By Jennifer Syx, Managing Director, Business & Economic Incentives
Choosing where to locate, expand, or remain is rarely just a real estate decision. Financial incentives can change a project’s economics but find the right programs and ensuring the value is actually captured takes more than knowing where to look.
State and local governments offer a wide range of incentives, from tax abatements and grants to financing programs and tax credits. The challenge is understanding which programs apply, how they fit together, and what a company has to do to receive them.
That process starts well before a project breaks ground or a lease is signed.
Start With the Right Questions
The incentive process typically begins when a company is considering a new facility, an expansion, or a relocation.
At that point, the question is not simply, “What incentives are available?”
It is whether incentives should influence the site decision in the first place, which locations offer the strongest overall opportunity, and what a company will need to commit in return.
Most incentive funding comes from state and local sources, which means the structure of each deal can vary significantly. For the company, the objective is to align the right site, the right financial support, and the right timing. For the community, the focus is often on the economic activity the project will generate.
That can include direct job creation, job retention, new employment from an expansion, and additional jobs created through construction, subcontracting, and related business activity.
Understanding that broader economic impact can help companies build a stronger case when negotiating with government stakeholders.
Building the Right Incentive Stack
No single incentive program necessarily makes or breaks a project. The value often comes from understanding how multiple programs can work together.
Depending on the location and project, an incentive package may include:
- PACE financing
- Real estate property tax abatements
- Private activity bonds
- Tax increment financing
- New Markets Tax Credits
- Income tax rebates
- Opportunity Zones
- Machinery and equipment tax credits
- Infrastructure and site development grants
- Other state and local economic development programs
The goal is not simply to find the largest individual incentive.
It is to understand how the available programs fit together and build the right capital stack for the project.
That requires research, due diligence, and a clear understanding of the rules attached to each program. Incentive structures, eligibility requirements, and regulations vary from one jurisdiction to another, so a program that works for one project may not be available or may work very differently for another.
Securing the Incentive Is Only the Beginning
Once an incentive agreement is secured and the project moves forward, another critical phase begins: compliance.
Economic development incentives typically come with reporting requirements and performance commitments. A company may need to document job creation, investment, construction progress, payroll, or other milestones to demonstrate that the terms of the agreement are being met.
Meeting the business commitment is only part of the process. The company must also ensure the required documentation is submitted correctly and on time.
A missed report or overlooked compliance requirement can put an incentive payment at risk, even when the underlying project commitments have been met.
That is why incentive management should continue throughout the life of the agreement, not stop once the deal is signed.
What This Means for Your Project
Economic incentives can have a meaningful impact on the economics of a location decision, but the value depends on much more than the headline dollar amount.
The right approach connects site selection, incentive identification, negotiation, documentation, and compliance into one process.
Mohr Partners helps companies evaluate incentive opportunities, understand the programs available in different markets, negotiate with government stakeholders, and manage the requirements that follow an incentive agreement.
The objective is straightforward: make sure the incentives supporting your project are identified early, structured correctly, and tracked through the commitments that make them payable.
If you’re evaluating a relocation, expansion, new facility, or investment project, let’s talk about the incentive opportunities that may be available to you.
