Empire Zone Development Policies

I. ZONE GOALS & OBJECTIVES

The Rome Empire Zone complements Rome Industrial Development Corporation's (RIDC) economic development toolbox of business plan development, site location assistance, and access to capital by providing additional financial incentives to business enterprises located within the Zone's key commercial corridors, downtown business district, and industrial/business parks. The program's goal is to revitalize the City's aging downtown and manufacturing sites with new and vibrant businesses that are committed to the Rome area as well as to target and recruit complementary businesses that will supply an economic synergy to Rome's existing manufacturing base and complement surrounding manufacturers within Oneida and Herkimer counties.

II. ECONOMIC DEVELOPMENT PLANNING STRATEGY

The Rome Empire Zone utilizes the City of Rome's Comprehensive Action Plan as the basis for designating Empire Zone boundaries. This plan was adopted by the City in April 2004 and outlines a broad modernization of its codes and zoning laws, downtown infrastructure and community social amenities. The plan can be viewed online at http://www.romenewyork.com/planning.html . The Empire Zone is a critical component of the City's planning strategy in that the Empire Zone boundaries are reflective of where the City of Rome wishes to encourage future commercial development and revitalize economically depressed historic business districts. Rome's Empire Zone conforms to criteria contained in Section 958 of the New York State General Municipal Law (Appendix A). In addition, as an entitlement community for the Department of Housing and Urban Development's Community Development Block Grant Program, the City of Rome is required to prepare a five-year Consolidated Plan. The current Consolidated Plan, covering 2005-2009, was submitted in November 2004.

On a regional level, economic development in the City of Rome is a key component of the 1997 plan prepared by Deloitte & Touche Fantus Consulting for the area's two county economic development agency, Mohawk Valley EDGE (Economic Development Growth Enterprises Corporation). This document, titled the Overall Economic Development Strategy for the Oneida-Herkimer County Region, cited the importance of Rome in assisting targeted businesses to locate at the Griffiss Business & Technology Park (GBTP), which is primarily located within Rome's City limits, and recommended development actions by the City in the following six targeted areas:

• Growing Area Businesses
• Nurturing High-Tech for the Future
• Education and Labor Force Development
• Business Attraction
• Tourism and the Arts

RIDC supports the efforts of Mohawk Valley EDGE, by focusing on traded businesses that complement our existing manufacturing infrastructure as well as non-manufacturing businesses that, through their job creation and/or capital investment, lend themselves to increasing retail and tourism growth in the City. RIDC directly assists MV EDGE by also targeting business expansion in complementary industries that support the high-tech development at the GBTP to keep payroll and procurement dollars within the immediate area and spur further development in still more complementary industries. The Rome Empire Zone functions as a catalyst for businesses to locate and expand within our targeted areas; the addition of jobs in those qualifying EZ businesses also provides additional discretionary income to boost retail and specialty sales within the area. RIDC's development goal is to develop an appropriate mix of retail-commercial businesses to multiply the economic impact beyond simply increased tax revenue and employment with an overall increased level of discretionary spending and capital turnover.

The ZAB will also utilize Rome Empire Zone incentives to complement design components and development strategies of the Urban Design Plan of the Main Streets Initiative, which will soon be released to the general public.

III. INDUSTRY CLUSTERS — TARGETED PRIORITY BUSINESSES

Industry clusters that have historically thrived in the Rome area have been associated with wire and metal manufacturing industries. Unfortunately, many old, outdated and abandoned manufacturing sites have resulted in the wake of business restructurings such those of General Cable and Rome Cable Corporations. Incentives from the Rome Empire Zone have helped turn some of these sites into opportunities for new businesses such as PAR Government Systems and Owl Wire & Cable, Inc. to begin new manufacturing and research & development operations. Additionally, financial assistance from the NYS DEC for Brownfields designation/remediation costs and the availability of a local skilled workforce are also instrumental to making many of Rome's distressed manufacturing areas productive once again. Other manufacturing businesses that could potentially benefit from the use of Rome's existing Brownfield sites are being researched and contacted, with a number of additional businesses already negotiating terms for relocation. With over 600,000 ft.2 of vacated manufacturing/ distribution/ office space still remaining at the former Rome Cable facility, the City of Rome, RIDC, the Rome Community Brownfields Restoration Corporation and the Oneida County Industrial Development Agency have made this a high priority issue.

The Rome Empire Zone will target manufacturing industries/businesses that market 60% or more of their products and/or services beyond the Utica ñRome MSA; these industries/businesses will be given priority for placement in suitable locations of the Zone as well as Rome's downtown commercial corridors.

