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Community and Economic Development

For Immediate Release
Friday, May 21, 2004

Contact: Eric Symons, City of San Diego
(619) 533-5318 - office
(619) 890-2784 - mobile
Paola Hernández, National City
(619) 336-4526 - office
(619) 962-0303 - mobile

San Diego Enterprise Zone Expanded to National City
Regional Collaboration Prompts New Investment and Job Creation

SAN DIEGO - The City of San Diego once again showed its commitment to regional collaboration by coordinating the expansion of its state-designed South Bay Enterprise Zone to include part of National City. Through this collaboration, businesses located in certain areas of National City, including Port tideland property on San Diego Bay, have been offered the largest array of business incentives available in the region. The collaboration was announced today as part of an event at the Knight & Carver YachtCenter by a partnership of the cities of San Diego and National City, the Port of San Diego and the state's Enterprise Zone Program.

This move marks the second time the City of San Diego agreed to work with the state to expand its Zone to another municipality, the first being in 2000 when parts of Chula Vista were added to the zone boundaries. The expanded South Bay Enterprise Zone consists of 7,094 acres of prime commercial and industrial land by combining San Diego's existing 6,563-acre zone in San Ysidro and Otay Mesa, 447 acres in Chula Vista and 84 acres in National City.

"San Diego's economy is regional in nature, so by collaborating with other local cities and the state to expand business incentives, we are increasing San Diego's ability to compete with other regions, create new jobs and increase investment in our county," said San Diego Mayor Dick Murphy. "Our Enterprise Zones offer tremendous business incentives and should help National City assist its employers and attract new ones."

Under the Enterprise Zone Program, existing companies within the zone or new companies that move into the zone can take advantage of several significant business-related incentives including tax credits for hiring qualified employees, credits for sales or use tax paid on certain equipment, business expense deductions for personal property and preference on state contracts. Additional incentives are available to banks that lend to companies located in the zone and to qualified employees who work within the zone.

"We're very pleased that the Enterprise Zone expansion will allow National City to significantly assist our existing major employers as well as help us attract new businesses to our bayfront," said National City Mayor Nick Inzunza. "Several key companies are ready to increase investment in their businesses and create new jobs. We congratulate the City of San Diego and the state of California for this collaboration to strengthen our regional economy."

Large firms already located in the South Bay Enterprise Zone include Goodrich, Delimex, Duke Energy, Honeywell, Howard Leight Industries, Matsushita/Panasonic, Martin Furniture, Raytheon, Sanyo, Smith-Corona Corporation and Sony. With the expansion to National City, several other companies will be taking advantage of the incentives, including yacht manufacturer Knight & Carver, car importer PASHA and custom signage and sales office interior designer Motivational Systems, Inc. The three companies will be investing approximately $6 million into their businesses and creating 90 new jobs, combined. Knight & Carver will immediately take advantage of the program to improve its facilities and hire new employees.

"The expansion of San Diego's Enterprise Zone to National City is key to our decision to expand our business by investing more than $2.5 million into new equipment and facilities and by creating 50 new jobs," said Sam Brown, President and CEO of Knight & Carver, a yacht construction and repair business located on San Diego Bay. "Our business is thriving here and these new incentives will help us improve our facilities and remain a leader in our industry."

The City of San Diego's Enterprise Zone program has made a significant impact on the local economy. Since its inception in 1986, the San Diego Enterprise Zone program has assisted in retaining and creating 12,000 area jobs, increasing private investment by more than $500 million, and providing permit expediting, financial and technical assistance to thousands of local companies.

The 2000 expansion of the Enterprise Zone to Chula Vista has already proven to be instrumental in helping to keep aerospace giant Goodrich from cutting local jobs. Enterprise Zone benefits contributed to the company's decision to invest $50 million in its Chula Vista campus and its recent success in winning a $4 billion contract to provide engine parts for Boeing's new 7E7 jetliner.

As part of the agreement to expand the zone, National City and the Port of San Diego will provide funding to the City of San Diego to support the cost of managing the program and to enhance a marketing campaign for the zone.

"We are very pleased to see this regional business incentive expanded," said Jess Van Deventer, Port Commissioner for the Port of San Diego. "The expanded zone will enhance our efforts to continue the revitalization of the South San Diego Bay waterfront."

The 39 Enterprise Zones in California stimulate business investments in areas where investment has lagged. The City of San Diego's Enterprise Zone Program began in 1986 and features the Metropolitan Enterprise Zone near downtown and the San Ysidro/Otay Mesa Zone, which has been expanded to create the South Bay Enterprise Zone. The City of San Diego also maintains a specialized enterprise zone-like designation at the former Naval Training Center. The Local Military Base Recovery Areas (LAMBRA) at the former base offers incentives similar to enterprise zones to attract reinvestment and re-employ workers impacted by base closures and realignments.

For more information about the region's Enterprise Zones and other business assistance programs, contact the City of San Diego's Community and Economic Development Department at (619) 533-4233 or visit www.sandiego.gov/cpci.

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