Since Sept. 11, the news on the local and state economy has gone from bad to worse. So the last thing anyone would expect to hear these days is good economic news from South Central Los Angeles.

But there is. With much fanfare, city and state officials and business leaders hailed the recent opening of the First African Methodist Episcopal Church’s Business Incubator. Bankrolled by grants from city and state agencies, and donations from State Farm, Wells Fargo and Washington Mutual, the incubator will provide space for start-up minority-owned businesses. State Farm and Wells Fargo also said that they would lease office space in the building.

The timing couldn’t have been better. With city and state officials scratching for every bit of revenue they can find to make up for budget shortfalls, the new start-ups will add more business and sales tax revenues to their coffers.

They also provide a virtual risk-free, low-cost way to provide jobs and create opportunities without having to shell out rapidly shrinking public and private dollars for more costly job training and development programs.

This is important given the fact that the terrorist related layoffs slammed South Central especially hard. Many of the displaced airport, restaurant, and hotel workers were Latinos and African-Americans. At a recent L.A. city sponsored job for laid-off workers, the overwhelming majority of the 3,000 job seekers who turned out were minorities.

This stunning reversal of economic fortune has been long overdue. For nearly a decade since the 1992 riots, residents and businesspersons watched in dismay as city and state agencies, along with corporations, poured millions into development projects throughout L.A. County. They were perplexed at the long parade of newly built shopping centers, malls, and industrial parks that created thousands of new jobs, but none in their neighborhoods.

They were angered by the broken promises of retailers to relocate new businesses in their area. They were livid that much talked-about redevelopment projects got stalled in personal and political bickering.

The prime reason for the area’s perennial blight and stagnation is that major retailers and city officials swallowed whole the stereotypes that crime and drugs have made South Central L.A. an impenetrable wasteland. The truth is exactly the opposite.

The area is a huge, untapped cash cow that can yield colossal financial rewards for those companies willing to shed their blinders. Various studies show that black and Latino consumers spend a bigger percentage of their earnings on goods and services than do whites. And despite media reports to the contrary, crime rates have fallen to near record lows in South Central L.A.

Though the stereotypes are still very much alive, more businesses have finally kicked the post-riot syndrome and upped their investment. FAME’s business incubator can provide a solid model for building partnerships involving government, the more enlightened corporations and banks, and small minority-owned businesses.

The good economic news from South Central L.A. can’t erase the local fears in the aftermath of Sept. 11. But it’s news that we need to hear, and it’s news that can provide a little bit more hope for many in our city.

Earl Ofari Hutchinson is an author, commentator and KPFK radio talk show host.