Service and retail businesses that will fill an existing void in a local distressed or underserved market, support expanded tourism, create jobs, or serve neighboring traded industries/businesses would also be given high priority for certification. A national chain bookstore and a general family soft-goods/apparel store have been identified as desirable targets (especially targeting women, girls and boys clothing). The Rome Empire Zone Administrative Board (ZAB) feels that certain retail businesses in these specific distressed areas may qualify for Empire Zone benefits due to their unique niche markets, location in economically distressed areas (particularly on the N-S James St. and Dominick Street corridors) and complement our overall Main Streets initiative and strategic tourism development objectives. We also believe that certifying certain retail businesses will help the City with its continued efforts to attract and retain an educated and skilled workforce by providing a local source of specialty items, which may entice more daytime workers to either spend more discretionary income or relocate to Rome. General retail business opportunities that have been identified from recent marketing demographic data (supplied by Claritas) are entertainment-related businesses, specific types of food/beverage establishments (non-restaurant & non-alcoholic), household-related services and supplies and personal care businesses.

In the downtown commercial district, small, owner-operated special, niche or boutique style businesses would be targeted, such as ethnic cafes, artisan shops and entertainment venues. As the City of Rome expands its tourism marketing efforts in conjunction with Fort Stanwix National Monument, other local historical sites, the Main Streets Program initiative and the NYS Canal System, retail businesses that cater to visitors of these attractions will also be given priority status for Empire Zone inclusion. Potential business types may include, boat/bike rental/service, an ice-cream shop, stained glass shop, copper wire-based arts and crafts shops.

The Griffiss Business and Technology Park (GBTP), which contains property included in the City of Rome and the Oneida-Herkimer Empire Zones, is being developed according to a specific master plan for the Park. By taking advantage of existing infrastructure and making recent utility and highway improvements, the GBTP is well-positioned for a variety of commercial uses such as aviation industries (potentially a relocated Oneida Co. Airport), high technology businesses (synergistic with the US Air Force's Rome Research Laboratory), light/heavy manufacturing and executive/professional office space. The City of Rome Empire Zone encompasses property in the Technology Heights' area, which is already home to high-technology businesses such as BAE and Dolphin Technologies. Additional modern facilities and acreage are available for further development of high-tech businesses and professional offices.

IV. GEOGRAPHIC TERRITORY

The Rome Empire Zone covers primarily three non-contiguous areas: 1) the Central Business District, 2) the West Rome Industrial Park and 3) The Griffiss Business & Technology Park. These areas were designated in the Rome Empire Zone's 2003 boundary revision under the 75/25 rule. The Rome ZAB selected these primary areas for their strategic economic value to the community in terms of future investment and job growth as well as incorporating the primary industrial and commercial areas of the City of Rome.

The Central Business District (CBD) primarily consists of the main commercial routes running east/west (Dominick Street and Erie Boulevard) and north/south (James Street and Black River Boulevard) from the Fort Stanwix National Monument. Also included within this area are Freedom Plaza, Ridge Street; and South Jay Street. As is typical of all older industrial inner cities, a mixture of aging heavy industrial facilities (such as the former General Cable and Rome Cable sites), single or multi-unit commercial/retail buildings and aging residential units co-exist.

A depressed commercial rental market challenges Rome's CBD, which has resulted in the degradation of many formerly vibrant and attractive commercial structures. In an effort to reverse this trend, three local neighborhood-based merchant/resident improvement groups have organized along Dominick (East & West merchant groups) and James Streets. In cooperation with the National Trust for Historic Preservation's National Main Street Program, the City of Rome recently initiated a Main Streets program to assist these groups with their community revitalization initiatives.

In 2002, Rome was designated a Quality Community by the Lieutenant Governor and the New York Department of State. Through this program, the City was granted $75,000 to initiate the Main Streets program by organizing a board of directors, hiring a coordinator and developing a comprehensive urban design plan. The Main Streets program offers a strategy for downtown renewal, focusing on four main points to create sustainable urban development: design; organization; promotion; economic restructuring. The approach's self-help process involves building partnerships and utilizing existing assets to institute effective change. RIDC will use Empire Zone programs to focus on the economic restructuring component of this strategy and offer reduced investment thresholds to stimulate business development in Main Streets areas within the Zone.

The 78-Acre West Rome Industrial Park is currently at full build-out. Developed by the Rome Industrial Development Corporation, the park houses the largest private employer within the City, the Rite-Aid Northeast Regional Customer Support Center, which currently employs 500 people. The Park also houses seven other private employers with a mix of manufacturing, distribution, and commercial services that employ an additional 300 people. The Park is located within what Empire Zone statutes describe as a nearby census tract of the City. This means that the census tract is not contiguous to census tracts that qualify the City of Rome for Empire Zone status due to high unemployment and poverty.

