Community Development: Progress on Economic Development Activities Varies
Among the Empowerment Zones (Letter Report, 11/25/98, GAO/RCED-99-29).
In 1993, Congress authorized the 10-year Empowerment Zone and Enterprise
Community Program to help distressed communities develop comprehensive
approaches for dealing with their social and economic problems. In
December 1994, more than 100 communities were designated as federal
empowerment zones and enterprise communities. These communities will
receive about $1 billion in federal grants, as well as tax benefits for
businesses in the communities. Last year, Congress authorized the
designation of 22 additional empowerment zones, two of which--Los
Angeles and Cleveland--the administration has already designated. This
report (1) examines the progress made by federal empowerment zones in
implementing the program, (2) describes the steps taken by two
responsible federal agencies--the Department of Housing and Urban
Development and the Department of Agriculture--to monitor and evaluate
the existing zones' progress, and (3) describes the status of steps to
designate the second group of empowerment zones. GAO focuses on six
zones--three urban (Atlanta, Baltimore, and New York City) and three
rural (the Rio Grande Valley, the Kentucky Highlands, and the
Mississippi Mid-Delta), all of which were designated in 1994.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-99-29
TITLE: Community Development: Progress on Economic Development
Activities Varies Among the Empowerment Zones
DATE: 11/25/98
SUBJECT: State-administered programs
Community development programs
Urban economic development
Program evaluation
Economically depressed areas
Federal/state relations
Block grants
Rural economic development
Business assistance
IDENTIFIER: HUD Empowerment Zones and Enterprise Communities Program
USDA Rural Empowerment Zones and Enterprise Communities
Program
Atlanta (GA)
Baltimore (MD)
New York (NY)
Rio Grande Valley (TX)
Social Services Block Grant
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Cover
================================================================ COVER
Report to the Subcommittee on Human Resources, Committee on
Government Reform and Oversight, House of Representatives
November 1998
COMMUNITY DEVELOPMENT - PROGRESS
ON ECONOMIC DEVELOPMENT ACTIVITIES
VARIES AMONG THE EMPOWERMENT ZONES
GAO/RCED-99-29
Economic Development in Empowerment Zones
(385732)
Abbreviations
=============================================================== ABBREV
EZ - empowerment zone
HUD - Department of Housing and Urban Development
SSBG - Social Services Block Grant
USDA - U.S. Department of Agriculture
Letter
=============================================================== LETTER
B-281310
November 25, 1998
The Honorable Christopher Shays
Chairman, Subcommittee on
Human Resources
Committee on Government Reform
and Oversight
House of Representatives
Dear Mr. Chairman:
In August 1993, the Congress authorized the 10-year Empowerment Zone
and Enterprise Community program to help selected distressed
communities develop comprehensive approaches for dealing with their
social and economic problems. In December 1994, over 100 communities
were designated as federal empowerment zones and enterprise
communities. These communities will receive about $1 billion in
federal grants, as well as tax benefits for certain businesses
located in the communities.\1 In 1997, the Congress authorized the
designation of 22 additional empowerment zones, 2 of which--Los
Angeles and Cleveland--the administration has already designated. In
addition, Members of the Congress have introduced legislative
proposals to further extend this program or provide for similar
programs.\2
To learn how the program is working, you asked us to (1) examine the
progress made by the federal empowerment zones in implementing the
program, (2) describe the steps taken by the two responsible federal
agencies--the Department of Housing and Urban Development (HUD) and
the U.S. Department of Agriculture (USDA)--to monitor and evaluate
the existing zones' progress, and (3) describe the status of steps to
designate the second group of empowerment zones. This report focuses
on six zones that we visited--three urban (Atlanta, Baltimore, and
New York City) and three rural (the Rio Grande Valley, the Kentucky
Highlands, and the Mississippi Mid-Delta) empowerment zones, all of
which were designated in 1994. As agreed with your office, the
report focuses on the empowerment zones' progress in implementing
economic development activities.
--------------------
\1 Empowerment zones receive much larger grants and more tax
incentives than enterprise communities and are the subject of this
report.
\2 For example, see our report and testimonies on the American
Community Renewal Act of 1998--GAO/RCED-98-158R and
GAO/T-RCED-98-196, issued in May 1998, and GAO/T-RCED-98-263, issued
in Aug. 1998.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
The six empowerment zones that we visited have reported on their
implementation of a variety of planned activities in the areas of
economic development, housing, public safety, health care, public
transportation, education, and family self-sufficiency. While the
mix of activities varies among the zones, economic development
activities generally account for the largest portion of their planned
expenditures. The six zones reported that they are making progress
in implementing their economic development activities (creating jobs,
training workers, and providing access to capital); however, the
extent of their progress varies. Four of the zones--Baltimore, the
Kentucky Highlands, New York, and the Rio Grande Valley--have
initiated or completed many of their economic development activities.
The two remaining zones--Atlanta and the Mississippi Mid-Delta--have
established organizations, called one-stop capital shops, that
provide comprehensive technical and financial assistance in a single
location to small businesses. They have also provided several loans
and one grant to businesses but have made little progress on other
economic development activities. Officials involved in implementing
the empowerment zone program told us that two factors facilitated
their progress--experience in implementing activities and agreement
among stakeholders.
Both HUD and USDA have sponsored studies of the empowerment zone
program to help them monitor implementation efforts. In addition,
both agencies use progress reports from the zones, together with
visits by their own field office staff, to monitor the performance of
the zones and evaluate their fitness to continue in the program. HUD
required reports from the urban zones in the summers of 1996 and
1997, while USDA has generally required semiannual reports from the
rural zones. Both agencies perform field reviews and site visits to
check the accuracy of the progress reports. While field staff from
both agencies said they provide assistance upon request, the extent
of their involvement in monitoring and evaluation has varied.
Specifically, HUD field staff told us they have not had a routine
role in monitoring and evaluating the program. However, under HUD's
management reform initiative, which is now being implemented, the
field offices will have a greater role in assisting the zones and
monitoring their activities. USDA involved its field office
representatives in monitoring and evaluating the program by requiring
the rural zones to submit weekly progress reports to field office
representatives for their review.
Earlier this year, the Secretaries of Housing and Agriculture invited
communities to apply for the 20 remaining empowerment zone
designations. These zones will have fewer tax benefits and smaller
grants than the original zones. HUD and USDA subsequently issued
regulations covering the program, provided guidance to potential
applicants, and conducted informational workshops across the country.
Both agencies are currently evaluating communities' applications for
designation. Program officials from both agencies told us that they
expect the designations to be made no later than January 1, 1999, the
statutory deadline.
