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FACT 1.55 State questions Empire Zone commitments: Some companies getting breaks dispute claims of shortfalls [Albany Times Union, N.Y.] Knight Ridder/Tribune "Business News "
Aug. 1 -- ALBANY -- State economic development officials are sending letters to about 230 Capital Region companies they believe have fallen short of the job or investment commitments they made to the Empire Zone tax break program.
A number of companies disputed claims by officials of Empire State Development Corp. , which sent the letters and administers the program.
A local sampling of Empire State Development reports show a First Albany Capital employment shortfall of 161 jobs, Cyclics of Schenectady's shortfall of 20 jobs and Regeneron Pharmaceuticals of East Greenbush with a $980,000 investment shortfall.
Wal-Mart officials criticized their inclusion on the list, which says the giant retailer has missed investment goals for its Johnstown distribution facility by $41 million .
The company has already invested $80 million in the project, said Phil Serghini, a Wal-Mart spokesman.
"This whole thing is completely bogus," Serghini said. "We look forward to getting the letter. We fulfilled what we have promised."
Empire State Development said Monday it is sending letters to 3,000 companies in the state that it believes are falling "substantially short" of job creation or investment promises made in return for receiving Empire Zone benefits.
By using data about the 3,000 companies collected by ESDC, the Times Union was able to identify roughly 230 Capital Region companies that ESDC has targeted.
Regeneron Pharmaceuticals in East Greenbush has missed its investment targets by $980,000 under the Empire Zone program, according to the letters.
Regeneron officials contacted by the Times Union Tuesday said they were unaware of any shortfall but declined further comment.
Jay Sherman, Empire Zone coordinator for Rensselaer County, said he was under the impression that no Rensselaer County firms are being targeted by Empire State Development. He said he recently told participants that the state was happy with their performance.
"If there has been a change, I will stand corrected," Sherman said.
Empire Zones were created by the state in 1986 to help stimulate economic growth in poor areas with high unemployment. The program was significantly expanded and widely used under Gov. George Pataki's administration.
Companies which failed to meet at least 60 percent of their goals -- based on an audit of their 2005 business annual reports filed with ESDC -- are getting the letters.
The Empire Zone program has come under fire from consumer advocates, and the new administration of Gov. Eliot Spitzer has vowed to take a close look at its benefits and shortcomings.
A Times Union analysis of the program in April found that Capital Region companies reap nearly $40 million in annual tax breaks from their inclusion in Empire Zones.
Patrick Foye, co-chairman of Empire State Development, said in an interview Tuesday that the Empire Zone program has had a lot of success over the years in creating jobs in the state.
But he said the letter-writing campaign is designed "to put companies on notice." ESDC will look at the companies' 2006 annual reports to see if progress has been made on meeting their goals.
"We're asking for information," he said. "We're going to monitor this closely."
Foye said each case will be looked at separately, especially since some companies may have legitimate reasons for missing targets, such as a natural disaster. Some companies found in default may have to repay benefits they might have received. Rulison can be reached at 454-5504 or by e-mail at [e-mail].
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Copyright (c) 2007, Albany Times Union, N.Y.
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