What's the Value of Credits and Incentives
Updated: Dec 2, 2019
Financial incentives, or credits & incentives (C&I) use has increased dramatically over the past decade and become a more prominent, and challenging. These programs can help communities attract, retain and develop business and industry. They are used in many ways that include financing neighborhood revitalization, redevelop brown fields, and accomplish other important community objectives. Likewise, financial incentives help grow all sizes of business and not-for-profit organizations by promoting employment, providing workforce training, assisting with business investment costs and host of others.
Still Worth It?
Unfortunately, many see such opportunity as either too little value, or don’t even understand what value incentives bring. Some decision-makers are reluctant to participate in the process, in effect leaving money on the table that could enhance the return on a relocation or expansion investment. We hear, “… incentives are too complex and that they invite too much regulation.” “They’re not really worth our effort”. One firm was awarded an incentive package totaling $10 million to help a project in which the capital investment was $80 million and 30 jobs were created. Still worth it?
Such financial options do lie in the details. Timing is certainly a big factor. Some say, “We’ve tried it before and we haven’t been successful.” Perhaps, but when they tried applying it may not be the right business environment that would suit such activity. On the other hand, such a business has plans that include employment growth targets, capital investment goals, and relocating that would trigger a variety of incentives.
Keeping it Real.
More and more, credits and incentives (C&I) are finding their way onto balance sheets as line items. If a business is relocating or expanding, economic incentives can complement such business plans with lasting savings for years to come. Evaluating incentive value and how it promotes economic development is another way incentive consultants can help with this process.
If you have questions regarding economic incentives, program eligibility, or interested to pursue such subsidies, please contact us.
Geoffrey Smith, Vice President of Marketing at the New York Grant Company, a private consulting firm specializing in securing financial incentives.