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Zone changes no help to NNY

TIMES STAFF WRITER
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Gov. David A. Paterson on Thursday announced the launch of a new tax incentives program for companies setting up shop or expanding in the state, but north country officials say it probably will not help businesses here.


"We continue to be concerned that many of the programs in the Excelsior Jobs program leave us out because of our size," said Raymond H. Fountain, St. Lawrence County Industrial Development Agency chief executive officer. "If you look at the number of jobs to be created to qualify, that's a large number of jobs for rural areas."


The tax incentives program, which is intended to replace the Empire Zone program, targets industries such as biotechnology, pharmaceuticals, high-tech, clean and green technology, financial services, agriculture and manufacturing. The program recognizes the same geographic areas Empire Zones cover, but calls them "investment zones."


It offers tax credits of up to $5,000 per new job created, a 2 percent tax credit on qualified investments, a 10 percent credit for new investments based on the federal research and development credit, and a real property tax credit for firms locating in distressed areas and in targeted industries that meet higher employment and investment thresholds.


To qualify, however, businesses have to meet job creation standards: 25 new jobs for manufacturing, 10 jobs for agriculture, 100 jobs for financial services data centers, 10 for scientific research and development businesses, 10 for software development, and 150 for back office operations or distribution centers. Businesses that cannot meet those standards must have at least 50 full-time equivalent positions with a cost-benefit ratio of 10 to 1, meaning the benefits from the jobs must be 10 times the value of the state tax breaks.


"Any time you limit a program to that large a number of jobs, it will be difficult for small communities to compete," said Donald C. Alexander, Jefferson County Industrial Development Agency chief executive officer. "Our job growth is one job at a time."


He did credit the program with clearer amounts on the benefits businesses could receive and the emphasis on research and development. Many of the industries targeted require substantial educational backgrounds, such as biotechnology and pharmaceuticals.


"They are associated with larger populations or more school-based associations, which we don't have a lot of, at least in the north country," he said. "It does refer to manufacturing and agriculture, and we need all that, but there are other things that could and should deserve focus."


It's not clear whether the local Empire Zone boards will have any involvement in the new program.


"There hasn't been any specific direction about it," said Rachel A. Selsky, Watertown Empire Zone coordinator at Camoin Associates, Saratoga Springs.


The boards and coordinators still will do housekeeping for the remaining businesses in the Empire Zone program, filing annual reports and other tasks.


Frederick H. Hanss, Potsdam planning and development director, said all businesses that qualified for Empire Zone credits before the program expired will continue to receive them over the 10-year life of their designation. He said only large businesses that previously qualified for zone status, such as Newton Falls Fine Paper or North Lawrence Dairy, would have a shot at qualifying for Excelsior.


"I think pretty clearly the intent here was to get a program established that would develop jobs along the Thruway corridor," Mr. Hanss said. "It's clearly not an economic development program for the north country."


Eric J. Virkler, Lewis County's director of economic development, said officials from Empire State Development Corp. are suggesting that they have other funding programs and will work with north country officials to promote development.


However, unlike with the Excelsior Jobs program, available funding for other state economic development initiatives has not been determined and some, such as the Restore NY redevelopment program, have been discontinued, Mr. Virkler said.


"One size doesn't fit all, and they're aware of that," Mr. Fountain said. "I don't think there's any intent to ignore rural areas. I think we just have to be diligent at looking at businesses in our counties and be active in pursuing assistance from the state."


Times staff writers Nancy Madsen and Steve Virkler contributed to this report.

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