A rapidly expanding technology company with clients consisting of Fortune Global 1000 has international operations with a concentration in the U.S. The company services technology needs for the manufacturing, logistics, retail and financial services industries.
As client acquisition accelerated, capacity could no longer be met within existing operations. There was tremendous stress trying to meet customer demand. There were labor shortages, lack of available space and limited capital to expand or relocate existing operations.
Economic Incentives Advisory Group (EIAG) was engaged to identify states with a business friendly climate and labor force that could meet the client’s operational objectives. Instead of concentrating on a specific city and state, EIAG created a competitive environment amongst a number of states and localities that could meet the expansion requirement. Request for Proposals (RFP) were developed and sent to the various locations.
Each locality responded with an incentives package specific to the forecast of jobs being created, capital investment and proposed training expenditures. Initially, the proposals received were “generic” in nature. EIAG then sent a follow-up communication demonstrating where each community needed improve to maintain competitive for the expansion. The final rounds of incentives packages consisted of cash, tax credits, utility discounts, property tax abatements and in ceRtain cases – labor commitments.
Through this initiative, EIAG was able to lower the costs associated with opening new facilities. These funds, abatements, credits and other incentives are instrumental in achieving greater profitability – more rapidly.
The industry leader in North American waste solutions was looking to consolidate operations to efficiently serve its base of 21 million customers. The company’s primary objective is to manage more than 20 tons of recyclable material by 2020. This company has North America’s largest network of recycling facilities, and continues to expand its footprint.
To achieve this goal, customer service operations needed to be consolidated from a multi-state footprint into one centralized location to create economies of scale. Hiring, training, programs and product launches could more easily be managed at one central location.
As the company was evaluating different localities, it was a challenge for the real estate and operations teams to concentrate on incentives. The primary focus was identifying the optimal labor market and facility to house operations. Incentives had clearly become a “back-burner” priority due to limited resources and time.
Economic Incentives Advisory Group (EIAG) was engaged to identify the available incentives. EIAG conducted interviews with finance, human resource, operations and real estate. Once the hiring forecasts, capital investment and occupancy dates were established, EIAG developed an incentives plan.
EIAG developed an incentives plan to secure a combination of cash and tax credits. Once the state awarded an incentives package of nearly $6 million, EIAG then established a process to manage payroll requirements, capital expenditures and training expenses so that the funds could be utilized by the company.