Site Selection: Phase 3 - Negotiation

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Phase 3

Negotiation

In the negotiation phase, due diligence should be near completion on the real estate and respective communities. When the decision is narrowed to at least 2 states, negotiations start to materialize into incentive offer letters. At the end of this phase, your company should have enough information to make an informed site selection decision.

Steps in Phase 3 - Negotiation

Narrow your options to at least 2 states & sites
Finalize due diligence on real estate/sites
Negotiate incentives with State & Local Governments

Things to remember:

States compete against each other for business recruitment daily and offer a variety of incentives. Incentives are typically in the form of tax credits and grants.
Local incentives normally are usually in the form of property tax incentives and grants to offset infrastructure costs.
Training and recruitment assistance can also be offered at the state and local levels.
When reviewing real estate, take into account the infrastructure requirements (utilities, environmental, roads, traffic signals, etc.) and the timing for permitting/zoning approvals.

Useful Websites

Effective State & Local Tax Rates for Manufacturing (www.taxfoundation.org/blog/location-matters-effective-tax-rates-manufacturers-state)
CCH Group - Tax Research (www.cch.com)
Thomson Reuters - RIA Tax (tax.thomsonreuters.com)
State Incentives Chart - Site Selection magazine (www.siteselection.com/issues/2015/nov/images/1511IncentivesChartswNotes.pdf)