State approves Enterprise Zone for Lodi

Economically battered San Joaquin County, with its unemployment rate hovering around 15 percent, got some good news earlier this week when the state of California officially approved the expanded boundaries for an Enterprise Zone. The expanded region covers nearly all of Lodi, and gives most industrial and commercial businesses eligibility for deductions and tax credits.

The Enterprise Zone offers many perks to spur growth and give residents jobs. Local businesses can earn more than $37,000 in state tax credits for each local employee they hire.

Unused tax credits can carry over into future years as well.

"The Enterprise Zone is great news for people of Lodi," city spokesman Jeff Hood said. "Most residents live in the targeted employment area for businesses. It should be a great incentive to hire people from the Lodi region and it should be great for local economy."

The expanded San Joaquin County Enterprise Zone is a 15-year designation. The Stockton/San Joaquin County Enterprise Zone expired June 21, 2008. The expanded Enterprise Zone includes Stockton, most of Tracy, Lathrop, Manteca, Lodi and other regions in San Joaquin County.

Cindy Schock, the human resources and payroll director for Scientific Specialties in Lodi, said the Enterprise Zone is wonderful for small business owners.

When the company operated under the expired Enterprise Zone, eight employees qualified for tax credits for the business. Now the company has seven more employees who qualify them for tax credits because they reside in the expanded zone.

"It's a huge tax credit for Scientific Specialties," she said.

Ken Hovatter, owner of Scientific Specialties, said the Enterprise Zone will enable him to hire more workers.

Imperial Valley has had an Enterprise Zone designation of its own since March 2006. Imperial Valley Enterprise Zone manager Diane Cason said it has been a boon for the local economy.

"We have seen increased hiring from the tax credit, and businesses are saying they are able to pay better salaries and increase pay because they can recapture money," she said.

Cason said new businesses, such as retail, renewable energy producers and manufacturers have come into Imperial Valley in part because of the benefits provided by the Enterprise Zone.

"It's more attractive to businesses to locate because of tax credits," she said. "It's beneficial to community."

San Joaquin County's zone is one of the biggest in California and includes more than 55 square miles of commercial and industrial property. All the industrial parcels in the city and most of commercial and retail locations fall into the Enterprise Zone. It was designed to spur growth and give business and industry incentives for entrepreneurship.

In total, San Joaquin County's Enterprise Zone covers 656 square miles.

The state also approved the Targeted Employment Area, which enables local businesses to earn tax credits by hiring workers from specific areas within Lodi.

In 1984, California initiated the Enterprise Zone program to encourage business investment in depressed areas and create job opportunities for residents. There are 42 Enterprise Zones in the state.

For anyone who wants to learn more about the program and how to benefit from it, there will be a rollout meeting on Nov. 17 at 5:30 p.m. at Oakridge Winery. The meeting will discuss the new maps and expanded commercial areas.

Contact reporter Jordan Guinn at jordang@lodinews.com.

Tax credits and benefits at a glance

Some of the tax credits and benefits for businesses inside the Enterprise Zone include:
— Unused tax credits can be applied to future tax years.
— Sales tax credits on purchases of up to $20 million per year of qualified parts and machinery.
— Upfront expensing of certain depreciable property.
— Up to $37,440 in state tax credits for each qualified employee hired.
— Businesses can earn preference points on state contracts.
News-Sentinel staff

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