Jonathan L. Sangster, who will present Tuesday at City Hall, on "Incentives"

"Incentives

...While incentives are still relatively important in the decision process,

it was interesting to note the significant increase in “other incentives,”

i.e., land, utility-rate subsidies, infrastructure support, etc.

This is consistent with what we are seeing with our clients

— they are much more interested in customized packages to meet their specific needs,

largely through nonstatutory programs."

Jonathan L. Sangster

"...generous financial support
have created a near-perfect environment for technology companies
to thrive in the South.

...availability of financial support

Financial Assistance

...more mature operations may look to state and local jurisdictions
to provide economic incentive packages
to offset startup and long-term operating costs.

...A strength of the region is the availability
of traditional and nontraditional economic incentive programs t
o support the technology activity.

Many of the Southern states have developed customized incentives programs
that target biotech, research and development, and technology operations;
in general, the Southern states have the reputation of being much more aggressive
when it comes to incentives offerings than many other regions of the country.

The concept of deal-closing funds continues to gain traction in these states,
and legislatures funding of these programs has grown."

Jonathan L. Sangster
.
.
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"Retention Incentives Lure Companies to Stay Put

Is the decision to relocate an operation from a community realistic
— or just an attempt to receive benefits or incentives to remain?

Elected officials, economic development professionals,
and corporate decision-makers have long debated the merits and value
that economic incentives play in the strategic location decision process.

...states and communities
have designed their statutory and discretionary incentive programs
to support these drivers.

Historically, the success stories have outnumbered the failures…

...seven of the top-10 site selection factors are related to business costs
(labor, energy, real estate/construction, shipping)
and the availability of incentives to support the financial business case
(tax exemptions, state and local incentives).

So what can be inferred from this?

1. The cost of doing business
(labor, energy, real estate, transportation, taxes
and incentives to offset start-up and operating costs)
will continue to drive corporate leadership’s decision process.

...Communities and states will be competing to retain existing operations.

3. The role of flexible incentives may become more important
as companies are seeking ways to offset start-up costs, new investment,
and long-term operating costs.

Incentive programs
that have traditionally targeted new job creation and investment
become ineffective or a non-factor in the retention evaluation process.

4. States and communities that recognize the value of retention incentives
... may have an advantage in the competition to retain their operations.

Jonathan L. Sangster
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"Should you consider an area where state and local agencies
can assemble the best package of economic incentives
to support your company’s start-up and long-term operations?

• Should you look for an environment where facilities
are immediately available at competitive costs
that will enable your company to achieve its “speed-to-market” objectives?

• Should you consider a community with the necessary infrastructure
...to help create or produce your company’s product or service?

…and the answers are…YES!

Do you need to be located in a community or state
with strong private funding sources such as venture capital,
angel funds, or low-interest loan tools?

• How important is the availability
of state and local financial and economic incentives, including grants, f
orgivable loans, tax credits, work force training, or tax abatements.

Which of these programs, if any,
will most benefit your operation and company?"

Jonathan Sangster is a senior managing director with CBRE Consulting,
a strategic advisory consulting group within CBRE.

He assists clients in finding best-fit locations
that align with their strategic business objectives,
addressing needs resulting from mergers and acquisitions,
business expansion, restructuring, and rationalization.