BACKGROUND
------------------------------------------------------------ Letter :2
The Congress established the Empowerment Zone (EZ) and Enterprise
Community program in the Omnibus Budget Reconciliation Act of 1993
(P.L. 103-66, Aug. 10, 1993). The act also amended title XX of the
Social Security Act to authorize the special use of Social Services
Block Grant (SSBG) funds for the program.\3 In addition, the act
allows businesses located within the EZs to (1) receive tax credits
on the wages paid to employees who live and work in the zones; (2)
deduct higher levels of depreciation expenses than other businesses;
and (3) borrow, at low interest rates, funds raised from the sale of
tax-exempt bonds issued by the state or local government to be used
for facilities and/or land. Finally, the act specifies that the
Secretaries of Housing and Urban Development and Agriculture will
designate the communities that are to participate in the program and
have the authority to revoke a designation if the boundaries of an
empowerment zone or enterprise community are modified, if a
designated area is not complying with the program's requirements, or
if a designated area is not making significant progress in
implementing the program.
Communities that participate in the 10-year EZ program had to (1)
meet specific criteria for characteristics such as geographic size
and poverty rate and (2) prepare a strategic plan for implementing
the program's four key principles--creating economic opportunity,
creating sustainable community development, building broad
participation among community-based partners, and describing a
strategic vision for change in the community.\4 Each EZ must spend
its SSBG funds in accordance with its strategic plan, which includes
goals and measures, called performance benchmarks. The progress of
each EZ in achieving its goals is to be based on the extent to which
it accomplishes its performance benchmarks, not on how much federal
money it spends. The benchmarks are set forth in a benchmark
document that describes the activities that the EZ plans to implement
and includes time lines for their implementation. The document can
be modified to accommodate changes in the EZ's needs or scheduling
problems. The benchmark document is to serve the EZ, as well as HUD
or USDA, as an important management tool and constitutes the primary
basis for evaluating the progress being made.
HUD and USDA have each issued regulations and guidance for
implementing the EZ program. In addition, they have commissioned
studies to help them evaluate the program and have required the EZs
to report on their progress in implementation. HUD requires the
urban EZs to submit periodic progress reports to its EZ program
office. The program office sends these reports to the HUD field
offices for assessment. These reports were submitted in the summer
of 1996 and the summer of 1997, and the next reports are due by
December 31, 1998, according to the coordinator for the EZ program.\5
USDA requires the rural EZs to submit weekly progress reports to the
field offices and semiannual progress reports to the headquarters
Office of Community Development, which is responsible for the rural
program's overall implementation.\6
Under the Taxpayer Relief Act of 1997 (P.L. 105-34), the Congress
authorized a second round of EZs. This act provides for two urban
EZs that are to operate under the same rules as the EZs authorized in
1993. In January 1998, the administration selected Los Angeles and
Cleveland as the two new EZs.\7 The act also provides for 20 new
EZs--15 in urban areas and 5 in rural areas--that are to operate
under slightly revised rules set forth in the act. Communities
across the nation--including the existing enterprise communities and
tribal areas--are eligible to apply for the new EZ designations.\8 In
October 1998, the Congress provided $55 million for fiscal year 1999
for the 20 new EZs--$45 million for the 15 new urban EZs and $10
million for the 5 new rural EZs.\9
--------------------
\3 Historically, SSBG funds could be used only for social service
activities, such as assisting and feeding children. However, under
the EZ program, the funds can also be used for economic and social
activities, such as purchasing or improving land and facilities or
providing cash payments to individuals for medical care. The urban
EZs received $100 million each in SSBG funds, the rural EZs received
$40 million each, and the enterprise communities (both urban and
rural) received approximately $3 million each. These funds remain in
the federal government until needed by the EZs.
\4 On Dec. 21, 1994, the Secretaries of Housing and Urban
Development and Agriculture designated nine EZs--six urban and three
rural--that would participate in this program.
\5 For more information on the initial implementation of this program
in urban areas, see our earlier report entitled Community
Development: Status of Urban Empowerment Zones (GAO/RCED-97-21, Dec.
20, 1996) and our testimony entitled Community Development: The
Federal Empowerment Zone and Enterprise Community Program
(GAO/T-RCED-98-27, Oct. 28, 1997).
\6 According to USDA officials, the frequency of their evaluation has
increased in response to a GAO report that recommended improvements
in obtaining information for assessing the progress of EZs. (See
Rural Development: New Approach to Empowering Communities Needs
Refinement (GAO/RCED-97-75, Mar. 31, 1997).)
\7 As specified in the Taxpayer Relief Act, the effective date for
these two EZs is Jan. 1, 2000.
\8 The Omnibus Budget Reconciliation Act of 1993 did not allow
communities from tribal areas to participate in the original program.
\9 P.L. 105-277 (Oct. 21, 1998). For more details see the
Conference Report on H.R. 4328, Making Omnibus Consolidated and
Emergency Supplemental Appropriations for Fiscal Year 1999, House
Report 825 (Oct. 19, 1998). In this report, the Congress also
authorized USDA to designate 20 new enterprise communities in rural
areas and provided $5 million for them.
PROGRESS VARIES IN IMPLEMENTING
THE EMPOWERMENT ZONE PROGRAM
------------------------------------------------------------ Letter :3
The six EZs that we visited--Atlanta, Baltimore, the Kentucky
Highlands, the Mississippi Mid-Delta, New York City, and the Rio
Grande Valley--have reported on their progress in implementing a
variety of activities involving economic development, housing, public
safety, health care, public transportation, education, and family
self-sufficiency. For five of the six EZs, economic development
activities (creating jobs, training workers, and providing access to
capital) accounted for a larger portion of the planned first-phase
expenditures than other activities. All six EZs reported that they
are making progress in implementing their economic development
activities; however, the extent of their progress varies. Generally,
progress was greater in EZs where stakeholders had experience in
implementation and could agree on their roles and responsibilities.
PLANNED ACTIVITIES VARY
AMONG EMPOWERMENT ZONES
---------------------------------------------------------- Letter :3.1
Each of the six EZs has reported to either HUD or USDA on its
progress in implementing the first phase of its planned activities.
The reports prepared by the EZs that we visited often emphasized
economic development activities (creating jobs and training workers)
but usually included activities in other areas, such as housing and
public safety. For example, as table 1 shows, the activities in the
New York and Kentucky Highlands EZs were classified almost
exclusively as related to economic development, while those in the
other EZs were classified as both related and not related to economic
development. Whereas the New York and Kentucky Highlands EZs focused
on creating jobs, developing businesses, training workers, and
providing access to capital, the Atlanta, Baltimore, and Rio Grande
Valley EZs included activities that provided health care, housing,
public transportation, education, family self-sufficiency services,
and services for the elderly. The Mississippi Mid-Delta EZ included
activities such as community beautification, housing, health care,
public safety, and infrastructure improvement; however, almost all of
its initial SSBG allocation supported economic development
activities. (See apps. I through VI for details on each EZ's
activities as reported in 1997).
Table 1
Activities Planned in Six EZs
Activities Activities
related to not related Total
economic to economic planned
EZ development development activities
---------------------------- ------------ ------------ ------------
Atlanta\a 23 104
Baltimore 19 27
New York 38 2
Kentucky Highlands 20 8
Mississippi Mid-Delta 8 13
Rio Grande Valley 10 8
======================================================================
Total 118 162
----------------------------------------------------------------------
\a A March 1998 status report provided by Atlanta EZ officials
included 21 activities, of which 7 were related to economic
development and 14 were not.
