	Background

The Congress established the Empowerment Zone (EZ) and Enterprise Community program in the Omnibus Budget Reconciliation Act of 1993 (P.L. USDA requires the rural EZs to submit weekly progress reports to the field offices and semiannual progress reports to the headquarters Office of Community Development, which is responsible for the rural program’s overall implementation. Progress Varies in Implementing the Empowerment Zone Program

The six EZs that we visited—Atlanta, Baltimore, the Kentucky Highlands, the Mississippi Mid-Delta, New York City, and the Rio Grande Valley—have reported on their progress in implementing a variety of activities involving economic development, housing, public safety, health care, public transportation, education, and family self-sufficiency. All six EZs reported that they are making progress in implementing their economic development activities; however, the extent of their progress varies. Planned Activities Vary Among Empowerment Zones

Each of the six EZs has reported to either HUD or USDA on its progress in implementing the first phase of its planned activities. However, the extent of their progress varies. Four of the EZs—Baltimore, the Kentucky Highlands, New York, and the Rio Grande Valley—have reported that they have initiated or completed many of their economic development activities. Experience and Agreement Among Stakeholders Promote Progress

Officials involved in implementing the EZs told us that two factors facilitated their progress—obtaining agreement among stakeholders and experience in implementing similar economic development activities. Both HUD and USDA Monitor the Empowerment Zones’ Progress

Both HUD and USDA said that they use progress reports from the EZs, together with visits by their own field office staff, to monitor the performance of the EZs and evaluate their fitness to continue in the EZ program. In addition, both agencies have sponsored studies, which were performed by organizations that were not involved in implementing the program, to help them monitor implementation efforts. The reports are reviewed in headquarters and by field office representatives. HUD field and headquarters staff told us that under HUD’s management reform initiative, the field offices will have an increased role in assisting the EZs and monitoring their activities. They also issued regulations covering the program. USDA officials told us that they will allocate $2 million to each new rural EZ.Both agencies are evaluating communities’ applications for designation. Program officials from both agencies told us that they expect the designations to be made no later than January 1, 1999, the statutory deadline. Table I.1: Atlanta EZ’s Economic Development Activities—Status and SSBG Allocation Marketing Business Incentives—to market EZ business incentives to existing and prospective zone businesses Vacant Property Strategy—to identify and redevelop vacant EZ buildings Old Fourth Ward Commercial Property Redevelopment—to redevelop a building located at 551 Ralph McGill Boulevard Manufactured Housing Study—to assess the use of manufactured housing in the zone Female Power Demonstration—to educate and empower female zone residents to move them toward self-sufficiency through employment Atlanta One-Stop Capital Shop—to provide comprehensive technical and financial assistance in a single location to the area’s small businesses Community Empowerment Advisory Board Revolving Loan Fund—to provide loans of up to $50,000 to home, community-based, and start-up businesses Atlanta Empowerment Zone Corporation Revolving Loan Fund—to provide loans in excess of $50,000 to businesses that locate or expand in the zone Autocraft Body and Paint Shop—to renovate and expand a business in its current location Corporate Courier—to finance businesses that expand in or relocate to the zone Creative Fine Arts—to finance businesses that expand in or relocate to the zone Fulton Cotton Bag Mill—to renovate a vacant property for commercial, retail, and residential use Miss Piggy’s Southern Cuisine—to create a new business in the zone Sweet Auburn Curb Market—to renovate an historic food market Leveraged Loan Fund—to provide loans to existing small businesses that have little or no collateral and are service-oriented Job Training-Career Day—to provide job information and solicit job interests Job Training-Computer Jobs Bank—to identify all jobs available in the state of Georgia Job Training-Renewal Atlanta—to recruit, train, and track applicants for jobs in EZ businesses Ongoing Atlanta Hawks/Atlanta Thrashers Arena—to reconstruct a sports arena Centennial Olympic Park Area Business Park—to redevelop a 1-million-square-foot office park MLK and Ashby Shopping Center—to develop vacant land into a shopping center Turner Field—to renovate the Olympic stadium for use as a baseball field (Table notes on next page)
This activity, which is part of the Vacant Property Strategy, is listed as a separate activity in the Atlanta EZ’s 1997 performance review but has no additional funds associated with it.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Empowerment Zone and Enterprise Community program, focusing on the: (1) progress made by the federal empowerment zones in implementing the program; (2) steps taken by the two responsible federal agencies--the Department of Housing and Urban Development (HUD) and the Department of Agriculture (USDA)--to monitor and evaluate the existing zones' progress; and (3) status of steps to designate the second group of empowerment zones.

What GAO Found

GAO noted that: (1) the six empowerment zones that GAO visited have reported on their implementation of a variety of planned activities in the areas of economic development, housing, public safety, health care, public transportation, education, and family self-sufficiency; (2) while the mix of activities varies among the zones, economic development activities generally account for the largest portion of their planned expenditures; (3) the six zones reported that they are making progress in implementing their economic development activities; however, the extent of their progress varies; (4) four of the zones have initiated or completed many of their economic development activities and two zones have established organizations that provide comprehensive technical and financial assistance in a single location to small businesses; (5) officials involved in implementing the empowerment zone program told GAO that two factors facilitated their progress--experience in implementing activities and agreement among stakeholders; (6) both HUD and USDA have sponsored studies of the empowerment zone program to help them monitor implementation efforts; (7) both agencies use progress reports from the zones, together with visits by their own field office staff, to monitor the performance of the zones and evaluate their fitness to continue in the program; (8) HUD required reports from the urban zones in the summers of 1996 and 1997, while USDA has generally required semiannual reports from the rural zones; (9) both agencies perform field reviews and site visits to check the accuracy of the progress reports; (10) while field staff from both agencies said they provide assistance upon request, the extent of their involvement in monitoring and evaluation has varied; (11) HUD field staff told GAO they have not had a routine role in monitoring and evaluating the program; (12) under HUD's management reform initiative, the field offices will have a greater role in assisting the zones and monitoring their activities; (13) USDA involved its field office representatives in monitoring and evaluating the program by requiring the rural zones to submit weekly progress reports to field office representatives for their review; (14) HUD and USDA subsequently issued regulations covering the program, provided guidance to potential applicants, and conducted informational workshops across the country; and (15) both agencies are currently evaluating communities' applications for designation, and expect them to be made by January 1, 1999.