Enterprise zones have helped local communities turn vacant lots or abandoned buildings into new business complexes and affordable housing. More than $1.5 billion has flowed into cities since the program was introduced on the federal level in the 1980s. Enterprise zones have become the impetus for the revitalization of urban areas across the country, and then expanded to rural locations in need of a boost. More than 1,000 areas have been in some way classified as enterprise zones.

The mission of the program is to rebuild areas of economic distress by introducing a redevelopment strategy and create jobs, while providing incentives to those companies willing to make an investment.

Florida Helps Pioneer the Program

Florida established one of the first enterprise zone programs in 1980. Since July 1995, the state has designated 34 enterprise zones.

The Florida Enterprise Zone Program offers businesses located in these zones corporate and sales tax credits for hiring residents, sales tax refunds toward the purchase of building materials and business equipment, and corporate tax credits.

In some zones, a sales tax exemption on electrical energy is available to new businesses. In 1999 and 2000, 654 new businesses moved into or were created in enterprise zones, 6,394 new jobs created by businesses were located in enterprise zones, and 6,262 businesses received technical assistance from zone coordinators, says Burt Van Hoff, administrator for the program.

Local governments administering the enterprise zones received almost $34 million of

funding from federal and state agencies.

Helping Businesses of All Sizes

Established in 1982, the Virginia Enterprise Zone Program offers businesses a package of state incentives, including a 10-year general income tax credit, real property improvement tax credit, investment tax credit and job grants. In addition, each locality offers its own set of incentives tailored to the unique needs of the enterprise zone.

In 2000, 350 businesses took advantage of the enterprise zone program, creating 3,488 jobs. The real property improvement tax credit helped generate an investment of $222 million.

A Strong Tool in Colorado

Businesses located in an enterprise zone in Colorado may qualify for 10 different tax credits and incentives. The credits cover R&D, vacant building rehabilitation, job training, sales and use exemption, investments and new jobs. Colorado, which established its program in 1986, currently has 16 local enterprise zones.

"In the 1980s, before the program began, we experienced 13 percent job growth," said Evan Metcalf, state enterprise zone coordinator for Colorado. "In the 1990s, job growth jumped to 46 percent. Unemployment has decreased by half. This program is one of our strongest tools in attracting companies to establish and retain businesses here."

Deborah Lehman is a freelance business writer based in Fanwood, N.J.