Source: EZs' progress reports to HUD and USDA from July through
Sept. 1997.
Activities classified as related to economic development also
generally accounted for a larger portion of the EZs' reported SSBG
allocations than other activities. As table 2 shows, the EZs
allocated from 31 to 97 percent of their grant funds for economic
development activities.
Table 2
Allocations of SSBG Funds Reported by
Six EZs
(Dollars in millions)
SSBG funds Percentage
allocated of funds
for economic Total allocated to
development SSBG funds economic
EZ activities allocated\a development
---------------------------- ------------ ------------ ------------
Atlanta $13.6 $43.5 31
Baltimore $39.8 $59.7 67
New York\b $9.7 $10.0 97
Kentucky Highlands $27.8 $40.0 70
Mississippi Mid-Delta $5.3 $5.5 96
Rio Grande Valley $9.3 $12.9 72
======================================================================
Total $105.5 $171.6 61
----------------------------------------------------------------------
\a These amounts reflect the SSBG funds that each EZ planned to use
for the first phase of its activities over the 10-year life of the
program; therefore, the amount generally does not reflect the total
amount available to each EZ.
\b The federal SSBG amounts allocated by the New York EZ for each
activity were matched by equal amounts from the city and the state.
Source: EZs' reports to HUD and USDA from July through Sept. 1997.
PROGRESS IN IMPLEMENTING
ECONOMIC DEVELOPMENT
ACTIVITIES ALSO VARIES
---------------------------------------------------------- Letter :3.2
The six EZs reported that they are making progress in implementing
their economic development activities. However, the extent of their
progress varies. Four of the EZs--Baltimore, the Kentucky Highlands,
New York, and the Rio Grande Valley--have reported that they have
initiated or completed many of their economic development activities.
The two remaining EZs--Atlanta and the Mississippi Mid-Delta--have
established one-stop capital shops, which are designed to provide
comprehensive technical and financial assistance in a single location
to small businesses. They also have made several loans and one grant
to businesses but have made little progress on other economic
development activities.
In its performance review, the Baltimore EZ reported completing or
initiating action on 17 of its 19 economic development activities.
Officials from the EZ governing body confirmed this progress during
our visit. Specifically, the officials said that, as of May 1998,
they (1) had provided training that contributed to the placement of
100 residents in jobs, (2) had completed the privatization of
neighborhood food markets that provide business opportunities within
the zone, and (3) will continue their efforts to attract businesses
and create or expand job opportunities. They also said that they had
worked with Employ Baltimore--a city government employment
development initiative--to place more than 1,100 of the zone's
residents in jobs throughout the city. Although the Baltimore EZ has
begun to implement its system for getting zone residents into jobs,
it is behind schedule largely because the establishment of a
community-based structure for identifying potential community
employees and offering career counseling, training, and placement
services has taken longer than anticipated. The EZ has not yet
established a community development bank, which, according to the
EZ's plans, will lend funds for business and residential development
within the eastern side of the zone.\10
The Kentucky Highlands EZ reported completing or initiating action on
18 of 20 economic development activities. During our visit,
officials from the EZ said that the 1997 performance review generally
reflected its progress. They noted that one loan fund had provided
loans to businesses, resulting in the creation of 644 jobs as of
March 31, 1998. Other activities that had been initiated included
developing industrial parks, training workers for jobs in the
manufacturing industry, and providing downtown revitalization loans
to businesses. Of the two actions that had not been initiated, one
was classified as uncertain and the other was found to be infeasible.
Specifically, the EZ had not begun developing an airport that would
accommodate larger airplanes because, according to EZ officials,
funding was hard to obtain and a court ruling found that the
airport's board was improperly organized. The EZ's efforts to
establish a waste recycling plant were terminated after a feasibility
study determined that there would not be enough waste available to
make the plant cost-effective. Officials from the EZ said that the
funds for this activity would be reallocated to other activities.
According to its 1997 performance review, the New York EZ has
initiated action on 20 of its 38 economic development activities,
including (1) establishing a business resource and service center,
which, according to the report, has held 26 business seminars and
facilitated 27 loans; (2) establishing a credit union for use by the
zone's residents; and (3) revitalizing commercial facilities.
Funding has been approved for the 18 activities on which action had
not begun at the time the progress report was prepared. EZ officials
told us that they had subsequently canceled their plans for an
apprenticeship preparation program and had initiated actions on five
other activities, including enrolling 233 residents in workforce
preparation activities. The remaining economic development
activities included efforts to increase tourism and expand workforce
preparation initiatives.
The Rio Grande Valley EZ reported taking action on all 10 of its
economic development activities. These activities included
developing training for nursing assistants; training welders to work
in the local manufacturing industry; and extending small loans, as
part of a one-stop capital shop, to EZ residents to start small
businesses. The EZ had also completed a facility, called a business
incubator, for fostering new businesses within the zone by providing
them with administrative support and work space at a minimal cost.
At the time of our visit in March 1998, the Rio Grande EZ had planned
10 additional economic development activities, of which 6 were
ongoing. All of the additional activities related to business
development and workforce training.
Although the Atlanta EZ reported to HUD in its 1997 performance
review that it had completed or begun implementing 22 of its 23
economic development activities, EZ officials gave us a March 1998
internal status report showing that action had begun on only 4 out of
7 economic development activities. Specifically, the status report
showed that actions were initiated to set up a one-stop capital shop,
establish a revolving loan fund, provide funds to develop employment
strategies for women, and renovate a vacant building. The report
also showed that actions had not yet been initiated to redevelop the
Centennial Olympic Business Park, establish another revolving loan
fund, or market the EZ's tax credits. The differences in the
progress reported in the 1997 performance review and in the 1998
status report are due to several factors. First, the performance
review lists a revolving loan fund as one activity and individual
loans issued from that fund as other, separate activities, while the
status report lists all of these as a single activity. Similarly,
the performance review lists a project related to vacant property and
a specific entity that received funds under that project as separate
activities, while the status report lists both as a single activity.
The performance review also includes activities, such as
reconstructing a sports arena and tracking job applicants, that were
not included in the status report. In addition, the status report
includes only activities that had been approved by the board at the
time the report was issued. Finally, the performance review
indicates that actions have been initiated on three activities for
which the status report shows that no actions have been initiated.
The acting executive director of the EZ at the time of our visit told
us that he was not involved with the EZ when the performance review
was prepared and, consequently, could not explain the differences.
The Mississippi Mid-Delta EZ reported starting five of eight economic
development activities. For example, the EZ said it had initiated
actions to attract and maintain jobs and to strengthen and maintain
businesses and industries. The EZ board had approved three other
activities--to promote and attract industrial and manufacturing jobs,
to help businesses expand within the zone, and to expand and improve
training programs for workers. At the time of our visit in April
1998, the EZ said it had added a one-stop capital shop to its list of
activities. Officials noted that actions had been initiated on a
total of seven activities--the five reported in 1997, the one-stop
capital shop, and an activity to attract and maintain jobs at Dollar
General Corporation. However, no action had been taken on the other
two funded activities at the time of our visit.
