Our goal is to help you navigate the challenges of identifying what economic incentives your company is eligible for, how best to pursue those incentives and then ensure you have the tools to realize the benefits.
What makes a company eligible for economic incentives?
The three elements of investment, people, and time are the essentials of all economic development negotiations.
Investment and net new jobs positively correlate with the size of the resulting economic incentive package.
Location has a layered impact. Rural tends to result in a higher level of economic assistance relative to other areas, except for targeted urban development zones.
When should my company pursue economic incentives?
When you are thinking about expanding, consolidating or changing locations:
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When planning that project
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Before you sign a lease or a sale purchase agreement
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When the expected investment exceeds $1.0M in a two-year window on net new assets
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When adding headcount with or without a significant investment (e.g. 2nd shift)
What if I have ordered long lead items?
As long as you have not received the equipment, you will be okay in most cases.
What if I need to move quickly to secure a site?
Signing a letter of intent or MOU with conditions and due diligence is okay.
What if I am not expanding just spending normal maintenance budget?
Most states have training grants for existing personnel that can be pursued several times over consecutive years.
Are incentive program benefits the same for all projects?
Not all projects are created equal.
Each state controls the structure of their programs. The industry niche of a particular community will dictate the level of interest expressed by a state’s economic development organization.
What economic incentives are available?
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Tax Benefits
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Investment Tax Credits
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Employment Tax Credits
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Tax Abatements for Real & Personal
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Property (PILOT)
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Grants
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Training Grants
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Infrastructure Grants
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Technology Grants
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Equipment Grants
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Low Interest Loans
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In-Kind Contributions
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EDR (power economic development rate)
Who awards economic incentives?
The state and local governments tend to award them.
What is the time commitment a company has to make?
A week’s worth of time spread out over three months.
Time commitments diminish as familiarity with programs increases.
How are incentive commitments secured?
Government uses economic development incentives to influence company investment.
Each economic development incentive program requires:
- Concise discussion of the proposed project and engagement with state and local economic development reps
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Completion of state local intake forms
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Procurement of a written offer
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Execution of contract(s)
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Administration of program compliance and close-out
Note: if phased investment and phase two is a low probability, negotiations are based on phase one investments and jobs. Phase two is a hint at future potential. An exception would be if all incentives are performance based, phase one and phase two are pursued simultaneously.
Do I have to create jobs to get incentives?
Not always.
States consider both job retention and creation important.
Do I have to build a building to get incentives?
No.
States and provincial governments work with local communities to prepare a proposal based on total investment in real and personal property.
Are programs and incentives the same from state to state and project to project?
No.
Program eligibility and compliance requirements often vary from state to state and province to province.
When should incentive negotiations occur?
Ideally, when you are planning your project.
This allows a company to maximize leverage and optimize the total package.
How do I get started putting my companies economic incentive package together?
We are ready to assist you in determining the best plan of action for your companies development program.