The Zone of Real Estate Opportunity (04/25/2013)
04/25/2013 San Bernardino
The Zone of Real Estate Opportunity
San Bernardino Valley Enterprise Zone is a 46-mile zone in Southern California that includes the cities of Colton, San Bernardino and unincorporated portions of San Bernardino County.
The Inland Empire is home to four of the state’s 40 enterprise zones: San Bernardino Valley, Hesperia, Barstow and Coachella Valley. These zones not only offer employers long-term cost savings for workforce and capital investments, but real estate firms the opportunity to leverage a unique cost advantage on properties in those areas.
Although there are some bright spots in the region’s industrial market, today’s transactions still hinge on how you can reduce the cost of occupancy. As the cost of doing business in California increases each year and it becomes more challenging to attract companies, these monetary incentives are playing a larger role in helping the industry tip the scale for large and small employers – whether you’re selling or representing a buyer. Enterprise zones are some of the few areas in the state that continue to experience ongoing activity.
Just in recent years, more than 1.8 million square feet of commercial space in the San Bernardino Valley Enterprise Zone was occupied by 29 new businesses, including Amazon and Kohl’s. The program’s hiring tax credit and sale and use tax credit help employers convert square feet in the zone into reduced rent -- roughly 2 to 3 cents per square foot, per month, which adds up at the end of the year.
Firms that utilize the program as a marketing tool have the ability to be more competitive and add more value to their transactions. If you are interested in learning more about how the program works and how to translate the zone’s benefits into reduced rent, contact Wendy Clements at firstname.lastname@example.org or 909.382.4538.
Hiring Tax Credit
Employers in a zone can receive this tax credit for hiring workers that qualify for one of the 11 criteria categories. This includes veterans, Targeted Employment Areas and workers that face barriers to employment such as having a criminal history, receiving public assistance or having a disability. Employers have the potential to earn $37,440 in tax savings over a five-year period for each qualified employee.
Sales and Use Tax Credit
This tax credit allows businesses in a zone to deduct the sales tax, or the use tax paid or incurred on qualified property in the zone. Eligible property includes machinery and machinery parts used to:
Manufacture, process, fabricate, or assemble a product
Produce renewable energy resources
Control air or water pollution
Process data and communicate (computers, CAD systems, copy machines, telephone systems and faxes)