--------------------
\10 This initiative was funded by the city and did not involve the
use of SSBG funds.
EXPERIENCE AND AGREEMENT
AMONG STAKEHOLDERS PROMOTE
PROGRESS
---------------------------------------------------------- Letter :3.3
Officials involved in implementing the EZs told us that two factors
facilitated their progress--obtaining agreement among stakeholders
and experience in implementing similar economic development
activities. For example, officials from the Kentucky Highlands and
Rio Grande Valley EZs attributed much of their progress to their
multilevel project approval processes, which were established early
in the program. Their processes allowed stakeholders to participate
at the local level as well as at the zonewide level. Once decisions
were approved at the local level, they were then submitted for
approval to a zonewide board. Members of this board also made
decisions on projects affecting the entire EZ. Conversely,
disagreement among stakeholders delayed activities. For example, the
New York EZ said that its progress was inhibited until its three
major stakeholders (the federal, state, and city governments, each of
which contributed $100 million to the EZ) clarified their roles and
responsibilities. The EZ has since made steady progress. Similarly,
the Atlanta EZ has had difficulty implementing activities because of
disagreements among the EZ advisory board, board of directors, and
staff over their roles and responsibilities.\11 The Mississippi
Mid-Delta EZ also ascribed delays to disagreements over the state
government's role in making SSBG funds available to the EZ. In the
absence of written operating policies and procedures, several
disagreements have also arisen among this EZ's executive director,
board members, and community representatives.
Another factor affecting the progress of the EZs was the extent to
which their management organizations had prior experience in
implementing similar activities. Officials from the Kentucky
Highlands EZ said that the organization managing its EZ has existed
for 26 years and had prior experience implementing economic
development programs, such as those funded through the Department of
Commerce's Economic Development Administration. Consequently, the
people involved were knowledgeable about other federal, state, and
local economic development programs and regulations. The Kentucky
Highlands executive director attributed his EZ's progress in
implementing the program to this experience. On the other hand,
officials in the Baltimore EZ said that they had difficulty locating
experienced organizations to implement career centers, which would
identify residents' needs for jobs and provide training to those
residents. EZ officials in New York also mentioned that it took
longer than expected to involve residents in the implementation
process because the residents lacked experience in evaluating
proposals to implement projects.
--------------------
\11 At the time of our review, the Atlanta EZ was operating under an
acting executive director. The former executive director's contract
was not renewed and most of the EZ staff had been fired for lack of
progress in implementing the EZ's projects and excessive
administrative spending.
BOTH HUD AND USDA MONITOR THE
EMPOWERMENT ZONES' PROGRESS
------------------------------------------------------------ Letter :4
Both HUD and USDA said that they use progress reports from the EZs,
together with visits by their own field office staff, to monitor the
performance of the EZs and evaluate their fitness to continue in the
EZ program. In addition, both agencies have sponsored studies, which
were performed by organizations that were not involved in
implementing the program, to help them monitor implementation
efforts.\12
HUD's coordinator for the EZ program told us that HUD uses the
reports from the EZs to help monitor the progress that is being made.
The reports are reviewed in headquarters and by field office
representatives. For instance, in March 1997, HUD issued reports on
each of the communities involved in the program and identified
implementation problems at five locations, including one EZ--the
Camden portion of the Philadelphia/Camden EZ. On the basis of
subsequent reports, HUD determined that improvements were made in all
five communities. The official added that HUD would consider
revoking a designation, as allowed by the program's authorizing
legislation, if progress was not being made.
HUD field staff said that although the EZ program is primarily run by
HUD headquarters, they have provided assistance when asked by the EZs
and have reviewed progress reports at the request of headquarters.
HUD field and headquarters staff told us that under HUD's management
reform initiative, the field offices will have an increased role in
assisting the EZs and monitoring their activities. Specifically, the
field offices will have (1) community builders, who will be
responsible for assisting several HUD programs, including the EZ
program, and (2) public trust officers, who will be responsible for
monitoring HUD programs, including the EZ program. According to the
EZ program's coordinator, training for the community builders is
under way and training for the public trust officers is being
developed. In addition, the EZ office in HUD headquarters plans to
conduct its own training sessions on the EZ program for community
builders and public trust officers.
According to USDA officials involved in implementing the EZ program,
representatives from the Department's field offices conduct periodic
site visits to rural EZs and are expected to attend EZ board or
committee meetings, as well as keep abreast of the zones' progress in
implementing the program. Accordingly, the cognizant USDA rural
development field office staff member prepares a weekly report to the
headquarters Office of Community Development outlining the EZ's
overall performance. USDA officials told us that they have also
brought in a technical expert when (1) they have identified a
specific problem or (2) an EZ has requested technical assistance on a
particular project. In addition, USDA plans to conduct a
comprehensive review of the EZ program about once every 3 years
and/or when field office reports identify problems or show that a
particular EZ is falling behind in its benchmarks. In May 1998, for
example, USDA conducted such a review of the Mid-Delta Mississippi EZ
to obtain an overall view of its performance. The review involved
meeting with state officials, board members, and the executive
director, as well as examining the EZ's files and planned activities.
The results of this review were not available when we were conducting
our work. Finally, USDA's Office of Community Development prepares
weekly reports to the Under Secretary for Rural Development that
include information on the EZs' progress and any changes or
significant problems.
--------------------
\12 These reports were Building a Community Plan for Strategic
Change: Findings From the First Round Assessment, Nelson A.
Rockefeller Institute of Government, State University of New York
(1996) and Rural Empowerment Zones/Enterprise Communities: Lessons
From the Learning Initiative, Community Partnership Center,
University of Tennessee (Feb. 1998).
EFFORTS TO DESIGNATE THE
REMAINING EMPOWERMENT ZONES ARE
ONGOING
------------------------------------------------------------ Letter :5
In April 1998, HUD and USDA published notices inviting communities to
apply for the new EZ designations by October 9, 1998. They also
issued regulations covering the program. HUD and USDA have jointly
prepared program and application guides and have each held workshops
throughout the country for communities interested in applying for a
designation. Specifically, HUD conducted 10 workshops nationwide
between April and May 1998, while USDA conducted 14 workshops
nationwide between May and June. Workshop topics included how to
apply for the program, develop a strategic plan, develop a governance
structure, design a performance management system, understand and
market EZ tax incentives, develop programs and projects to promote
business development, and use job training and job placement services
to help residents get jobs.
In October 1998, the Congress provided $45 million for the 15 new
urban EZs ($3 million for each one) and $10 million for the 5 new
rural EZs. USDA officials told us that they will allocate $2 million
to each new rural EZ.\13
Both agencies are evaluating communities' applications for
designation. HUD received about 120 applications, while USDA
received 169 applications, of which 160 were complete. Program
officials from both agencies told us that they expect the
designations to be made no later than January 1, 1999, the statutory
deadline.
