Anaheim's 'Enterprise Zone' Tax Giveaway Creates a Whopping 180 New Jobs in its First Year!

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This past Friday was the one-year anniversary of Anacrime's official designation of an 'Enterprise Zone' (AEZ), a nearly citywide effort under the auspices of the the Anaheim Chamber of Commerce to implement and market a business-friendly city with tax breaks to corporations.

This ruse was given the green light during the very same notorious gathering on January 24, 2012 where the contentious $158 million dollar GardenWalk Hotel Project subsidy was granted in violation of the Ralph M. Brown Act, but little to no outcry greeted it after.

The AEZ billed itself as an engine to stimulate growth and new jobs within its boundaries. So how is this favored tool of neoliberal urbanism (aka Gustavo's much-maligned Brave New Urbanists) performing one year later?

A big bunch of nada.

Anaheim had been seeking to become part of the larger California Enterprise Zone program since September 2010. By that time a number of studies, including a 2009 report by the Public Policy Institute of California that concluded "the enterprise zone program...has failed to achieve its key goal: increasing jobs," were critical of its efficacy.

Any such doubts were readily jettisoned by its local boosters. "The goal of the Enterprise Zone is to create new jobs and increase employment within the city by offering tax credits," Planning Director Sheri Vander Dussen said at the onset of her January 2012 presentation to the council. All five members at the time were convinced of its supposed virtues, including Democrat Councilwoman Lorri Galloway, and voted accordingly to enter in an agreement with the Chamber to the tune of roughly $1.76 million dollars, with up to an additional $50,000 for processing related vouchers.

A map of Anaheim's 'Enterprise Zone'

The benefits touted before designation included up to $37,400 in tax credits for hires, sales and use tax credits for corporations that made machinery purchases up to $20 million and business expense deductions up to $20,000. "Chamber staff have already initiated efforts to develop AEZ marketing materials and programming," Anaheim Chamber of Commerce President/CEO Todd Ament chimed in a press release, "so that we can quickly initiate this critical effort to generate 20,000 Anaheim jobs in the next five years."

When asked by the Weekly as to how the AEZ was performing one year later, the City of Anaheim returned mostly vague statistics. "A total of 52 companies have participated in the program," Public Information Officer Ruth Ruiz relaid. "The businesses taking advantage of our program include manufacturers, medical offices/hospitals, delivery services, restaurant and retail operations."

The creation of new jobs and raising employment levels overall was a key part of the AEZ pitch. So far, the city has received nearly 1,800 vouchers as part of the program which translates into roughly 1,800 jobs. Only ten percent of those represent new jobs. For non-math majors, that's 180 positions that didn't exist before designation. If the AEZ were to perform on this front at the same pace over the next four years, it would net 9,000 jobs (900 new) and fall well short of Ament's stated goal.

The salary range given for the vouchers is between $8-$38 dollars per hour. When asked for more detailed information as to whether a majority of the new jobs were below a living wage, no clarification was given as of press time.

The AEZ encompasses a boundary zone that includes much of the city's industrial and commercial areas and 80% of all businesses operating in Anaheim. Is it attracting new companies and how much feeding is going on at the tax credit trough? "We do not have information on if the businesses are new or existing," Ruiz said, "or the amount of tax credits they are claiming."

The statistics should be readily available as under the terms of the contract, the Chamber is to "prepare and file annual reports" with the city that should include "the average hourly wage of the jobs created; and the number of businesses that have expanded or moved to Anaheim" as a result of the zone.

The five-year agreement can be revoked at anytime especially if the AEZ doesn't live up to its purported goals. The Enterprise Zone designation itself is set to last until 2027.

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Mitchell_Young topcommenter

I've thought about it, and I think I have the answer.

1) Separate Anaheim Hills from Anaheim. The extra wealth there will hinder this plan

2) Let the people of the new, poorer Anaheim apply for a bunch of microloans from Grameen Foundation, 'Give a Goat' or whatever. Maybe try to get the mayor an appearance on Oprah to promote these grants.

3) Armed with their microloan capital, everyone in Anaheim can buy carts for selling 'elotes', 'paletas'. You can mow each other's yards. That sort of thing. A 'vibrant' local economy.

4) You're gonna need some outside capital trickling in -- so I suggest lowering the drinking age to 18, (at least in practice, ie. requiring 'bouncers' in the city to look the other way at out of state 'ID's" ) , and then building a couple of bars to attract Chapman University students. You know, maybe one with a big sand volleyball court in the middle, another where a server will sneak up from behind you, open your mouth, and pour tequila and margarita mix down your throat while blowing on an ear splitting whistle. Good Times!

5) To compete the effect, put a fence around 'flatland Anaheim', have a main entrance/exit on, say, Chapman. Gates for both cars and pedestrians. There might be a long wait to get on on Saturday or Sunday mornings, but that's just an opportunity for more employment -- itinerant venders selling plus toys, hats, and  kids selling chicle. 

You're Welcome!.



Its also no coincidence that the "Resort" are included in the AEZ is home to some of the region's largest employers, biggest county revenue producers and heaviest community investors. With the rising costs of doing business in CA, from insurance costs to increased CA state taxes, how much longer can many of these companies compete? The EZ Program is the only state-wide economic development tool that helps those companies who are still re-investing. At the end of the day, its a small part of a massive budget. Are you telling me that you would rather just give that money back to the state so they can NOT spend it on education.. its called a black hole.


Timely, Gabo.  As I mentioned to you today, two of the speeches at today's "State of the City" luncheon were about how great and important the EZ's have been for the city, and how hard the City is going to fight to keep  the state from terminating them.  That was the entirety of the Chamber of Commerce head's speech (forget his name, wasn't Ament, a 3-syllable latin name)  and a big chunk near the beginning of the Mayor's speech.  Well, Mayor Tait can't be right about everything!

Mitchell_Young topcommenter

So, what your saying is, you can't even bribe businesses to hire unskilled immigrants (or their even more unskilled) offspring.

gabrielsanroman topcommenter

@chezvern The Mayor spoke about it explicitly for about a paragraph's worth of his speech where he said the city would work vigorously to keep the AEZ in place. One year later, I find no compelling reason for such an effort.

gabrielsanroman topcommenter

@jasongarneryoung Gov. Brown is right-headed to target the state program. It's a failure in terms of what it proclaims to do. Plain and simple. It's no coincidence here that the Resort area is a key pink commercial zone in the AEZ map while a large swath of the distressed west side of Anaheim is assed out!


@gabrielsanroman @chezvern Heh, just talked to him, he's not exactly an EZ enthusiast.  But from his point of view as Mayor, he says "If other cities have them, we have to too."

gabrielsanroman topcommenter

@chezvern I don't know if what you relay from the Mayor is particularly useful for him. The question isn't about other cities having EZs, but if the AEZ 'works' for Anaheim. It doesn't. The experience and studies of EZ's in other cities should have actually given pause to the five council members who voted into this contract last year...well, in a righ-side-up world at least!

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