State axes business friendly Empire Zones

07/22/2010 12:00 AM |

The Empire Zone is no more, leaving Riverhead Town without an incentive program that was intended to draw new businesses specifically to the Enterprise Park at Calverton.

The state Legislature voted to end the program as of June 30.

Its replacement, called the Excelsior Jobs program, provides some of the same incentives to businesses but doesn’t have the Empire Zone’s geographic boundaries, meaning that areas like EPCAL no longer have an incentive program that other areas did not.

“The Excelsior Program is not geographically bound, unlike the former Empire Zone Program,” said Katie Krawczyk of the Empire State Development corporation. “Rather, it provides job creation and investment incentives to companies in targeted industry clusters, regardless of geographic region.”

State officials have been critical of the Empire Zone program in recent years, saying that in some parts of the state, businesses received tax incentives but never provide the jobs or economic benefit they had promised.

Riverhead Town received Empire Zone designation for EPCAL in 1997 and later extended the program to parts of downtown Riverhead. Gabreski Airport in Westhampton and parts of Wyandanch also were later added to the town program, which was done in conjunction with Suffolk County.

“Going to the Excelsior program is not in our best interest and, eventually, the Empire Zone will completely wither away,” said state Senator Ken LaValle (R-Port Jefferson), who opposed the change.

Most businesses that received Empire Zone credits had 10-year contracts, and many were drawn to certain locations by those credits, Mr. LaValle said. Now, he said, once those contracts expire, they will receive no further credits.

“It puts Riverhead at a disadvantage,” said Tracy Stark, who is the coordinator for the Riverhead Town/Suffolk County Empire Zone.

So what happens to companies that already had Empire Zone benefits?

“Companies that were entered into the program on or before June 30, 2010, will remain in the program for the remaining life of their benefits, typically about 10 years from the time a company is first granted entry,” Ms. Krawczyk said.

Mr. LaValle said the state “took a $420 million program and made it a $50 million program. They have cut benefits for those people who are getting the benefits now and those reduced benefits will be for the next three years.”

But Ms. Krawczyk said “the Empire Zone benefits were not reduced in any way. The only change made to the existing program were no companies were granted entry after June 30, 2010.”

Officials say there is a proposal in the state Legislature that would defer existing Empire Zone credits by three years. That bill has not yet been approved.

“Welcome to New York State,” Riverhead Supervisor Sean Walter said facetiously when told of that proposal.

Riverhead Town still has an Industrial Development Agency, which can offer similar incentives to draw businesses to the town.

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