by Heather Filiberto
2007 marked the first full year of the Tompkins County Empire Zone, a New York State tax incentive program designed to attract new businesses and support existing businesses that expand and create jobs. The Program offers tax incentives for up to ten years to qualifying businesses locating or expanding within Zone designated areas, including a sales tax exemption, and real property and business tax credits.
The State designated the Tompkins County Zone in August of 2006 and by all measures, the first full year of the Zone exceeded expectations! Over 1,200 businesses and property owners located in the six sub-zone areas were notified of the Zone designation and given opportunities to learn more about the program at a widely attended workshop and several smaller presentations. A Zone Development Plan was adopted to guide decision-making. The State increased the Zone’s administrative funding allocation by 150% as a result of very high marks on our first annual performance review.
To participate in the Empire Zone Program, a business must be located in one of six sub-zone areas in the county, meet minimum job creation and investment thresholds, and then apply for Zone Certification. Unlike most other business incentive programs, Empire Zone benefits accrue in the form of income tax incentives after the jobs are created and investments made. Businesses apply for Zone Certification based on their projected growth over the next five years, but they don’t receive any benefits until they’ve actually created jobs or made capital investments.
One of the businesses that was Certified in 2007 was BinOptics Corporation. The company designs and manufactures compound semiconductor photonic devices that are used in telecom and datacom applications, such as fiber-to-the-home, high-speed Ethernet and optical data storage applications, including DVD players and game consoles. BinOptics' headquarters, semiconductor manufacturing and engineering operations are located in the Cornell Business & Technology Park. The company also has engineering and sales offices in Alhambra, California and Hong Kong. The workforce in Ithaca has grown from 14 to 30 employees in the last four years and is projected to double over the next five years, during which time the company plans to make capital investments of over $1.7 million. Based on these growth projections, BinOptics could receive as much as $340,000 in tax credits over the next five years.
The Tompkins County Empire Zone is primarily focused on the growth of advanced technology and manufacturing firms. However, the Downtown Ithaca sub zone area will support certain types of retail and commercial service establishments as long as they are projecting job growth and investment. Home Green Home, a new retail store on The Commons that specializes in sustainable home furnishings, floor and wall coverings was certified in 2007 projecting three new jobs and $76,000 in capital investments over five years. Fine Line Bistro, serving an eclectic late night menu on W. State Street, applied for Zone Certification in 2007 projecting the creation of nine full time equivalent positions and investments of $125,000 over five years.
Of course, the largest measure of success for the Empire Zone is the dollar value of the tax benefits that accrue to Zone Certified businesses each year. Just two businesses were certified at the end of 2006 as we were scrambling to get the Zone officially up and running. Based on the Business Annual Reports submitted for 2006, they employed an average of 131 people with overall annual capital investments of $2.8 million and realized total Empire Zone tax credits of $98,000.
In 2007, thirty-four businesses were certified to participate in the Empire Zones Program. Together, they project creating 762 new jobs and making $91 million in capital investments over the next five years. We should see dramatic increases in the number of jobs, capital investments and corresponding state tax incentives for the 2007 tax year as a result of the increase in participating businesses from just two in 2006 to thirty-six at the end of 2007.
For more information about the Zone program, call TCAD at 607-273-0005 or visit our web site at www.tcad.org.
Originally appeared in the Ithaca Business Journal
|
Empire Zone Exceeds Expectations in First Full Year
Tompkins County Area Development
200 East Buffalo Street, Suite 102A Ithaca, New York 14850 ( 607 ) 273 - 0005 |