“The business community will lead the way in rebuilding the Gulf Coast economy. The Bush administration is committed to encouraging new investment and employment in the region so that businesses can reopen, more people can return to work, and communities can be rebuilt better and stronger than before.” – Commerce Secretary Carlos Gutierrez.
In economic development terms, the Gulf Coast has received a new name of late: The GO ZONE, a moniker that leaves the devastation of Katrina in the past and paves the way for new waves of investment in what has become, in six months, a gold mine of business and economic opportunity.
GO Zone refers to the Gulf Opportunity (GO) Zone Act signed by the President George Bush on Dec. 21, 2005, to reinvigorate the Gulf Coast economy. The Act increases business expensing, accelerates bonus depreciation, provides expensing for demolition and cleanup expenses, and provides net operating loss carry-backs. It authorized an additional $1 billion in New Markets Tax Credit (NMTC) allocation authority to be provided to Community Development Entities (CDEs) with a significant mission of recovery and redevelopment in the GO Zone.
The Act also creates additional tax-exempt private activity bond authority to help rebuild housing and infrastructure in the GO Zone. Louisiana, Mississippi, and Alabama are provided with the authority to issue a special class of private activity bonds, called GO Zone Bonds. Bond authority is approximately $7.9 billion for Louisiana, $4.8 billion for Mississippi, and $2.1 billion for Alabama. Proceeds from these bonds can be used to pay for projects including acquisition, construction, and renovation of nonresidential real property, qualified low-income residential rental housing, single-family residential housing, and public utility property (e.g., gas, water, electric, and telecommunication lines) located in the GO Zone.
According to the Department of Commerce, the region’s reconstruction and economic recovery are one of the top domestic priorities for the administration. More than 16,000 federal personnel have been deployed to assist state and local officials in the Gulf Coast recovery effort. Some $88 billion in federal aid has been made available for relief, recovery, and rebuilding, with another $20 billion requested to support ongoing recovery efforts of the Department of Housing and Urban Development (HUD), U.S. Army Corps of Engineers, Federal Emergency Management Agency (FEMA), Small Business Administration (SBA), and other Federal government agencies.
Federal agencies are helping the region on the road to recovery. Among the tangible results:
• 80 percent of the debris caused by the storms has been cleared in Mississippi and 54 percent has been cleared in Louisiana. More than 80 million cubic yards of debris have been removed from the Coast – an amount equal to the debris removed from the Sept. 11 attacks and Hurricane Andrew combined.
• To ensure debris removal continues and rebuilding proceeds, the Federal government is covering 100 percent of the cost of this cleanup through June 30, whether the task is performed by contractors hired by the U.S. Army Corps of Engineers or local officials, and 90 percent of the cost thereafter.
• To sustain progress, the Environmental Protection Agency (EPA) has worked with State environmental officials to develop efficient protocols for handling hazardous debris like asbestos safely; and they have helped ensure that landfill facilities are operating in compliance with applicable requirements.
The debris that remains is largely on private property, either in back and side yards or inside houses that need to be gutted or demolished. To remove this debris, the Federal government, local leaders, and the homeowners themselves will have to work together.
In addition, the U.S. Army Corps of Engineers is on track to restore 169 miles of damaged levees/floodwalls to authorized design levels by June 1, 2006, before the start of the next hurricane season. President Bush is focusing on the safety and security of the citizens of the Gulf Coast and has committed to providing the resources necessary for them to return and rebuild. About 50 percent (169 of 350 miles) of the levees and floodwalls and 48 percent (34 of 71) of the pump stations were damaged by Hurricane Katrina.
In May, Secretary Gutierrez and Chairman Powell will lead a delegation of business leaders to Louisiana and Mississippi on a “Gulf Coast Business Investment Mission” to highlight investment opportunities, including Federal GO Zone tax incentives, as part of an effort to promote economic growth and job creation in the region.
“There may be no better opportunity for locating and investing than in the Gulf Coast region,” said Secretary Gutierrez. “These communities need everything.”
In line with this, the U.S. Department of Commerce (DOC) created the Hurricane Contracting Information Center (HCIC) to provide a central point of reference for businesses, including those that are minority- or women-owned, to register for and become aware of Federal contracting opportunities. The center has received over 8,200 calls and over 216,000 web visits.
DOC’s Minority Business Development Agency has conducted direct outreach to over 2,000 minority local businesses, assisted over 250 displaced minority firms, and counseled approximately 640 businesses on Gulf Coast procurement opportunities. The DOC is helping the affected region carry out recovery activities in three broad areas: assisting businesses in rebuilding; providing technical assistance and capacity building; and assisting with the development of a long-term recovery strategy. DOC has organized conferences, business-counseling services, workshops, and information seminars to help retain and expand economic growth, as well as to assist adversely affected small and medium-sized businesses.
People Everywhere Committed
In his Address to the Nation from New Orleans’ Jackson Square on Sept.15, 2005, the president called on all Americans to help those affected by Hurricane Katrina with the following result:
• Private individuals, faith-based and community groups, and businesses met the challenge and have contributed more than $3 billion in support of faith-based and community organizations and disaster relief agencies.
• USA Freedom Corps created a nationwide information clearinghouse allowing individuals, businesses, groups, and families to connect with volunteer opportunities to help families in the Gulf Coast.
• There are currently more than two million volunteer opportunities listed on the site – with approximately 20,000 in Louisiana, 16,000 in Mississippi, and over 24,000 in Alabama.
The Katrina Resource Center was set up by USA Freedom Corps and the Corporation for National and Community Service. More than 350 groups, representing over 14,000 volunteers, who contacted the center were either matched with potential relief projects or provided additional information and referrals.
Through all of these efforts and contributions, the Gulf Coast will quickly grow into “Coast of Opportunity.”
For more information visit: www.gulfcoastopportunity.gov.