Big names on Empire Zone's 'potential decertification list'

By Dan Hust
SULLIVAN COUNTY — The state has released a list of local businesses that face potential decertification from the Empire Zone program.
Notable companies like the Villa Roma and Home Depot are among the 18 names, but EZ Coordinator Susan Jaffe said that doesn’t mean they’ll lose the tax breaks offered by the Zone.
“The state is working out an appeals process,” she noted yesterday.
Ninety-nine of Sullivan County’s 128 Empire Zone businesses stand to be retained, Jaffe said, until the program sunsets a year from now. (And state officials are working on a replacement program, though details are scarce.)
The state Empire Zone administration requested further info on nine other businesses, leaving 18 on the potential decertification list.
Of those 18, said Jaffe, 10 are facing decertification solely because they were in the Empire Zone program prior to August 1, 2002. Under Governor David Paterson’s new rules for the program, all such businesses must be removed from the Zone (though there’s word the State Legislature is working on repealing that portion of the law).
The remaining eight businesses in various ways did not meet the cost-benefit goals the state set, said Jaffe.
She’s all for under- or non-performing businesses to be removed from the Zone, but she’s upset that some companies are being targeted simply because of a date on the calendar.
“It’s just so unfair,” Jaffe observed. “The folks who have invested and created jobs should not be penalized.”
State officials are trying to clean up a program beset by abuse, and the Zone’s pre-2002 incarnation featured loose rules easy to take advantage of.
But, said Jaffe, the effect in Sullivan County is that of punishing the diligent, not the careless.
The Villa Roma resort in Callicoon, for example, scored a 10:1 ratio in investment versus tax benefits, even undergoing an arduous nine-month audit last year by the state.
“They came through the audit with flying colors,” Jaffe explained. “So everyone is kind of scratching their heads.”
The other businesses affected by their early participation in the Empire Zone include Kristt Company, Home Depot, Holiday Mountain, Monticello Mall, Promenade, RJK Realty, M.L. Zager, Sotiras and even the Industrial Development Agency’s own counsel, Garigliano Law Offices.
The loss of tax breaks will likely not result in the closure of any of these businesses, but Jaffe’s working to ensure they’re not decertified at all.
She’s expecting to find out more about a potential appeals process by the end of the month.
“I don’t have a say in the outcome,” she noted, “but I will support our businesses.”