New York City Department of Small Business Services

Effectiveness of the Empire Zone Program in the East Harlem Empire Zone

In the Empire Zone Program, which is funded primarily by the State and administered by local governments, businesses located in certain economically distressed areas of the State (Empire Zones) may receive tax benefits and other incentives that are intended to encourage economic development, business investment and job creation. A total of 72 areas have been designated as Empire Zones. We performed a series of reviews in which we examined both the statewide administration of the program and the effectiveness of program activities in certain selected zones. This report, which examines the effectiveness of program activities in the East Harlem Empire Zone, is one of three reports addressing zones located in New York City. Program activities in these zones are overseen by the New York City Department of Small Business Services, pursuant to a contract with the New York State Department of Economic Development.

We found that most of the economic development goals established for the East Harlem Empire Zone are not sufficiently specific and measurable. As a result, it cannot be determined whether the goals are being accomplished or whether the intended benefits of the Empire Zone Program are being achieved in this zone. Most of the businesses in the East Harlem Empire Zone have reported performance shortfalls, but no corrective action has been taken by program administrators. We recommend that a number of actions be taken to improve program administration and verify the accomplishments reported by participating businesses in the East Harlem Empire Zone.

For a complete copy of Report 2003-D-4 click here.