--------------------
\13 The Congress also authorized the designation of 20 new rural
enterprise communities and provided a total of $5 million for them.
USDA officials said that they will allocate $250,000 to each new
rural enterprise community.
AGENCY COMMENTS
------------------------------------------------------------ Letter :6
We provided a draft of this report to HUD and USDA for review and
comment. In addition, we sent the relevant sections of the report to
each EZ for its review.
HUD generally agreed with the information in the report. However,
HUD suggested that the report's title be revised to reflect its focus
on economic development activities. We revised the title of the
report as suggested. HUD also said that it planned to increase its
monitoring of the EZs and to implement an Internet-based performance
measurement system. HUD's comments are reproduced in appendix VII of
this report.
USDA generally agreed with the information presented in the report
and provided editorial and technical corrections, which we
incorporated where appropriate.
In general, the EZs provided updated information or clarification on
the status of their activities, which we incorporated where
appropriate. In addition, the New York EZ provided current
information on the funding of its projects. We did not incorporate
this information because we did not receive similar information from
the other EZs.
SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :7
To determine the progress that the Atlanta, Baltimore, New York,
Kentucky Highlands, Mississippi Mid-Delta, and Rio Grande Valley EZs
made in implementing their economic development activities and the
causes for any delays, we reviewed documents prepared by the EZs,
including memorandums of agreement, benchmark documents, and
performance reports submitted to HUD and USDA. We did not review the
accuracy of the information reported by the EZs in these reports;
however, we did review HUD's and USDA's methods for ensuring the
reports' accuracy.\14 We also reviewed HUD's and USDA's field
evaluations for all of the EZs visited, interviewed HUD and USDA
headquarters officials and field staff, and reviewed reports from
entities that were under contract with HUD and USDA to evaluate the
EZ program. During our visits to the EZs, we interviewed their
executive directors and toured locations where economic development
activities were being implemented. In addition, we interviewed
residents and business representatives in the Baltimore, New York,
Kentucky Highlands, Mississippi Mid-Delta, and Rio Grande Valley EZs.
We also attended meetings of the advisory board or board of directors
in the Atlanta, Baltimore, Kentucky Highlands, and Rio Grande Valley
EZs.
To determine monitoring and evaluation efforts, we interviewed HUD
and USDA officials in headquarters and in the field offices we
visited, reviewed reports prepared by field office staff, and
reviewed training documents provided to HUD's community builders. To
describe the efforts to implement the second round of EZs, we
compared the 1993 legislation authorizing the first EZs to the 1997
legislation authorizing the new EZ designations. We also obtained
and reviewed HUD and USDA documents on the new EZ designations. In
addition, we reviewed other information relevant to the EZs,
including the President's fiscal year 1999 budget request. We
conducted our work from December 1997 through November 1998 in
accordance with generally accepted government auditing standards.
--------------------
\14 HUD's Office of Inspector General recently issued reports on,
among other things, the accuracy of reporting at EZs in four
locations--Atlanta, Chicago, Detroit, and Philadelphia. These
reports are Audit Report: City of Atlanta Empowerment Zone Program
(98-CH-259-1005, Sept. 28, 1998), Audit Report: City of Chicago
Empowerment Zone Program (99-CH-259-1002, Oct. 15, 1998), Audit
Report: City of Detroit Empowerment Zone Program (99-CH-259-1003,
Oct. 20, 1998), and Audit Report: City of Philadelphia Empowerment
Zone Program (98-CH-259-1006, Sept. 30, 1998).
---------------------------------------------------------- Letter :7.1
We are sending copies of this report to the appropriate congressional
committees and to the Secretaries of Housing and Urban Development,
Agriculture, and Health and Human Services. We will also make copies
available to others on request.
Please call me at (202) 512-7631 if you or your staff have any
questions about the material in this report. Major contributors to
this report are listed in appendix VIII.
Sincerely yours,
Stanley J. Czerwinski
Associate Director, Housing and
Community Development Issues
STATUS OF ACTIVITIES IN THE
ATLANTA EMPOWERMENT ZONE
=========================================================== Appendix I
The Atlanta empowerment zone's (EZ) implementation process involves a
sequence of steps that include proposing an activity, obtaining
approval from the EZ board to proceed with that activity, obtaining
approval for funding the activity from the appropriate local and
state entities, initiating actions to implement the activity, and
completing actions associated with the activity. These steps are
referred to as "proposed," "board approved," "funding approved,"
"ongoing," and "completed," respectively. Table I.1 shows each
planned economic development activity, its status as reported by the
EZ in its 1997 performance review, and the amount of Social Services
Block Grant (SSBG) funds allocated to the activity.\15
A March 1998 status report provided by Atlanta EZ officials showed
seven activities as planned and indicated that progress was ongoing
for four of the activities--the vacant property strategy, the female
power demonstration, the one-stop capital shop, and the Atlanta
Empowerment Zone Corporation revolving loan fund. The EZ had not yet
initiated action on the three remaining activities. (See note \a in
table I.1 for the activities that were included in the status
report). The differences in the progress reported in the 1997
performance review and in the 1998 status report are due to several
factors: (1) the performance review lists a revolving loan fund as
one activity and individual loans issued from that fund as other,
separate activities, while the status report lists all of these as a
single activity; (2) the performance review lists a project related
to vacant property and a specific entity that received funds under
that project as separate activities, while the status report lists
both as a single activity; (3) the performance review includes
activities, such as reconstructing a sports arena and tracking job
applicants, that are not included in the status report; (4) the
status report includes only activities that had been approved by the
board at the time the report was issued; and (5) the performance
review indicates that actions have been initiated on three activities
for which the status report shows that no actions have been
initiated.\16
Table I.1
Atlanta EZ's Economic Development
Activities--Status and SSBG Allocation
SSBG
Activity Status allocation
------------------------------------------------------------- ------------ ------------
Marketing Business Incentives\a--to market EZ business Ongoing $200,000
incentives to existing and prospective zone businesses
Vacant Property Strategy\a--to identify and redevelop vacant Ongoing 2,000,000
EZ buildings
Old Fourth Ward Commercial Property Redevelopment--to Ongoing \b
redevelop a building located at 551 Ralph McGill Boulevard
Manufactured Housing Study--to assess the use of manufactured Ongoing 200,000
housing in the zone
Female Power Demonstration\a--to educate and empower female Completed 400,000
zone residents to move them toward self-sufficiency through
employment
Atlanta One-Stop Capital Shop\a--to provide comprehensive Ongoing 1,016,000
technical and financial assistance in a single location to
the area's small businesses
Community Empowerment Advisory Board Revolving Loan Fund\a-- Ongoing 2,100,000
to provide loans of up to $50,000 to home, community-based,
and start-up businesses
Atlanta Empowerment Zone Corporation Revolving Loan Fund\a-- Ongoing 2,400,000
to provide loans in excess of $50,000 to businesses that
locate or expand in the zone
Autocraft Body and Paint Shop--to renovate and expand a Ongoing \c
business in its current location
Corporate Courier--to finance businesses that expand in or Ongoing \c
relocate to the zone
Creative Fine Arts--to finance businesses that expand in or Ongoing \c
relocate to the zone
Fulton Cotton Bag Mill--to renovate a vacant property for Ongoing \c
commercial, retail, and residential use
Miss Piggy's Southern Cuisine--to create a new business in Ongoing \c
the zone
Sweet Auburn Curb Market--to renovate an historic food market Ongoing \c
Leveraged Loan Fund--to provide loans to existing small Proposed 200,000
businesses that have little or no collateral and are
service-oriented
Job Training--to provide training Ongoing 0
Job Training-Career Day--to provide job information and Completed 0
solicit job interests
Job Training-Computer Jobs Bank--to identify all jobs Ongoing 0
available in the state of Georgia
Job Training-Renewal Atlanta--to recruit, train, and track Ongoing 85,000
applicants for jobs in EZ businesses
Atlanta Hawks/Atlanta Thrashers Arena--to reconstruct a Ongoing 0
sports arena
Centennial Olympic Park Area Business Park\a--to redevelop a Ongoing 5,000,000
1-million-square-foot office park
MLK and Ashby Shopping Center--to develop vacant land into a Ongoing 0
shopping center
Turner Field--to renovate the Olympic stadium for use as a Completed 0
baseball field
=========================================================================================
Total $13,601,000
-----------------------------------------------------------------------------------------
\a These seven activities were included in the Mar. 1998 status
report provided by Atlanta EZ officials.