V. BOUNDARY REVISIONS

The Rome ZAB may periodically propose to add or delete specific properties through the standard boundary revision request process. If the Rome ZAB determines that new and specific areas / properties ripe for economic development are deemed to fall within our designation criteria or, if previously designated, do not have a reasonable chance for future meaningful economic development (as determined by a cost/benefit analysis), the Empire Zone Coordinator may be directed to initiate the boundary amendment process.

Existing Rome Empire Zone - certified businesses that have not performed to expected Empire Zone commitments will be contacted to determine the reasons for their failure to proceed with projected investment, and will have the opportunity to formally, through written request, maintain the Empire Zone status on the property. If the Zone Administrative Board declines such a request, the property will be deleted from the Empire Zone in a subsequent boundary revision. The Rome ZAB will adhere to the recently updated City of Rome zoning and codes law for businesses it targets and certifies within the Empire Zone.

In the CBD, there will be a high priority given to those businesses that will restore and rehabilitate vacant and blighted areas. For existing businesses within these areas, demonstration of increased employment opportunities or capital investment in machinery/equipment/real estate will be required for certification. Businesses most likely to develop in the CBD are small retail/service/commercial businesses that serve the larger commercial businesses, governmental and not-for-profit operations, and tourism-based customers.

VI. CERTIFICATION REQUIREMENTS

Information from the applicant business will be entered into the Empire Zone cost/benefit analysis to determine the overall benefit for inclusion of the applicant business in the Rome Empire Zone The ZAB will base its certification decision upon information supplied in the certification application as well as the result of the cost/benefit analysis to determine if the applicant business will:

1. meet or exceed the certification thresholds for job creation and/or capital investment pursuant to their respective primary location within the Zone and particular business circumstance (startup or existing business)
2. meet or exceed the threshold level of the cost/benefit analysis for their particular primary location within the Zone and particular business circumstance (startup or existing business)
3. demonstrate that it markets, or will market, 60% or more of its products outside of the Utica-Rome MSA

If any of the above conditions are not met, the ZAB may look at one or more of the following mitigating issues to justify certification approval:

1. location in a targeted economically distressed, underserved, or Brownfield area
2. job/business retention (as per established threshold)
3. over-riding and immediate community and/or economic need for the particular industry and/or business
4. strategic importance for future Rome Empire Zone development and investment by complementary industries/businesses
5. necessity for Rome Empire Zone financial incentives to facilitate startup or expansion of business activities

Additionally, the Zone Coordinator and/or Zone Certifying Officer shall not submit any ZAB-approved certification application to Empire State Development or execute any Certificates of Designation for businesses that have real estate property taxes or fees in arrears to any taxing jurisdiction in the City of Rome, which may include municipal real property taxes, payments in lieu of tax agreements, school district taxes, special assessment district taxes, etc. If a company has an approved payment plan in place with the applicable taxing jurisdiction to bring taxes current, the Zone Coordinator may request a written, signed, copy of the plan and, if satisfied in its efficacy, sign off on compliance for Zone certification. The Zone Coordinator may then submit an application for Empire Zone Certification to the Zone Certifying Officer or submit a Certification of Designation for execution. Finally, no certification applications will be processed for businesses that are in current violation of any local laws / ordinances.

The Rome Empire Zone Coordinator will use current City of Rome zoning ordinances to determine a specific business' ability to certify within the Rome Empire Zone. In instances where a business requests a use variance from the City, the business will need to provide proof that the City has provided such variance before an application for certification will be accepted. In addition, the application must be presented to the Zone Administrative Board for review and comment before it may be submitted to the Zone Certifying Officer for approval.

For a business to be eligible for Rome Empire Zone certification, all created jobs must pay at least 135% of the currently established New York State minimum wage and directly supply, or provide access to, appropriate workforce training opportunities.

The Rome ZAB has devised a capital investment certification threshold matrix that is determined by each business' physical location within the City's Empire Zone. These thresholds have been devised to reflect the strategic priorities for each downtown commercial corridor of the City as outlined in Rome's current Comprehensive Action Plan and to reflect continuity with the community development strategy incorporated in that plan. Capital investment and/or job creation must commence within six (6) months of certification and conclude within 24 months of certification. Waivers for these deadlines can only be granted through written ZAB approval prior to expiration of the deadline. The following downtown commercial corridors (as identified through the Main Streets initiative) must receive at least ten ($10) dollars of capital investment / ft.2 of commercial usage in order to be considered for certification in the Rome Empire Zone:

• East Dominick St. (Fort Stanwix east to Nock St.)
• West Dominick St. (Fort Stanwix west to Arsenal St.)
• North James St. (Fort Stanwix north to Turin / Bloomfield St.)
• South James St. (Fort Stanwix south to Muck Rd.)

