CITY MAY EXPAND ENTERPRISE ZONE; LANCASTER CONSIDERS BID TO ATTRACT BUSINESS FOR FUTURE SPACEPORT.

Byline: Jim Skeen Daily News Staff Writer

Lancaster officials will look at expanding the area's enterprise zone into the southern portion of Edwards Air Force Base to help position the Antelope Valley to become a spaceport in the 21st century.

Officials want to enlarge the enterprise zone, in which businesses are eligible for special state tax credits, to include an additional 3,541 to 3,760 acres, mainly between 140th and 210th streets east and avenues B and C.

Enterprise zone benefits could then be used as an incentive to bring in developers of various space-related projects.

``We need this site to be competitive,'' Stafford Parker, Lancaster's redevelopment agency director, said.

One possible user of the expanded zone is the VentureStar, a proposed reusable spaceship being developed by Lockheed Martin ``Skunk Works'' in Palmdale. The company is now building the X-33, a suborbital craft that will test technologies needed to build such a spaceship.

A number of other space-related projects are on the horizon that could benefit from being in an enterprise zone, said Bob Johnstone, an aerospace consultant for Lancaster.

Among those is a proposal to develop reusable space booster rockets that would fly back to their launch point rather than being dropped into the ocean, like the space shuttle's boosters.

Lancaster City Council will consider going after expanding the enterprise zone at its meeting 7 p.m. Tuesday at City Hall, 44933 Fern Ave.

If the council gives the go-ahead, city administrators would then have to work with the city of Palmdale and Los Angeles County to submit an expansion proposal to the state Trade and Commerce Agency.

The Antelope Valley became an enterprise zone on Feb. 1. For the next 15 years, businesses in the enterprise zone are eligible for state tax credits, including credits on equipment purchases, interest deductions for lenders making loans to a business in the zone, and hiring credits for workers hired through certain programs.

The existing Antelope Valley enterprise zone covers more than 60 square miles and includes virtually all commercial and industrial property in Palmdale, Lancaster and the unincorporated Los Angeles County portions of the Antelope Valley.

With the zone, the Antelope Valley can offer such incentives as tax credits for sales or use taxes paid on the first $20 million of equipment or machinery purchased, deductions for interest income earned on investments, and wage credits employees may take on their individual tax returns for earning from a firm located in the zone.

Companies will also be eligible for a hiring credit for wages paid to employees hired through specific programs during the first five years on the job - a potential credit of up to $24,000.