American Cities Gear Up To Apply for Federal Aid

Clinton plan will encourage investment, job creation in poor areas

UNDER the Clinton administration's new community-development program, cities across the United States will be competing this year for special federal funds and tax incentives for businesses.

The plan - supported by a $3.5 billion economic-aid package that passed Congress last August - calls for the creation of nine ``empowerment zones'' and 95 ``enterprise communities'' to encourage investment and job creation in distressed communities.

The concept is similar to former Housing and Urban Development (HUD) Secretary Jack Kemp's ``enterprise zones,'' which offered capital-gains tax cuts to attract businesses to these areas.

The Clinton plan, however, includes tax incentives, for employers who hire workers from the distressed areas, and federal aid. Six urban empowerment zones and three rural zones could get up to $100 million and $40 million grants over two years, respectively. Meanwhile, 65 urban and 30 rural enterprise communities could get up to $3 million each.

Vice President Al Gore Jr. says cities applying for the program must devise plans to attract state, local, and private investment in their communities. Cities will apply in the spring and will most likely be selected this summer. Meanwhile, final regulations will be ready within two months.

Community-development advocates say the plan is a welcome change from the Reagan years. ``The biggest difference is that [the] Reagan administration approach was ideologically routed in supply-side economics,'' says Dick Cowden, executive director of the American Association of Enterprise Zones in Washington. ``They were rigidly opposed to providing any benefits besides tax [breaks]. That, frankly, was a turnoff to a lot of mayors.''

Others are more skeptical. Julio Barreto, senior legislative counsel for the National League of Cities in Washington, says: ``We would have liked to see more communities having the opportunities to participate, ... more resources designated, and more creative ways in using some of the tax benefits.''

Boston Mayor Thomas Menino hopes to make parts of his city an empowerment zone. He will lobby HUD officials in Washington this month. City officials would like to include minority communities such as Chinatown, Mission Hill, Roxbury, and parts of Blue Hill Avenue, which runs through Dorchester and Mattapan.

A revitalization project is now being planned for Blue Hill Avenue. One-quarter of the land along its corridor is vacant, storefronts are in disrepair, and crime is a major problem. In 1968, businesses along the avenue were burned and looted after Martin Luther King Jr.'s assassination.

``Businesses moved out and they didn't come back,'' says Louis Elisa, president of the Boston branch of the National Association for the Advancement of Colored People. ``Although there has been an effort by the people in the community [to restore the area], there has been little effort and little [city] support to try to get [the] avenue back on its feet.''

Mr. Elisa says including parts of the avenue in an empowerment zone would be ``a major development plum.... We have a lot of open space and a lot of people that are trainable. They just lack access to the marketplace.''