by Heather Filiberto
After many years of broad-based community support, and a few failed attempts, Tompkins County was finally awarded an Empire Zone on July 30, 2006. The original intent of this powerful State incentive program was to encourage private sector investment in blighted areas. Thanks to legislative changes in 2001 and again in 2005, the Program was expanded to stimulate economic growth in targeted areas by offering State tax incentives to new and existing businesses that are creating quality jobs.
The Program offers a range of State tax incentives for qualifying businesses: wage tax credits, investment tax credits, and employment incentive credits. For businesses that pass an annual employment test that shows job growth since they began participating in the Zone Program, there are additional income tax credits for real property taxes paid and a businesses tax credit. Businesses passing the employment test may also be eligible for an exemption from State sales tax on purchases of goods and services including vehicles and utilities.
For the right companies, with the right project at the right time, the Zone program can deliver substantial benefits. The Program does require a little patience and a little paperwork. A business must be located in one of six sub-zone areas in Tompkins County, it must meet minimum job creation and investment thresholds, and then it must apply for Zone Certification to participate in the Program. Once a business is certified to participate, incentives can be obtained each year for ten years as long as qualifications for the various incentives are met.
It is important to note that, unlike most other business incentive programs, the majority of Zone incentives are allocated at tax time and they are based on actual jobs created and investments made. Businesses apply for Zone Certification based on their projected growth over the next five years, but they don't get receive any benefits until they've actually created jobs or made capital investments.
Another unique aspect of this program is that it is funded by New York State - most economic development tools we rely on such as tax abatement programs and low interest loan programs either reduce local tax payments or rely on local tax dollars for funding. With the addition of the Empire Zone Program here in Tompkins County, we have effectively increased economic development assistance to businesses without relying on local tax dollars. Now we can better targeted locally funded programs.
We are committed to using this program wisely. TCAD manages the program for the County and a Zone Administrative Board provides oversight. At the local level, we have adopted a Zone Development Plan that sets goals and priorities for the Zone, identifies the types of businesses that can participate in the program, and identifies performance measures to chart our progress.
In Tompkins County we are primarily focused on the growth of advanced technology and manufacturing firms in the Empire Zone. In general, we will accept applications to certify R&D, hi tech industries, software companies, and manufacturing firms. In the Downtown Zone we will also support certain types of retail/commercial services and professional offices, as well as restaurants, entertainment related businesses and tourism destination facilities.
The program is already proving to be a success in its first year. At the end of 2006, two businesses were certified to participate in the Zone Program in Tompkins County. Vanguard Printing invested $2 million purchasing the assets of Wilcox Press, one of the largest commercial printers in Central New York, and hired 129 employees. If it weren't for Vanguard, those jobs would have been lost when Wilcox closed its doors. Vanguard received $105,000 in Empire Zone incentives that year. Incodema, a manufacturer that produces custom sheet metal stampings, invested $774,000 in new equipment in 2006. They received $105,000 in Empire Zone tax credits.
In the first half of 2007, eleven businesses have been Zone Certified. These companies include Novomer, a hi tech manufacturer that makes polymers and plastics from carbon dioxide and other renewable materials; Concept Systems, proving consulting and facilitation services in the areas of organizational planning, project design, development and evaluation; and Class Act Kitchen and Bath Design Center, specializing in retail, design and installation of new kitchens and bathroom. These eleven businesses anticipate creating 146 jobs and investing $14 million over the next five years.
For more information about the Zone program, call TCAD at 607-273-0005 or visit our web site at www.tcad.org.
8/13/07
Heather Filiberto
Empire Zone Coordinator
Tompkins County Area Development
Originally appeared in the Ithaca Journal's Business Journal
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Tompkins County Empire Zone Benefiting Businesses in First Year
Tompkins County Area Development
200 East Buffalo Street, Suite 102A Ithaca, New York 14850 ( 607 ) 273 - 0005 |