By Ken Alltucker
The Cincinnati Enquirer

Hamilton County and Cincinnati agencies reported a large increase in the number of companies failing to meet job creation and investment goals that were outlined in enterprise zone tax break contracts intended to attract new jobs to the region's core.

A new report from the Hamilton County Economic Development Office shows that 46 out of 115 companies with county tax-break agreements in 2003 either didn't create or keep enough jobs; or they fell short of investment goals for new factories, offices or other equipment.

In 2002, 36 of 119 Hamilton County firms didn't meet these job and investment goals.

In Cincinnati, 21 of 89 companies were judged to be in "noncompliance" with the city's enterprise zone agreements in 2003, compared to 12 of 84 companies the year before, according to the city's Department of Community Development.

Economic development officials cited the poor economy and unrealistic growth goals hatched during the late 1990s as the main reasons for the increase.

"It's fair to say that the economy is a factor in this," said Harry Blanton, manager of the Hamilton County Economic Development Office. "A lot of the companies cited the jobless recovery. A lot of companies are afraid to add jobs, so some of their earlier commitments were a lot more optimistic."

Blanton said the enterprise zone program remains an important economic driver for Hamilton County despite the shortfalls. Zone agreements spurred more than $980 million in private investment and created or kept 13,292 jobs. That compares to original goals of more than $1 billion in investment and 14,832 jobs.

Under the state's enterprise zones, companies can receive millions of dollars in tax breaks on real estate or equipment in exchange for creating jobs at new factories or office buildings.

The state's Department of Development requires each local jurisdiction to poll all companies with enterprise zone contracts and draft a report card each year to determine whether job and investment goals were met.

The local jurisdictions, too, meet once a year to decide whether to change or revoke agreements or send warning letters to firms.

Cincinnati expects to convene a special meeting next month to discuss its enterprise zone results, a spokesman said. The city's preliminary enterprise zone report obtained by the Enquirer included no information about specific companies.

The county's review council met in mid-March and ordered the elimination of agreements with Aventis Corp. and Adam Wuest Corp./Serta.

Aventis, which agreed to invest $600,000 in property and create 45 jobs, moved out of Reading in July.

Adam Wuest/Serta reached a deal in 2000 to spend $7.8 million in equipment and an Evendale factory that would employ 190. The company exceeded its spending goals, but fell 50 jobs short of its employment goal and relocated to Forest Park.

The Hamilton County review recommended that 44 companies be sent reminder or warning letters. In most cases, companies were invited to the county's review council to discuss why they didn't reach goals, Blanton said.

Convergys Corp., which signed three enterprise zone deals for its Norwood call center, told the county that it exceeded its investment target but fell short of hiring. The billing and customer service company promised to create 1,051 jobs, but the report showed that it had 645 workers.

Convergys asked the Hamilton County review council for a 45-day extension to discuss its status with Norwood and county development officials, Blanton said.

The company's situation was complicated a year ago when the city of Cincinnati and the state approved an incentives package of nearly $200 million in exchange for the company's promise to buy and refurbish a downtown office tower. State development officials have said that Convergys' plan was to transfer jobs from Norwood to Cincinnati, but the company has yet to reveal specific job shifts.

Manufacturing firms were far more likely to not reach investment and hiring goals. Of the 46 companies judged out of compliance, 35 were manufacturing or machine-tool firms.

Many of those manufacturing firms have been forced to slash payroll because of difficult economic times.

"Our economy has been somewhat flat or downward," said Ted Mack, Sharonville's development director. "Quite frankly, a lot of the companies are still positive. They feel (2004) is going to be a turning point for them."

E-mail kalltucker@enquirer.com