\b This activity, which is part of the Vacant Property Strategy, is
listed as a separate activity in the Atlanta EZ's 1997 performance
review but has no additional funds associated with it.
\c This activity, which is part of the Atlanta Empowerment Zone
Corporation Revolving Loan Fund, is listed as a separate activity in
the Atlanta EZ's 1997 performance review but has no additional funds
associated with it.
Source: Atlanta EZ's 1997 performance review.
Table I.2 lists categories that include the Atlanta EZ's planned
activities that are not related to economic development and shows the
amount of SSBG funds allocated to each category. Each category
contains multiple planned activities.
Table I.2
Other Categories of Activities and Their
SSBG Allocation
Category SSBG allocation
-------------------------------------------------- ------------------
Creating safe and livable communities $4,514,300
Lifting youth and families out of poverty 5,173,999
Providing adequate housing for all 18,000,000
Governance 2,248,000
======================================================================
Total $29,936,299
----------------------------------------------------------------------
Source: Atlanta EZ's 1997 performance review.
--------------------
\15 Under the EZ program, the Atlanta EZ received $100 million in
SSBG funds for use over the 10-year life of the program.
\16 The acting executive director of the EZ at the time of our visit
told us that he was not involved with the EZ when the performance
review was prepared and, consequently, could not explain the
differences.
STATUS OF ACTIVITIES IN THE
BALTIMORE EMPOWERMENT ZONE
========================================================== Appendix II
The Baltimore EZ's implementation process involves a sequence of
steps that include researching and reviewing the activities in the
EZ's original application to develop the program's design and obtain
review and input from an advisory council whose members represent the
EZ's various constituencies, obtaining approval from the EZ board to
proceed with an activity, presenting that activity to the state and
federal governments for review and acceptance, initiating actions to
implement the activity, and completing actions associated with the
activity. These steps are referred to as "proposed," "board
approved," "state and federal government approved," "ongoing," and
"completed," respectively. Table II.1 shows each planned economic
development activity, its status as reported by the EZ in 1997, and
the amount of SSBG funds allocated to the activity.\17
Table II.1
Baltimore EZ's Economic Development
Activities--Status and SSBG Allocation
SSBG
Activity Status allocation
------------------------------------------------------------- ------------ ------------
Business Empowerment Center--to provide businesses with Ongoing $4,200,000
assistance and access to capital
High-Risk Capital Loan Fund--to provide gap financing for Ongoing 1,000,000
small businesses to obtain capital from traditional lenders
Zone Spin-Off Business--to create spin-off businesses on the Ongoing 250,000
supplier network for health care industries in the zone
Fairfield Ecological Park--to convert brownfield land into an Ongoing 863,600
industrial park
State Enterprise Zone Development--to provide additional Completed 0
incentives to locate in the zone
Carroll Park Industrial Area Business--to improve Ongoing 250,000
infrastructure needed for businesses to strengthen and grow
Finance Vehicle--to provide incentive financing to stimulate Ongoing 2,500,000
job creation
Brownfield Loans and Grants--to provide incentive financing Ongoing 3,000,000
and grants to revitalize brownfield land in the zone
Neighborhood Food Market Privatization--to privatize four Completed 0
public markets
Neighborhood Commercial Revitalization--to stabilize and Ongoing 750,000
expand employment in commercial areas
Community Development Bank--to lend money to businesses and Board 0
for residential development approved
Village Center Employment and Training--to design a career Ongoing 15,350,000
center model to meet residents' job needs
Family Support Strategy--to assist in developing activities Ongoing 1,102,000
that support workforce participation
Primary and Preventive Health--to provide health screening Board 3,050,000
for residents prior to training or employment approved
Substance Abuse Strategy--to assist addicted persons in Ongoing 5,045,115
participating in the workforce
Reverse Commuting--to provide transportation to connect EZ Ongoing 1,000,000
residents with jobs in the suburbs
Employ Baltimore Zone Advisor--to increase linkages between Ongoing 0
zone businesses and zone residents in order to increase the
residents' participation in the workforce
Business Skills Advisory Group--to focus on the workforce Ongoing 0
needs of businesses
Child Care--to support workforce participation by providing Ongoing 1,400,000
resources for child care
=========================================================================================
Total $39,760,715
-----------------------------------------------------------------------------------------
Source: Baltimore EZ's 1997 performance review.
The Baltimore EZ also had planned activities related to improving the
quality of life and building community capacity that were allocated
$12,423,800 and $7,500,000 in SSBG funds, respectively.
--------------------
\17 Under the EZ program, the Baltimore EZ received $100 million in
SSBG funds for use over the 10-year life of the program.
