Two companies operating in local Empire Zones were listed among 26 that were announced Tuesday as being slated for “decertification” by the Empire State Development Corp.
In the Schenectady/Glenville Empire Zone, First Niagara Centre, the holding company that owns First Niagara Bank, was found by ESD officials to have “fallen substantially short of the jobs or investment projections made in return for receiving Empire Zone benefits” for the First Niagara Bank branch at 251-263 State St.
In the Troy Empire Zone, a company called Hudson River Place LLC has been listed for decertification. The company had promised to create two jobs, but ESD officials said they have not created any new positions.
According to ESD officials, 171 companies were identified throughout the state earlier this year that had provided “the least economic return to the state compared to the zone benefits they were receiving.” Each company was sent a letter and asked to contact ESD and explain the reasons for continued “noncompliance.”
According to ESD officials, the notifications sent to companies are part of a review process that began in July and marks the first time in the program’s history that Empire Zone-certified companies have been informed that they were out of compliance with the job and investment projections they made when they applied for zone certification.
“These reforms demonstrate our resolve to ensure that state tax dollars are spent wisely to achieve the maximum economic development returns to benefit all New Yorkers,” said ESD President Avi Schick.
The 145 companies who responded to the notification are in communication with ESD officials and in the process of having their reasons reviewed for final determination.
The 26 companies targeted for decertification Tuesday were the companies that did not respond to the ESD letters, officials said.
Schenectady/Glenville Empire Zone coordinator Steven Strichman said the 251-263 State St. property was first certified for Empire Zone status in 2001 under the ownership of a company called Hudson City Centre, which has since sold the property to First Niagara Centre Inc.
To become certified for Empire Zone status, Hudson City Centre projected the creation of three new jobs at a bank operation at that property. Only one full-time job was ever created, according to the Empire State Development Corp.
Strichman said the Empire Zone rules in place in 2001 allowed a company with Empire Zone certification to receive a $10,000 property tax credit for each job created. He said since one job was created at the property and has not been eliminated, the $10,000 property tax credit has remained in place each year since 2001.
First Niagara Centre officials could not be reached for comment Tuesday.
Strichman said the Empire State Development Corp.’s decertification efforts will not affect the size of Empire Zones.
“This wouldn’t take the building out of the Empire Zone; [the Empire State Development Corp.] is taking the certification away from the zone. So somebody else could [buy the property] with some other plans and would be technically eligible to recertify,” Strichman said.
Troy Empire Zone officials could not be reached Tuesday afternoon for comment.
Empire State Development Corp. Upstate Communications Director Patricia Pitts said companies that are decertified will not be able to claim tax credits going forward from the decertification effective date, but no retroactive penalty to reclaim past tax benefits is currently being sought.
However, the companies can appeal in an effort to stop the decertification process.
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