Incentives are widely recognized as a major factor when a company is making a location decision. Every company should take an active part in understanding what incentives are available during periods of transition.
Many of the popular incentives out today include rewards for location, investment, and employment decisions. When site selection experts factor incentive benefits into their matrices, decisions such as locating in enterprise zones and hiring from targeted groups play a major part in what incentives will be available for a particular project.
One area that is consistently overlooked, where significant incentives can be found, is in the method of shipping you use to bring in raw materials and send out finished product. These incentives may not only make your method of distribution more efficient, but more cost effective as well.
These incentives may be a bit more elusive than your standard fare incentive package. One of the reasons for this is because these incentives come in many different types. Just about every development project has the ability to yield such incentives, as just about every state or municipality offers something.
Their methods, however, of delivering these benefits vary. These types of incentives can be generally broken down into three categories: coupled incentives, development incentives, and third-party incentives.
Coupled incentives are probably the least common incentives that you will find relating to transportation, but the few areas that offer these types of incentives go all out to make them some of the most lucrative incentives in the business.
In Georgia, companies using the ports as a means of shipment may take an additional $1,250 per employee tax credit or an enhanced investment tax credit as an added bonus to their existing tax credit programs. In some cases, companies are allowed to claim both the enhanced jobs and investment tax credits, an option not available to many other companies.
These incentives can significantly impact your site and transportation decisions because of their financial magnitude. But they do require greater work on the company's part.
Development incentives are the most common of the three types. The programs in this category typically go toward new or existing infrastructure improvements and will come directly from the state or city. Examples of development incentives include rail spurs and access roads.
States and cities fund these incentives with tax increment financing programs or discretionary cash programs. These programs, while commonly used to fund transportation infrastructure projects, are usually not offered unless an effort is made to secure these incentives up front.
Finally, incentives for transportation-related expenditures may come in the form of grants by companies that stand to benefit from your expansion project. Rail companies may be interested in providing funding for projects that eventually will mean significant usage (and profit) for them down the road.
Additionally, industrial park developers typically find themselves in situations where roads or a rail spur installed on your property will significantly increase the value or marketability of surrounding properties within the park.
Be conscious of these situations, as developers will enter into arrangements where infrastructure can be installed for a fraction of its normal cost.
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