax Relief Act, the new Empowerment Zones will use the power of public and private partnerships to build a framework of economic revitalization in areas that experience high unemployment and shortages of affordable housing.
"This is the kind of program the City of Tucson and the rest of the country needs. It gives people a hand, not a handout. This Empowerment Zone will provide incentives to create jobs and stimulate sustainable economic growth," said Rep. Jim Kolbe. "This program will help local businesses put people to work, and in so doing revitalize the downtown area and promote opportunity throughout the entire region. This is an intelligent, common sense approach to improving our economy."
"This announcement recognizes Tucson's emergence as an important center for high technology and aerospace manufacturing," said Arizona Governor Jane Dee Hull. "With the incentives and expertise now available, we can expect more business, more jobs and a better future for Tucson and all of southern Arizona."
Included in the $17 billion tax relief package, an estimated $6 billion in incentives are exclusively available for Empowerment Zones across the country. As distressed communities, Empowerment Zones will also be eligible to share in an additional $11 billion in Low-Income Housing and New Market Tax Credits.
Businesses located within Tucson's Empowerment Zone can take advantage of wage credits, tax deductions, bond financing and capital gains to stimulate economic development and job growth. Each incentive is tailored to meet the particular needs of a business and offers a significant inducement for companies to locate and hire additional workers.
More than 15 percent of the residents in Tucson's Empowerment Zone are unemployed - nearly half of the area's residents live in poverty. A substantial portion of the population within this area is Hispanic and Native American faced with the challenges of language isolation, low high school achievement, few homeownership opportunities and a lack of decent and affordable housing.
Tucson's new Empowerment Zone consists of 13 census tracks and three sites earmarked for future development. In addition, city officials have commitments from defense- and technology-related industries to provide Zone residents with entry- to mid-level jobs as well as comprehensive employment training. The following tax incentives are available to any business located within Tucson's new Empowerment Zone:
In addition to the wage credits, there are significant tax incentives available in support of qualified zone property and schools with the EZs.
Businesses located within EZs can postpone or only partially recognize the gain on the sale of certain assets, including stock and partnership interests. This benefit significantly reduces the capital gains tax liability on businesses located with these designated areas.
In addition to the incentives described above, HUD will provide technical assistance to these communities to ensure that businesses are fully aware of the many opportunities available to them. To make certain the Empowerment Zones are successful in the initial stages of their designations, HUD will host an Implementation Conference where the newly designated EZs will meet to hear from experts in the fields of business, taxes and economic development. The conference will also provide presentations from representatives from previously designated EZs recognized for their successes in forming public-private partnerships.
Like all distressed communities, Empowerment Zones will also be able to take advantage of the New Markets Tax Credits that provide investors with a credit against their federal taxes of 5 to 6 percent of the amount invested in a distressed area. Also available to Empowerment Zones is the Low-Income Housing Tax Credit providing credit against Federal taxes for owners of newly constructed or renovated rental housing.
Empowerment Zone History
The first six of the current 30 Urban Empowerment Zones were designated in 1994. They were created to establish an initiative that would rebuild communities in America's poverty-stricken areas through incentives that would entice businesses back to the inner cities. In 1998, the Initiative was expanded through a second round, incorporating an additional 15 zones and changing the designation of two Supplemental Empowerment Zones to the full status of EZs.
Successful Empowerment Zone applicants had to satisfy a two-part selection process that weighed certain population and poverty criteria as well as the quality of the community's strategic plan.
|Content Archived: April 9, 2010|