L.A. May Be on HUD Program ‘Short List’ : Redevelopment: Decision on ‘empowerment zones’ is due next week. Officials say request for more information is a good sign.

One week before the federal government selects six “empowerment zone” finalists from a nationwide list, Los Angeles officials said they are optimistic that a local application will be selected, providing blighted communities $100 million in special aid and tax breaks.

Local development officials said Monday that Los Angeles’ application has made the Department of Housing and Urban Development’s “short list” and has a good chance of being selected as one of the finalists chosen from a field of 78 applicants. The decision will be announced Dec. 21.

“We are very optimistic about next week,” said Corole Carrillo, the county’s director of economic development.

Empowerment zones are the engine of President Clinton’s urban revitalization program, a designation that provides blighted neighborhoods tax breaks for business within the zone and grants for job training, child care and other social programs.

A joint application submitted by Los Angeles county and city officials in June proposes a 20-square-mile empowerment zone that includes economically disadvantaged neighborhoods from Pacoima to South-Central to Watts.

Each zone considered by HUD is limited to 20,000 residents and must meet specific requirements for unemployment and poverty rates. Only 4.4% of the city’s jurisdiction can be included in the zone.

From 25% to 40% of the 13,400 residents in the Pacoima section of the zone are considered impoverished. The area includes the Hansen Dam recreation area and the San Fernando Gardens, a low-income housing project that shelters more than 2,000 residents.

Approval of the application is such a high priority that Los Angeles officials have been speculating about HUD’s upcoming decision based on preliminary signals from the agency.

Last week, HUD officials asked Los Angeles officials and other applicants to provide additional details on how they expect to spend federal grants to provide social services within the empowerment zones.

Although some officials have speculated that the request indicates that the Los Angeles application lacked enough information, HUD officials said the request is good news, meaning the applicant is being seriously considered.

“Applications that are being more seriously considered by HUD Secretary Henry Cisneros were contacted last week by the review panel to provide some clarification,” said Mark Fabiani, a former Los Angeles deputy mayor who is now a deputy assistant HUD secretary sitting on the panel that will select the six finalists.

Local officials took the HUD request as a signal that Los Angeles has a good chance of winning a highly coveted empowerment zone.

“Our understanding is that we are among the finalists,” said Marilyn Lurie, a director in the city’s Community Development Department.

The additional information requested by HUD, which one county official described as “pretty minor points,” was due Monday.

Carrillo agreed that the request for additional information is a positive signal.

“We are pleased that HUD asked us to provide some clarification,” he said. “We saw that as only good news.”

He added that he doesn’t know how many applicants are on the “short list” but was told by HUD that the list of 78 applicants has been substantially narrowed to a “smaller population of applicants.”

Los Angeles Councilman Mike Hernandez, whose South Los Angeles district includes major portions of the proposed zone, was cautiously optimistic about the Los Angeles application.

“What I’ve heard is we’re getting it but I’m not saying that until it happens,” he said.

Hernandez added that the application was once in jeopardy because state officials threatened to charge a 5% administration fee to process the federal empowerment zone funding for the city and county of Los Angeles.

But Hernandez said the application became more competitive since Gov. Pete Wilson’s administration agreed last week to drop the fee request.

Pacoima Empowerment Zone

An application for a proposed federal empowerment zone has made the Department of Housing & Urban Development’s “short list,” indicating it has a good chance of being chosen. It would include a 2.4-square-mile area of Pacoima plagued by poverty and high unemployment rates. The zone, the centerpiece of President Clinton’s urban revitalization efforts, is expected to provide tax breaks, grants and social services programs.