The Empowerment Zones were created in 1993 under Clinton's administration, demonstrating a commitment to solving tough socio-economic problems in distressed communities. The main objective associated with this program was economic recovery of distressed communities by creating jobs and providing various services to the indigenous populations. The designation of the Empowerment Zones went in three rounds (1994, 1998, and 2001), and although the types and amounts of federal incentives varied across rounds, the four principles around which the program originated remain unchanged: strategic vision for change, community based partnerships, economic opportunity, and sustainable community development. Since its inception, the Empowerment Zones program has been implemented in 30 urban and 10 rural communities in 27 states across the U.S. Two central questions lead the research of this dissertation project: 1) What have been the main accomplishments of the round three federal Empowerment Zones program in Tucson? 2) What have been the main challenges of the round three federal Empowerment Zones program in Tucson? By using a case study research design and various techniques for data collection and analysis (including the program package Atlas.ti), this study examined the accomplishments and the challenges associated with the round three designated Empowerment Zone in Tucson. Evidence was collected from multiple sources, including 24 interviews, over 60 local newspaper articles, relevant documentation, annual performance reports, and other sources. The analysis reveals that the program's implementation in Tucson was strong in the beginning, but after two years, the earlier success started to fade quickly. The shortcomings of program design became evident during the implementation phase and further in the inability of the administration to collect relevant data to demonstrate the program's success. The consequences of the inability to provide data for program evaluation influenced the enthusiasm of the administrators and program partners, and weakened the political support. The reduction in the grant component contributed to overemphasis of the business development component thereby ignoring most community development aspects essential for the success of the program in Tucson. This study did not find evidence for the claim that round three of the empowerment zones program based on federal tax incentives contributes to the creation of new jobs and the attraction of new business in economically deprived communities in Tucson.