HomeMy WebLinkAboutR-2001-130 Federal Empowerment Zone (Yakima Empowerment Zone)RESOLUTION NO. R-2001-130
A RESOLUTION authorizing the City Manager to execute and submit an application for
designation as a federal Empowerment Zone and Renewal Community to the
U.S. Department of Housing and Urban Development (HUD).
WHEREAS, the City of Yakima is an urban entitlement community receiving Community
Development Grant and HOME funds from the U.S. Department of Housing and Urban
Development (HUD); and
WHEREAS, the city has competed for and been awarded Economic Development Initiative
grant and Section 108 loan funds from HUD; and
WHEREAS, economic development is a priority for the City of Yakima, and the City
intends to approach economic development on an inclusive, comprehensive basis which involves
public, private and community-based efforts to achieve new investment and redevelopment in the
City; and
WHEREAS, the City of Yakima meets the eligibility requirements of the federal Urban
Empowerment Zone program ; and
WHEREAS, the utilization of federal tax credits available to empowerment zone businesses
can have a significant positive impact on the city's economic development efforts; and
WHEREAS, the City of Yakima has been designated as a Community Empowerment Zone
by the State of Washington; and
WHEREAS, the City of Yakima has been designated as an economically distressed area;
now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager is hereby authorized and directed to execute and submit an application for
designation as a federal Empowerment Zone by HUD, including all understandings and assurances
contained therein, for designation as a federal Empowerment Zone from HUD. The City Manager
is hereby designated as the official representative of the City to act in connection with that
application for designation and is authorized to take such additional actions as may be necessary and
prudent to complete the application process.
ADOPTED BY THE CITY COUNCIL this 18th day of August, 2001.
ATTEST:
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Created: September 13, 2001
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.:
For Meeting of: September 18, 2001
ITEM TITLE: Consideration of a resolution authorizing the City Manager to
execute and submit an application for designation as a federal
Empowerment Zone and related Renewal Community by the U. S.
Department of Housing and Urban Development.
SUBMITTED BY: William Cook, Director of Community and Economic Development
CONTACT PERSON/TELEPHONE: Bill Cook, 575-6113
SUMMARY EXPLANATION:
The proposed Yakima Empowerment Zone (YEZ) consists of census tracts 01, 02, 03,
and 15, and is modeled after the City's current state designated Community
Empowerment Zone. In addition to the aforementioned census tracts, the YEZ also
contains developable sites in the vicinity of the Yakima Airport and recent Congdon
annexation area, and off of Highway 24 between Yakima and Moxee. The goal of the
YEZ is to improve the quality of life for Yakima residents by improving the community's
economic competitiveness in retaining and recruiting family -wage jobs, and to sustain
the health of our local small businesses.
This is a nationwide competition for seven (7) designated sites. Existing federal
Enterprise Communities will receive preference in the selection. The designation
does not include any grant or loan funding to the city for implementation.
Continued on next page
Resolution X Ordinance Contract Other Specify
Funding Source: U. S. Department of Housing and Urban Development
APPROVAL FOR SUBMITTAL:
City Manager
STAFF RECOMMENDATION: Staff recommends approval of the resolution.
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2001-130
The federal designation is similar to the state designation in that the designation benefits consist of
tax incentives for businesses of all types and sizes. Tax credits available to businesses in federally
designated EZ's, include:
• Empowerment Zone Employment Credit: Provides a credit against federal taxes up to $3,000
for businesses for each year of EZ designation for every existing employee and new hire who
lives and works in the EZ.
• Work Opportunity Tax Credit: Provides a credit against federal taxes for businesses for each
new hire from groups that have high unemployment rates or other special employment needs,
including: EZ youth residents aged 18-24, and 16 to 17 year old summer hires who are EZ
residents.
• Welfare -to -Work Tax Credit; Provides a 2 -year credit against federal taxes for businesses that
hire long-term family -assistance recipients. The maximum credit if $3,500 per new hire in the
first year and $5,000 per employee in the second year.
• Increased Section 179 Deduction: Allows businesses to deduct (up to a maximum of $35,000)
all or part of the cost of certain qualifying property in the year it is placed in service.
• Environmental Cleanup Cost Deduction: Provides businesses with an incentive to clean up
certain sites that contaminated, or perceived to be contaminated with hazardous substances. A
business can elect to deduct qualified environmental cleanup costs in the tax year the cost is paid
or incurred.
• Enterprise Zone Facility Bonds: Allows state or local governments to issue tax-exempt
bonds to make loans at lower interest rates to EZ businesses to finance Qualified zone Property.
• Qualified Zone Academy Bonds: Allows state or local governments to issue bonds at 0
percent interest cost to them to finance public school programs with private business
partnerships. Private businesses must contribute money, equipment, or services equal to 10
percent of bond proceeds.
• New Markets Tax Credit: Allows equity investors in qualified Community Development
Entities to obtain a tax credit against federal taxes of 5-6 percent of the amount invested for
each of the years the investment is held, for up to 7 years of the credit period.
Rather than create another comprehensive planning process that would more than likely identify
similar goals and issues, the YEZ application is an acknowledgement and compilation of several
community initiatives that either recently taken place or are in process, including:
• For A Better Tomorrow - Upper Valley Visioning Project
• Yakima's Promise
• Northwest Area Foundation Community Meetings
• Breaking the Cycle of Poverty - Census Tract 15 Service Providers Committee
• Yakima Gateways Committee
• Tri -County Workforce Development Council Strategic Plan
By incorporating the efforts of these and other organizations, the YEZ designation will provide a
priority status for federal funding for these and other organizations working to improve our
neighborhoods.
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