Commack Firm Squeezes in Under Empire Zone Deadline

When Suffolk County Executive Steve Levy introduced a resolution to include the property of Commack-based Gemini Pharmaceutical in the New York state Empire Zone, he knew that tax incentive program would expire on July 1.

He also knew the company might have to wait for the benefits if Gov. David Paterson's plan to defer the program's celebrated tax credits for up to three years passes in Albany.

Gemini promised that if it was approved for the old Empire Zone it would hire 50 new workers adding to the 118 in its current staff and to invest about $5 million to buy new equipment and to do renovations.

The Empire Zone program was enacted to help stimulate economic growth using tax incentives to bring new businesses to the state and give existing businesses the ability to expand, creating jobs. Despite calls by lawmakers to continue the plan, it was allowed to expire. But existing contracts will be honored by the state, according to Katie Krawczyk, a spokeswoman for New York's Empire State Development.

"Companies that entered into the Empire Zone program on or before June 30, 2010 will remain in the program for the remaining life of their benefits," said Krawczyk.

But that would include a three-year gap under the governor's plan.

She said that a contract is typically about 10 years from the time a company is first granted entry.

Another plan with a shorter lifespan will be launched in place of the Empire Zone, called the Excelsior Jobs Program. The new plan is supposed to target specific industries and have more accountability on job creation.

Paterson has called the Excelsior Jobs Program the centerpiece of his job-creation agenda.

"The Empire Zone program was continually hampered by abuses, lack of results and skyrocketing costs," Paterson said. "Despite annual Empire Zone expenditures in excess of $550 million, the State's returns of investment have been difficult to quantify, and businesses participating in the programs have not been held accountable."

Recently a proposal to help balance New York State's overdue budget was brought up by the governor's office to put off the existing tax incentives in the Empire Zone for up to three years.

"The Revenue Bill includes a 3-year deferral of a firms total tax liability in excess of $2 million," said Krawczyk. "Empire Zones are one of the many affected tax credits."

She said that the state legislature still needs to approve the bill before it goes into effect.

Steve Levy, along with New York state Senator John Flanagan (2nd Senate District) and other leaders protested the changes to the program and the budget in front of Gemini Pharmaceutical. Levy said that many businesses have already made decisions on hiring and expanding based on promised tax credits.

"This proposal will result in a giant 'Closed for Business' sign hovering above New York state," said Levy.

Countywide, Levy estimates that the Empire Zone will create 850 new jobs over the next three to four years and $50 million in new investments.