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No EZ Answers

The empowerment zone program held lots of promise. So why didn't it deliver?

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This story appears in the July 2007 issue of Entrepreneur. Subscribe »

When entrepreneur Chuck Morris heard that Knoxville, Tennessee, was selected as a federal Empowerment Zone in 1999, he was understandably excited. His marketing communications firm, Morris Creative Group, seemed to be in a prime position to benefit: It was located in a historic building in the heart of the zone. Morris hoped he could use the program to get a low-interest loan to expand his business.

He didn't qualify, however, because neither he nor his employees lived in the zone. It was a big disappointment. "One of the promises of the Empowerment Zone was access to more capital," says Morris, 40, whose annual revenue is about $1 million. "That would have been an extraordinary opportunity for us, but there was no flexibility in the basic rules."

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