All other areas in the Rome Empire Zone, other than those located in the GBTP, must be improved with at least ten ($10) of capital investment / ft.2 of commercial usage, with a $10,000 minimum total capital investment, to be considered for certification.

Capital Investment thresholds for Rome Empire Zone property located in the GBTP reflect those of the Oneida-Herkimer Empire Zone, which state that any business' level of capital investment qualifying for Empire Zone certification must be 10% or greater than its fixed net assets as reported in the business' last fiscal year on their Federal income tax return.

The Rome Empire Zone's job creation and capital investment certification thresholds can be achieved through any of the following options: 1) Creation of at least two (2) FTEs (or equivalent combination of full and/or part-time positions) for any startup business; 2) A twenty-five (25%) percent, or greater, increase in FTEs above the average of the last three (3) years (or years in business) of full time employment for any existing business; or 3) Creation of at least one FTE (or equivalent combination of full and/or part-time positions) / (ten thousand dollars) $10,000 of capital investment by any business as a result of location or relocation to the Rome Empire Zone. Job creation thresholds for property in the GBTP are based upon increases over the previous five-year's (or years in business) average employment as follows:

• 10% growth if the business' 3-year average is <50 employees
• 7% growth if the business' 3-year average is between 50 & 250 employees
• 5% growth if the business' 3-year average is >250 employees

A business can qualify for Rome Empire Zone benefits through a job retention threshold under the following circumstances:

1. The business must document a decline of 25% or more in NET business income over the previous 12-month period, which has also resulted in a loss of at least one FTE over the business' previous three -year average employment.
2. The business must agree to rehire at least the number of FTE equivalent positions lost from their three-year employment average plus at least the equivalent of one (1) additional FTE (full and/or part-time) within 12 (twelve) months of their Rome Empire Zone certification date.

VII. DECERTIFICATION

The Rome ZAB will adhere to Section 11.9 (Appendix C) of the Empire Zone Regulations — Revocation of Certification for business de-certifications. The Rome Empire Zone Coordinator in conjunction with the Rome ZAB Chairman will provide written notification to any business, which is deemed in default of its Rome Empire Zone obligations and recommend appropriate action to the ZAB. The business so notified will have the right to provide written and/or oral testimony before the ZAB at a time of the ZAB's choosing. Such testimony must legitimately make a case to demonstrate that the decreased level of business activity can be attributed to a drop in general economic conditions or conditions specific to its industry, and that these conditions have forced a down-scaling or abandonment of the job creation or capital investment within the Zone. The ZAB has the final authority to amend any business' certification requirements and/or revoke any Rome Empire Zone certification with a super-majority vote (60%) of all members present. Grounds for de-certification may include, but are not limited to, the following circumstances (paraphrased from page C-1 of the NYS Empire Zones Regulations):

1. The business made material misrepresentations of fact on its application for certification that would constitute grounds for non-certification.
2. The business failed to disclose material facts that would constitute grounds for non-certification.
3. The business failed to construct, expand, rehabilitate or operate its facility in accordance with the representations contained in its application for certification.
4. The business use of the certified property has changed from the represented use on the certification application.
5. The business failed to create new employment, prevent loss of employment, or make promised capital improvements as outlined in its application for certification provided that such failure(s) was/were not due to economic circumstances beyond the business' control or could not be anticipated with due diligence.
6. The business failed to submit an annual Business Activity Report (BAR) within the prescribed time for such reports or has failed to supply materials requested by the Empire Zone Coordinator, or designee, when due.

VIII. RECAPTURE PROVISIONS

The Rome Empire Zone ZAB reserves the right to recapture unused, under-performing acreage, acreage willingly surrendered or acreage with expired benefits. These acres may be reallocated to other, more effective uses, where benefits will be utilized within 12 - 24 months and economic impact will be realized within one year of certification.

These recapture efforts will be made by the Rome ZAB prior to taking any action against certified businesses with unused, or under-utilized, Empire Zone benefits. Any such recapture of under-utilized acreage from previously certified businesses will only occur after due written notice has been issued to the business that it is in non-compliance and only after a period of time greater than nine-months has elapsed between certification and initiation of any Empire Zone benefits or 24 months have elapsed without completion of job creation/retention commitments.