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Midtown Plaza Enjoys Empire Zone Status
March 15, 2007
Brian Sharp
Staff writer
Tax break database: Jobs for money 2003-05 records show $64M in local Empire Zone considerations for businesses
Rochester and Monroe County businesses received a combined $64.5 million in state tax breaks during 2003-05, according to never-before-released state Empire Zone records.
Calculating the corresponding benefit in jobs created is more difficult. By the most generous estimate, the tally is 3,631. Most of the jobs were created in the city, records show, yet the county zone has seen more dollar growth.
Suburban businesses claimed $12.6 million in tax credits in 2005, making Monroe County the eighth most lucrative Empire Zone in New York state.
The Mall at Greece Ridge and Corporate Woods, a Brighton office park,
led the way. Rochester was 10th statewide with $12.1 million in tax breaks, paced by Harris Corp., Midtown Plaza and High Falls Brewing Co., according to a Democrat and Chronicle analysis.
The state released its Empire Zone records this week after losing a court battle with The Post-Standard of Syracuse. According to The Associated Press, the Syracuse newspaper first sought that data under the state's Freedom of Information Law in August 2005, when Republican Gov. George Pataki controlled the Department of Economic Development. Then-Attorney General Eliot Spitzer defended Pataki's decision not to release the data. As
governor, Spitzer has decided not to appeal.
Critics of Empire Zones charge the program has doled out hundreds of millions of dollars in tax breaks yet produced 50,000 jobs in two decades. The program has ballooned from $30 million in 2000 to an estimated $558
million this year, The Post-Standard reported. Empire State Development could not confirm the program's size Wednesday.
Records show that in 2005 Ö the most recent year for which data are available Ö Empire Zone businesses reported 26,600 jobs created and claimed $470 million in tax credits, equating to about $17,700 for each new hire.
"I think this program started off as an urban program whose specific design was the creation of jobs," said Philip Banks, Rochester's deputy commissioner for economic development. "Somewhere down the line, it lost its true intention."
Buffalo led all zones in 2005 with more than $42 million in tax breaks, with businesses reporting 1,863 jobs created Ö nearly $18 million and 621 jobs more than Monroe County and Rochester combined.
Earlier this year, the state retained a consulting firm that is reviewing the Empire Zone program, along with the state's other economic development initiatives. The program underwent significant adjustments in 2002 and 2005,
but more changes are expected, Empire State Development spokesman A.J. Carter said Wednesday.
Judy Seil is acting director of planning and development for Monroe County. She cites success stories such as CareGuide Inc. The health management company bought out and was prepared to close its Rochester-based
competitor, PatientInfoSystems, in early 2006. The company would have transferred 42 jobs to its Florida headquarters. But, thanks largely to the Empire Zone and other economic incentives, CareGuide chose to move
to Henrietta instead, moving 200 new jobs here.
"We've seen only good things," Seil said, attributing the uptick in state tax breaks being claimed to more businesses being involved. "Having the zone was critical to them being able to expand in our community."
Businesses must get local government support to be included in an Empire Zone. Tax breaks are only at the state level and are calculated based on annual progress reports submitted by each business. Before being certified,
each business also must submit a projection of how many jobs it will create and the investment it expects to make in the community.
Greece Town Mall LP averaged $3 million in tax breaks over the three-year period for a total of $9 million, the most of any company in the Monroe County or Rochester zones. State records show the group, certified in 2002,
projected 22 new jobs and a $10 million investment.
Through 2005, the totals were 3.25 positions and nearly $5.3 million invested.
"(Companies) have to do something in order to get those tax credits," said Randal Koburn, director of the Empire Zone program. "The issue has always been, would we closely monitor and hold them accountable for their
projections at the time of certification, where what they actually get is based on what they actually do."
In Rochester, Harris Corp. projected 125 jobs and a $1 million investment and was certified in 2003. After three years, the company reported job growth at more than 300 positions and a total investment of $25.6 million, the state reported. Records show it claimed tax breaks of $1.2 million.
The largest tax breaks in the city zone went to High Falls Brewing Co., which received nearly $3.5 million over the three years. According to the state, the company was certified at the end of 2000 and reported having 469 jobs in
2001, but 332 by the end of 2005, and reported investments of $23 million during that period.
Thomas Hubbard is chairman of High Falls Brewing. Loss of a major contract in 2002 caused the job loss, but total positions are on the rebound, he said, up to about 360 today.
The Empire Zone "has been critical to the survival of High Falls Brewing Company," he said Wednesday night. "We continue to have our challenges, but we believe without the Empire Zone we would not have been in a
position to sustain ourselves."
Midtown Properties LLC, has claimed $2.9 million in tax breaks while reporting 47 new jobs and $129,000 invested. Each year, tax breaks exceeded gross wages paid. Midtown and other businesses and investors
mentioned here were not contacted for this story.
"Keep in mind, some of what we did was strategic in nature, based on what we thought the future would bring," Banks said, explaining that the city backed Midtown Plaza's inclusion in an Empire Zone in 2002 expecting the
property would be sold and redeveloped.
BDSHARP@DemocratandChronicle.com
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The Top 5
Listed below and separated by Empire Zone
are the businesses that claimed the greatest
state tax credits for 2003-05 combined:
�� Rochester
High Falls Brewing Co. LLC: $3.46 million
Midtown Rochester Properties LLC: $2.92
million
Rochwil Associates: $1.66 million
Gateway Business Center LLC: $1.31 million
Harris Corp., RF Communications Division:
$1.24 million
�� Monroe County
Greece Town Mall LP: $9.02 million
Corporate Woods Associates LLC: $3.41 million
Continental Industrial Capital LLC: $3.24 million
Genecor International Inc.: $1.48 million
Celltech Technologies Inc.: $1.44 million
Source: Empire State Development,
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