District City Council Chairman Arrington Dixon last week introduced legislation to pave the way for an experimental urban enterprise zone, a concept pursued by Reps. Jack Kemp (R-N.Y.) and Robert Garcia (D-N.Y.) to help stimulate economic development of troubled city areas.
The enterprise zone, an idea the Reagan administration endorses to revive the nation's distressed cities, provides tax breaks for any firm setting up business in the zone. "This is a very strong tax bill aimed at inner-city small business, or women who must now pay a tremendous tax on their start-up capital, as well as the reward they seek for themselves and their family once they make it," Kemp has said.
Kemp and Garcia still are ironing out the rough spots of the legislation and plan to introduce a revised version March 25, said a spokesman for Garcia's office.
But even before that bill has been printed, Dixon introduced legislation to make it easier for the District to receive federal funds from the program -- if it is passed -- for developing blighted areas by waiving some regulations, and zoning laws, building codes, health and safety acts, rent control laws and some taxes.
The bill "would put the District in a position to act quickly when the federal government is ready so that we may have the opportunity to be in the vanguard of the new urban policy," Dixon said.
Since the civil disturbances in the 1960s, the District has been unsuccessful in rejuvenating burned-out and abandoned business areas, particularly the New York Avenue corridor. Creation of the enterprise zone presumably would help in rebuilding what other economic development efforts have not.
Some critics of enterprise zones, however, say it will take a long time -- possibly as long as 10 years -- before their zones' success can be determined. The District bill would create a zone that would last for 10 years, during which firms locating there would be exempt from a number of regulations.
The zone would be established on an experimental basis in a small area adjacent to Maryland so that the zone could reap some spillover growth from businesses moving or expanding in that state. The bill calls on the mayor to cooperate with Maryland officials to develop proposals for joint-enterprise zones on the adjoining property.
"The most critical issue facing our city today is the creation of jobs for the unemployed," Dixon said. "What we need in the District is real economic growth coming from innovative business enterprises."
The bill would waive D.C. real property, corporate or investment tax laws for up to 10 years. But wouldn't the city lose valuable tax revenues? "The view is the benefit in terms of job opportunities," and development would "offset any loss in tax revenues," Dixon said.
Dixon said he couldn't estimate how many jobs the enterprise zone would gain for the city or the amount of taxes that would be lost.
Any enterprise zone would be within a small area with more than 4,000 residents in "the forgotten areas of the city," a spokeswoman for Dixon said. The area also would have to convenient to mass transportation. The city would transfer property to a community development corporation or an Advisory Neighborhood Commission that would become an enterprise corporation and plan the development of the zone, the spokeswoman said.
What kinds of business is Dixon looking for? "Some small specialty shops, laundries, printing, light industry," Dixon said. He even envisions some businesses connected with the cable television industry there. The spokeswoman said a small industrial park of high-technology center could locate there.
But Dixon admits that setting up such a zone would take a lot of time. Some critics say the zones would draw businesses from other areas of the city to benefit from tax and other breaks.
"Many aspects of this will fly in the face of some of the concepts we have held dear," Dixon said. "However, the approaches which we have tried in the past have not worked in the way we had hoped. While we are not abandoning our previous commitments and policies, it is time to experiment at least with a new approach.