STATUS OF ACTIVITIES IN THE NEW
YORK EMPOWERMENT ZONE
========================================================= Appendix III
The New York EZ's implementation process involves a sequence of steps
that include proposing an activity, obtaining approval from the EZ
board to proceed with that activity, obtaining approval for funding
the activity from the appropriate local and state entities,
initiating actions to implement the activity, and completing actions
associated with the activity. These steps are referred to as
"proposed," "board approved," "funding approved," "ongoing," and
"completed," respectively. Table III.1 shows each planned economic
development activity, its status as reported by the EZ in 1997, and
the amount of SSBG funds allocated to the activity.\18
Table III.1
New York EZ's Economic Development
Activities--Status and SSBG Allocation
SSBG
Activity Status allocation
------------------------------------------------------------- ------------ ------------
Neighborhood Trust Federal Credit Union--to create a credit Ongoing $98,750
union in the area
Harlem USA Operating Company--to build a retail and Ongoing 3,733,333
entertainment center
Minton's Playhouse and Restaurant--to renovate and reopen Board 116,666
this restaurant and jazz club approved
Isabella Geriatric Center Nursing Assistant Training--to Ongoing 20,000
expose students to health care careers through a school-to-
work program
Washington Heights/Inwood Development Corporation--to provide Ongoing 75,000
capital to small business owners and entrepreneurs
Business Resource and Investment Service Center--to establish Ongoing 564,402
a one-stop capital shop and technical assistance center
Black United Fund of New York--to offer copying, computer, Ongoing 33,333
and communications services to individuals and businesses
Broadway Video Incorporated--to expand the company's Board 146,313
duplication services division by developing a mass video approved
production facility
Alexander Doll Company--to provide training and factory Board 533,334
renovation approved
East Harlem Microloan Program--to market small business loans Board 83,333
to local businesses that do not qualify for traditional approved
loans
Institute for Youth Entrepreneurship--to expose youth to Ongoing 41,667
entrepreneurial career paths
The Studio Museum in Harlem Store--to expand the museum Funding 50,000
store's capacity to increase revenues from tourism approved
Small Business Assistance Initiative--to help businesses Board 583,333
construct and maintain proper financial records approved
Central Harlem Commercial Revitalization Program--to provide Ongoing 250,000
technical assistance for EZ businesses
East Harlem Commercial Revitalization Program--to provide Ongoing 250,000
technical assistance for EZ businesses
Washington Heights/Inwood Commercial Revitalization Program- Ongoing 250,000
-to provide technical assistance for EZ businesses
Washington Heights Business Improvement District Management Ongoing 41,666
Association--to provide technical assistance for EZ
businesses
Julia de Burgos Latino Cultural Center Feasibility Study--to Ongoing 41,666
develop a plan for local art and cultural groups to get
tenants for and manage a vacant building
Masjid Malcolm Shabazz 116th Street Anchor/Retail--to provide Ongoing 100,000
assistance to vendors selling at a local marketplace
Boys Harbor Incorporated--to develop a collection of rare Board 41,667
photos, videos, recordings, literature, and oral histories approved
related to Latin music
Community Family Planning Center--to acquire, renovate, and Ongoing 76,796
convert an abandoned firehouse into a health care facility
East Harlem Neighborhood-Based Alliance Corporation--to Ongoing 20,000
introduce EZ youth to health care careers through
internships
Community Court Feasibility and Development Study--to study Ongoing 36,666
the feasibility of a decentralized court that will
immediately sentence convicted wrongdoers who have not
committed felonies and attempt to reintegrate them into
neighborhood life
Beacon School Community Partnership--to expand computer Ongoing 266,666
literacy training to youth
Virtual Y--to increase reading scores through an after- Ongoing 190,000
school program
Harlem Technology Center--to expand computer literacy Funding 44,315
training to youth and community residents approved
Baked in the Hood--to create a professional kitchen that will Funding 78,000
permit production to meet demand for baked goods and approved
increase workers' readiness for permanent jobs
Harlem Hospital and Columbia University Dental Training Funding 83,333
Program--to provide high-quality training for certified approved
dental assistants
135th Street Gatehouse Project--to expand performance and Funding 166,666
rehearsal space for local performing arts groups approved
The Valley Incorporated Summer Youth Employment--to provide Ongoing 8,333
youth with summer internships and employment
University Consortium Technical Assistance Pilot--to provide Ongoing 50,000
technical assistance for EZ residents, organizations, and
businesses
Welfare-to-Work Initiatives--to enroll at least 200 public Funding 380,000
assistance recipients in welfare-to work-programs approved
Training for Growing Sectors of the Zone and Regional Funding 666,668
Economy--to equip EZ residents with skills and training and approved
help them obtain jobs in growth industries
Entrepreneurial Training Programs--to create and enhance Funding 195,834
entrepreneurial activities approved
Basic Literacy Programs--to enroll at least 24 EZ residents Funding 56,668
in basic literacy programs approved
Apprenticeship Preparation Program--to establish or expand Funding 60,000
youth apprenticeship programs approved
English as a Second Language Program--to enroll at least 195 Funding 141,668
EZ residents in the program approved
General Equivalency Diploma Program--to enroll at least 900 Funding 113,336
EZ residents in the program approved
=========================================================================================
Total $9,689,412
-----------------------------------------------------------------------------------------
Source: 1997 performance reviews from the Bronx Overall Economic
Development Corporation and the Upper Manhattan Empowerment Zone
Development Corporation.
The New York EZ also had planned activities related to child care
that were allocated $333,334 in SSBG funds.
--------------------
\18 Under the EZ program, the New York EZ received $100 million in
SSBG funds for use over the 10-year life of the program.
STATUS OF ACTIVITIES IN THE
KENTUCKY HIGHLANDS EMPOWERMENT
ZONE
========================================================== Appendix IV
The Kentucky Highlands EZ's implementation process involves a
sequence of steps that include proposing an activity, obtaining
approval from the EZ board to proceed with that activity, obtaining
approval for funding the activity from the appropriate local and
state entities, initiating actions to implement the activity, and
completing actions associated with the activity. These steps are
referred to as "proposed," "board approved," "funding approved,"
"ongoing," and "completed," respectively. Table IV.1 shows each
planned economic development activity, its status as reported by the
EZ in 1997, and the amount of SSBG funds allocated to the
activity.\19
Table IV.1
Kentucky Highlands EZ's Economic
Development Activities--Status and SSBG
Allocation
SSBG
Activity Status allocation
------------------------------------------------------------- ------------ ------------
Developmental Venture Fund--to establish and manage a Ongoing $11,000,000
developmental venture fund for new and expanding businesses
Clinton County Industrial Park--to develop an industrial park Ongoing 1,000,000
Wayne County Industrial Park--to develop an industrial park Ongoing 1,000,000
Jackson County Specification Building--to construct an Complete 1,000,000
industrial specification and make infrastructure
improvements
Crop Loan Fund--to establish an alternative crop loan fund Ongoing 300,000
for growers in the zone
Production Loan Fund--to provide an operating line of credit Ongoing 1,000,000
for farmers in the zone
Mountain Venture Loan Fund--to recapitalize a small business Ongoing 2,000,000
investment corporation to provide financing for businesses
in the zone
Training Program-Rehabilitation Workshop--to establish a Ongoing 1,300,000
workshop in each area to raise the production and skills of
workers
Entrepreneurial Training--to establish semi-annual Ongoing 700,000
entrepreneurial training courses in Jackson County
Training/Recreation--to construct and operate a training and Ongoing 2,500,000
postsecondary education facility
Clinton County Revolving Loan Fund--to establish and manage a Ongoing 1,000,000
revolving loan fund for economic/community development
purposes
Wayne County Revolving Loan Fund--to establish and manage a Ongoing 150,000
revolving loan fund for economic/community development
purposes
Home Keyer Program--to establish and manage a revolving loan Ongoing 400,000
fund for economic/community development purposes
Albany Downtown Revitalization--to develop and implement a Funding 500,000
downtown revitalization program approved
McKee Downtown Revitalization--to develop and implement a Ongoing 250,000
downtown revitalization program
Annville Downtown Revitalization--to develop and implement a Ongoing 250,000
downtown revitalization program
Airport Project--to develop a transport-class airport with a Proposed 475,000
5,500-foot runway to serve the zone
Clinton County Water System Expansion--to upgrade water Ongoing 500,000
delivery systems for residents and businesses
Wayne County Water System--to upgrade water delivery systems Completed 500,000
for residents and businesses
Recycling Project--to determine the feasibility of and Terminated 2,000,000
develop a multicounty recycling facility
=========================================================================================
Total $27,825,000
-----------------------------------------------------------------------------------------
Source: Kentucky Highlands EZ's Sept. 1997 accountability
assessment.
