Detroit to apply for federal 'Promise Zone'

David Shepardson
Detroit News Washington Bureau

Washington — The city of Detroit plans to apply to become one of the Obama administration's eight or more new "Promise Zones" — an effort launched in January to aid the nation's struggling cities, rural areas and tribal nations.

The new round of applications is due Nov. 21 — with at least six planned for urban areas, one in a rural area and one tribal nation. Rep. Gary Peters, D-Bloomfield Township, said in a conference call with three cabinet secretaries announcing the next round that Detroit is planning to apply — after the Motor City didn't apply for the first round announced in January.

"We know that there are many communities that have been underserved," said HUD Secretary Julián Castro Friday, adding applicants must come up with a detailed plan on how they will take advantage. HUD and the U.S. Agriculture Department led the review of applications. Agriculture Secretary Tom Vilsack said the government encouraged unsuccessful applicants in the first round to "beef up" their applications and reapply

The designation provides technical support from the federal government, and gives communities a leg up in winning new federal grants but they don't receive direct funding under the designation. The city of Detroit has been getting similar assistance since it filed for bankruptcy in July 2013 with a wave of government agencies sending officials to the city to offer technical help — on lighting, housing, development and other challenges.

"We are actually in the process of putting together an application in Detroit," Peters said. "I believe we're putting together a very strong application."

Peters said the city has convened foundation leaders and others like religious and business leaders, and community advocates to help in its application.

"This is really a powerful way to bring different people together who all care deeply about the community," he said. "All have visions of where we can be as a community."

In recent months, the White House has scaled back its efforts on the ground in Detroit — though it continues to send high-profile administration members to visit.

Gratiot near Ludden in Detroit.

In January, President Barack Obama announced the first five Promise Zones: San Antonio, Los Angeles, Philadelphia, southeastern Kentucky and the Choctaw Nation of Oklahoma.

The administration says the winners "will receive preferred access to certain competitive federal investments that further their strategic plans, federal staff on the ground to help them implement their goals, and five full-time AmeriCorps (participants) to recruit and manage volunteers to strengthen the capacity of Promise Zone partners. Promise Zones focus on helping communities work together and partner with the federal government to meet their goals," the administration said in a fact sheet.

Earlier this year, the administration said it plans to name 20 Promise Zone cities over the next four years.

The Treasury told Congress in April 2013 it wants an employment tax credit of $15,000 of qualifying employee wages. "The credit rate would be 20 percent for zone residents who are employed within the zone and 10 percent for zone residents employed outside of the zone," Treasury said, and it wants faster depreciation rules of property.

Areas must have high poverty or unemployment rates to qualify.

"Each Promise Zone is pursuing strategies that have been shown to achieve results. Each has identified clear outcomes it will pursue to revitalize the community, with a focus on creating jobs, increasing economic security, improving educational opportunities, and reducing violent crime," the administration said.

The administration backs a bill sponsored by Rep. Peters and Sen. Bob Casey, D-Pa., for "tax cuts on hiring and investment in areas designated as Promise Zones — based upon the proven model of Empowerment Zones tax credits — to attract businesses and create jobs."