Site Selection: Phase 3 - Negotiation
« Back to Phase 2 - Review | Go to Phase 4 - Select Site & Finalize Deal »
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.
Recommended Reading
- Overview of the Types of Incentives by ADP LLC
- Let's Make a Deal: Understanding the Opportunities in Discretionary Incentives (tax.thomsonreuters.com/CreditsIncentives), by Ernst & Young LLP
- Why Location Matters to Manufacturers in Lessening the Tax Bite (www.areadevelopment.com/taxesIncentives/December-2015/Location-Matters-Manufacturers-Lessening-Tax-Bite-890044.shtml), by Hartley Powell, Tax Managing Director and National Practice Leader, and David Padykula, Senior Associate, State and Local Tax Group, KPMG LLP
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)
« Back to Phase 2 - Review | Go to Phase 4 - Select Site & Finalize Deal »
Disclaimer: The information provided on this Resource Page about organizations, businesses or services is for general informational purposes. Inclusion does not mean that Walmart Inc. endorses any organization, business or service. Further, Walmart Inc. cannot and does not make any guarantees as to the quality of services or products provided by any organization, business or service listed here.
