Pursuing a new facility or expansion requires strategic planning. A company’s early choices directly influence project cost, incentive opportunity, and long-term success. As a company evaluates potential locations for expansion, keep these priorities at the forefront:
Bring in Your Site Selection and Incentives Team Early
Engage site selection and incentive advisors at the start so they can guide tax strategy, protect leverage, and identify incentive opportunities before revealing a preferred site. Early involvement allows the advisors to compare locations accurately, refine project assumptions, and position the company for stronger negotiations.
Structure Matters
Benchmark each potential community’s priorities and interests, including wage thresholds, job counts, capital investment levels, and targeted industries. Use this information to structure the project in a way that aligns with local requirements. Strategic adjustments to the project schedule, anticipated jobs, or equipment can subsequently offer greater leverage in incentive negotiation.
Understand Local Assessment Practices
Learn how each potential jurisdiction values property. Some states centrally assess specific asset types, while others rely on local appraisal districts. Depreciation schedules, valuation methods, and treatment of specialized equipment vary depending on location. Understanding these nuances early helps forecast long-term operating costs accurately.
Model Long-Term Tax Burden
Assess property taxes, sales and use taxes, special district assessments, and taxable equipment categories before selecting a site. These costs can differ by jurisdiction and can outweigh even generous incentive packages. A thorough tax model gives a clear view of the total cost of operation beyond the incentive period.
Future Compliance Starts on Day One
Factor compliance into the site selection process early. Incentive agreements often require wage verification, job tracking, investment documentation, and annual reports. Anticipating these obligations upfront reduces the risk of clawbacks and ensures the company captures the full value of every incentive earned.
With these strategies and KEA’s support, companies will identify the right site for their future operations.
