Economic development officials put businesses on notice

NORWICH – One-third of the 74 businesses certified in the “Greater Norwich Empire Zone” have been put on notice buy the state’s top economic development office for falling “substantially short” of projected job growth and investment goals.

In total, Empire State Development sent notifications to 3,000 zone businesses that haven’t met at least 60 percent of the self-projected figures they offered when first applying for the taxpayer-funded program.

The letters, issued after an audit of 2005 annual business reports, indicate that unless improvement is shown, notified businesses could lose their Empire Zone certification. This is the first phase under the department’s new leadership to reign-in the tax credit program, an Empire State Development spokeswoman said.

“This is just data. There has been no interpretation of the numbers done,” said spokeswoman Stefanie Zakowicz in a phone interview. “By sending out these letters, the department is taking the first steps in getting our arms around the program.”

She would not comment on whether or not the department believes Empire Zones have been successful to date.

The program is meant to foster business growth in economically depressed areas. Businesses that are approved within the “Empire Zone” can earn tax relief on wages, investments, property tax and sales tax. For instance, for every new job, an employer can pay $1,500 to $3,000 less in state taxes on that wage. Businesses can also receive decreased utility rates.

According to Empire State Development’s website, “a business must be able to demonstrate that it will create new jobs and/or make investments in the empire zone and be consistent with the local zone’s development plan, including a cost-benefit analysis.”

The Greater Norwich Empire Zone

Locally, 28 zone businesses were put on notice by the state.

Although that list is considered public information, Greater Norwich Empire Zone coordinator Jennifer Tavares declined to release it.

“We would like to cooperate, but we must respect the privacy of our clients,” Tavares stated via e-mail.

The Evening Sun obtained the list of local businesses and the tax credits they’ve received from Empire State Development directly.

Here’s how it looked:

• Half of the businesses, while on notice for not meeting job and investment goals, received $0 in tax credits as of 2005.

Maureen Carpenter, Commerce Chenango president and CEO, said that figure indicates some businesses either signed up for the program not needing it, or they decided to move their business in a new direction, relying on technology rather than employees.