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Bever changes his zone stance

He says Costa Mesa shouldn’t be completely designated as a recovery zone because it might drive away new businesses.

January 27, 2010|By Mona Shadia

Reversing his earlier stance, Costa Mesa Councilman Eric Bever is asking the City Council to reconsider last week’s vote to declare the entire city an economic recovery zone.

The council’s 5-0 vote Jan. 19 paved the way for the city to receive $6.4 million in federal bond money through the Obama administration’s program to stimulate the national economy.

The money would be earmarked for helping struggling local businesses bounce back and finance city road and other infrastructure projects at a low interest rate.

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Bever is now saying that the city should instead designate certain parts of Costa Mesa as economic recovery zones rather than blanket its whole geographic area as being in need of those federal stimulus dollars.

“After careful reconsideration, I do not believe the entire city of Costa Mesa should be designated as a recovery zone to qualify for the recovery zone facility bond allocation,” Bever wrote in his official request for the council to reconsider the vote. “I believe such action gives the general public the idea that the City Council believes the entire community to be blighted. I likewise believe such action discourages potential businesses from locating in Costa Mesa.”

For the city to qualify for the bonds through the American Recovery and Reinvestment Act of 2009, it had to designate some areas or the whole city a recovery zone.

Some cities, like Santa Ana, chose to declare its entire geographic area a recovery zone. Irvine, on the other hand, chose to designate some areas as such.

During the Jan. 19 meeting, city staff recommended that the council declare the entire city a recovery zone so every business could have the opportunity to apply for the federal bonds.

South Coast Auto Plaza and Triangle Square, two struggling business centers in Costa Mesa, approached the city, asking it to take advantage of the program so they could apply for bonds available to Costa Mesa and local businesses. The deadline for businesses to apply for participation in the program is Sunday.

Costa Mesa qualifies for $2.5 million in Recovery Zone Economic Development Bonds, which are taxable government bonds that could be used by Costa Mesa to promote economic opportunities, including construction of public facilities or public infrastructure.

The city also qualifies for about $3.9 million in Recovery Zone Facility Bonds, which are tax-exempt bonds that can be issued to qualifying businesses, including retail centers, hotels and industrial buildings.

Costa Mesa qualifies for the recovery bonds as the city’s unemployment rate went from 3.1% in 2007 to 7.4% last October.

The city also saw increased numbers of foreclosures and its sales tax revenues reduced by 21% in 2009 when compared with the previous year.

Bever’s appeal will be in the Feb. 16 council agenda, city officials said. The council will first decide on whether to rehear it during the meeting before discussing the issue.


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