The Kentucky Highlands EZ also had planned activities related to
community development and project administration that were allocated
$7,825,000 and $4,350,000 in SSBG funds, respectively.
--------------------
\19 Under the EZ program, the Kentucky Highlands EZ received $40
million in SSBG funds for use over the 10-year life of the program.
STATUS OF ACTIVITIES IN THE
MISSISSIPPI MID-DELTA EMPOWERMENT
ZONE
=========================================================== Appendix V
The Mississippi Mid-Delta EZ's implementation process involves a
sequence of steps that include proposing an activity, obtaining
approval from the EZ board to proceed with that activity, obtaining
approval for funding the activity from the appropriate local and
state entities, initiating actions to implement the activity, and
completing actions associated with the activity. These steps are
referred to as "proposed," "board approved," "funding approved,"
"ongoing," and "completed," respectively. Table V.1 shows each
planned economic development activity, its status as reported by the
EZ in 1997, and the amount of SSBG funds allocated to the
activity.\20
Table V.1
Mississippi Mid-Delta EZ's Economic
Development Activities--Status and SSBG
Allocation
SSBG
Activity Status allocation
------------------------------------------------------------- ------------ ------------
Viking Range--to attract and maintain industrial jobs Ongoing $0
Leading Edge Aircraft Painting--to attract and maintain Ongoing 0
industrial jobs
Dollar General Corporation--to attract and maintain Board 900,000
industrial jobs approved
Wolverine Tube--to strengthen existing businesses and Board 427,000
industries approved
Sporting World--to strengthen existing businesses and Ongoing 0
industries
Southern Fasteners--to strengthen existing businesses and Ongoing 0
industries
Manufacturing and Technology Center--to expand and improve Board 4,000,000
workforce training programs approved
A. Philip Randolph Educational Fund--to strengthen existing Ongoing 0
businesses and industries
=========================================================================================
Total $5,327,000
-----------------------------------------------------------------------------------------
Source: Mississippi Mid-Delta EZ's Sept. 1997 accountability
assessment.
Table V.2 lists categories that include the Mississippi Mid-Delta
EZ's planned activities that are not related to economic development
and shows the amount of SSBG funds allocated to each category. Each
category contains multiple planned activities.
Table V.2
Other Categories of Activities and Their
SSBG Allocation
Category SSBG allocation
-------------------------------------------------- ------------------
Promote community beautification $2,500
Improve the availability of housing 220,000
Improve the quality and accessibility of health 0
care
Improve public safety 0
Improve drug prevention efforts 0
Improve existing infrastructure 0
======================================================================
Total $222,500
----------------------------------------------------------------------
Source: Mississippi Mid-Delta EZ's Sept. 1997 accountability
assessment.
--------------------
\20 Under the EZ program, the Mississippi Mid-Delta EZ received $40
million in SSBG funds for use over the 10-year life of the program.
STATUS OF ACTIVITIES IN THE RIO
GRANDE VALLEY EMPOWERMENT ZONE
========================================================== Appendix VI
For the Rio Grande Valley EZ, table VI.1 shows each planned economic
development activity, its status as reported by the EZ in 1997, and
the amount of SSBG funds allocated to the activity.\21 The status was
reported as "ongoing" if actions had been initiated beyond obtaining
approvals and funding for the activity.
Table VI.1
Rio Grande Valley EZ's Economic
Development Activities--Status and SSBG
Allocation
SSBG
Activity Status allocation
------------------------------------------------------------- ------------ ------------
One-Stop Capital Shop--to provide concentrated technical Ongoing $1,200,000
assistance and counseling to individuals and businesses in
the zone
Enterprise Center--to create a small business incubator Ongoing 750,000
Historical Preservation and Redevelopment--to improve the Ongoing 763,100
quality of the community to attract people and businesses to
Port Isabel
Community Investment Fund-Starr County--to implement a Ongoing 400,000
revolving loan fund in Starr County
Community Investment Fund-Willacy County--to implement a Ongoing 625,000
revolving loan fund in Willacy County
Community Investment Fund-Hidalgo County--to implement a Ongoing 2,000,000
revolving loan fund in Hidalgo County
High Skills Training--to test new labor market strategies to Ongoing 1,500,000
reconnect low-income unemployed individuals with quality
jobs
Demand-Driven Job Training--to provide job training in the Ongoing 679,000
Cameron County subzone
College and University Center--to develop an education and Ongoing 1,108,385
training center
Community Empowerment Center--to provide a literacy Ongoing 310,194
instruction program that will meet the needs of preliterate
adults to continue their education and learn marketable
skills
=========================================================================================
Total $9,335,679
-----------------------------------------------------------------------------------------
Source: Rio Grande Valley EZ's Sept. 1997 accountability
assessment.
Table VI.2 lists categories that include the Rio Grande Valley EZ's
planned activities that are not related to economic development and
shows the amount of SSBG funds allocated to each category. Each
category contains multiple planned activities.
Table VI.2
Other Categories of Activities and Their
SSBG Allocation
Category SSBG allocation
-------------------------------------------------- ------------------
Health care $800,000
Housing 250,000
Youth and education 806,424
Public safety 75,620
Infrastructure and community facilities 1,635,000
======================================================================
Total $3,567,044
----------------------------------------------------------------------
Source: Rio Grande Valley EZ's Sept. 1997 accountability
assessment.
(See figure in printed edition.)Appendix VII
--------------------
\21 Under the EZ program, the Rio Grande Valley EZ received $40
million in SSBG funds for use over the 10-year life of the program.
COMMENTS FROM THE DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
========================================================== Appendix VI
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
MAJOR CONTRIBUTORS TO THIS REPORT
======================================================== Appendix VIII
Kathy R. Alexander
Johnnie E. Barnes
Nancy A. Boardman
Elizabeth R. Eisenstadt
Nancy A. Simmons
Marc A. Wallace
*** End of document. ***