More than 500 businesses across the state are at risk of losing their Empire Zone status, including the Scotia Industrial Park, which is owned by the Galesi Group. Businesses had until Tuesday, July 21, to file a revocation appeal.
The state is kind of judging projects and saying, ‘You have to meet certain criteria to stay in the program,’ said Ray Gillen, chairman of Schenectady Metroplex.
New York’s Empire Zone program was created to stimulate economic growth through tax incentives designed to attract new businesses to New York and enable existing businesses to expand and create more jobs. To participate in the Empire Zones Program, a business must first be located in an Empire Zone or qualify as a regionally significant project and become zone certified. To qualify for certification, a business must be able to demonstrate that it will create new jobs or make investments in the Empire Zone and be consistent with the local zone’s development plan, including a cost-benefit analysis, according to the Empire Zone Designation Board’s Web site.
For example, for every dollar the incentive provides a business, businesses must match the incentive with at least a dollar. Gillen and Dave Buicko, chief operating officer of the Galesi Group, said they believe the Scotia Industrial Park has a strong case in its appeal.
`In the Scotia Industrial Park, for every dollar in incentives [they have received], the developer has invested over $55 dollars. It’s a 55-to-1 ratio. It’s a very strong case,` said Gillen. `The owners of the park have shown a major investment and commitment to that park and well in excess to what the state requires. We hope that when the state looks at this they’ll wind up approving it and moving forward.`
There are also three new grounds for decertification, according to the Empire Zone’s Designation Board.
`Shirt-changers,` or businesses reincorporating prior to Aug. 1, 2002 in order to maximize tax benefits, will be decertified. Businesses in the Empire Zone program for a minimum of three years having a benefit-to-cost ratio of less than 1-to-1 will be eliminated from the program, as well as those with a change in ownership or those that leave the Empire Zone.
`One of the distinctions here is that the property is still in the zone,` said Buicko. `The acreage in the property and tenants that are utilizing the Empire Zone can still qualify.`
He said that Scotia Industrial Park is in the Empire Zone. According to Buicko, land doesn’t get decertified.
`So any tenant ` let’s take XYZ Company that locates there ` they can get zone certified,` said Buicko. `We’re very comfortable that we’ve complied with the law, and we’re very comfortable that New York state will do the right thing when the facts are presented.`
`It seems to be they’re targeting developments run by large developers. That seems to be a common thread,` said Gillen. `I think once the state understands what’s going on out there they’ll approve this but it’s too early to say.`
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