As your trusted advisor in site selection and location advisory services, we strategically consult with your executive team to maximize the value of location decisions for your long-term success. Our team utilizes our extensive evaluation process to align location decisions and incentive value with your business model. We analyze existing incentive programs at every level (state, regional, county, municipal, and utilities) to determine your growth project’s highest potential tax savings.
By drawing on our team’s strong history of economic development service, we understand the need for a win-win project outcome — for you and the community you chose to grow in. Our team works diligently to pull all relevant players to the table and negotiate an incentive deal that maximizes savings and minimizes risk. Our ongoing compliance relationship with you allows us to proactively identify reporting deadlines and additional instances for cost savings and risk mitigation.
Our National Reach
We work on projects from California to New Hampshire, Montana to Florida, and everywhere in between. With offices now in Indianapolis, Atlanta, Dallas, and Phoenix, our team can work with clients and evaluate opportunities across North America. We continually assess new programs and track changes to existing programs in all 50 states to stay on top of incentive opportunities that may bring additional value to location decisions.
for Site Selection
- Research & Analyze
In this phase, our team evaluates the proposed project and determines the fact patterns for growth. We consider the project’s location (especially if there are multiple location options), the client’s industry, the anticipated investment amount, and the potential impact on job creation. Ultimately, we consider the timeframe for critical decisions as incentives must be negotiated before any growth project occurs.
With the project parameters outlined in the Discovery Phase, our team gets to work aligning the project with existing incentive programs.
We review the requirements of numerous state and local incentives and determine a potential value for the client if applicable programs were utilized. We also review any risks, such as clawback potential or sunset deadlines to crucial programs, and present these for strategic consideration.
Once qualifying programs have been identified, our team begins maximizing the incentives available to the project. We understand that many incentive programs are discretionary, meaning that economic development decision-makers can offer a spectrum of support. Our goal is to maximize the incentive programs for the client while building support and consensus with the community under consideration. Economic development decision-makers are welcomed to the decision table and asked to support the growth project with enthusiasm, as this is a win for their community.
There are a lot of requirements to follow throughout the location advisory and incentive process, and we understand documentation isn’t the most thrilling part of a business’ growth project. However, it is essential to review the documentation thoroughly.
Our team limits the burden of this by managing the process for you. We highlight important stipulations and requirements within the legal documents used to effectuate the incentive benefit and advise the project’s executive team on any relevant details.
All incentive offers are exciting; however, the actual receipt of offered incentives makes the work tangible and valuable. We work to remove the burden of compliance reporting from the client by keeping track of all required reporting and documentation.
This is a relationship, not a one-off transaction. As our team supports the client on documentation reporting, including payroll growth progress, investments into the project, and training updates, we also watch for strategic opportunities to consider further growth projects. Additional growth projects could generate even more incentive opportunities; thus, the process begins again to maximize the tax savings.
Roadblocks to Consider
- Is the local community willing to support the project?
- Does the industry type preclude the growth project from receiving incentives?
- Has the project already had significant progress or commitments with the community regarding the growth project?
- Are there additional stipulations to qualify for programs, such as health insurance offerings, minimum wage requirements, minimum hours for training grants, etc.?
- Does the project have financing, or is that still under consideration?
- Does the incentive require legal representation to move forward?
Why Choose Us?
We believe in relationships above all. We are a strategic advisor and a partner in every growth project. We desire a long-term relationship and positive outcome for the client.
We aim to maximize the available incentives while bringing all parties to the table for an enthusiastic and positive outcome. Our team brings a wealth of experience as we have completed successful projects of varying scopes from coast to coast.
What are my risks?
McGuire Sponsel’s Location Advisory team works diligently to identify and reduce any risks to the client. Risks primarily come in the form of “non-performance” of incentive growth goals. These typically revolve around not achieving target investment and/or job goals as outlined in the initial phases of the incentive project. Most incentives are performance based, meaning that once performance to a set standard is achieved, the client can receive the benefit of incentives. However, if a project does not perform or performs and then reduces incentive goals below expectations, there may be the risk of “clawback” or repayment of the incentive value received to date. Additionally, if a client never performs then there is a risk of not receiving any incentives, which can be detrimental if the project anticipated the incentive value into its pro formas. McGuire Sponsel identifies these potential risks early in our process and advises clients prior to taking next steps that may obligate a client to repayment situations.
When do I need to talk about location decisions or growth projects?
It is never too early to begin the location advisory or incentive discussion. It can be too late, however… Typically, the incentive process takes between 60-90 days in advance of any “final decisions” (permits being pulled, land or building purchases, shovels going in the ground, job hirings, etc.). The process involves data collection on the project, application filings, review of project parameters with economic development decision makers, public meetings, and final award agreements. Some incentive processes may take less time and others may take more. When clients start to think about growth or expansion plans, trusted advisors should integrate incentives into those early planning stages to maximize value.
Can I get incentives for a project that has already happened?
In most cases, no… Incentives are an inducement to making a project happen. If the project has already started or completed, then why would a community “incentivize” it? In many states, there is a “but for…” clause associated with incentives. This typically means that projects must show that, “But for the offer of incentives, the project would not take place…” In other words, “the offer of incentives by the community was the deciding factor for the project to take place within that community…” If a project has started, there may be an option to discuss growth beyond what has taken place to date. A call is always a good idea to review what may still be available from state and local economic development decision makers.
What industries are most commonly supported with incentives?
Manufacturing has always been the darling child of economic development incentives. When a “widget” is stamped with a community’s name and sent out beyond the community, “new money” flows back into the community. In this same vein, Logistics, Distribution, E-commerce, and Technology are all good options for economic credits and incentives. Headquarters operations also bring a significant amount of attention to an area and are typically supported. Additionally, major real estate development can benefit from economic incentives, such as the development of a multi-use commercial/housing block. Retail or small business operations are almost never supported, however…
What kind of “value” do incentives generate?
Incentive value varies depending on the program and the project. However, in most cases, if the project meets the requirements of the program, net new jobs can typically generate between $3,000-$5,000 per new job. This is usually paid out over a period of time, between 3-10 yeas, again, depending on the program. Net new investments can see between a 3%-10% tax savings on the qualifying investments. For example, a project adding 20 net new jobs and investing $2M in qualifying investments could see between $60,000-$100,000 in tax benefit for the jobs and $60,000-$200,000 in tax savings for the investments over a 3-10 year period ($10,000-$30,000 per year in savings).
What size should my project be for incentive consideration?
All programs have their own thresholds for qualification. Typically, growth projects need to add 15 or more jobs and $1M+ in qualifying investments to receive economic incentive support. New jobs and/or investments should be created within 24-36 months of the incentive agreement signing. However, some programs require much higher thresholds, such as 50 net new jobs and $10M+ in new investments. We use the Discovery and Research phases of our Location Advisory process to identify project growth goals and which programs align with these goals.
When do I need to get your incentive team involved in the conversation about growth?
It is never too soon to have a discussion on potential incentives! It can be too late though, so the earlier the better!
How does McGuire Sponsel support incentive compliance reporting?
McGuire Sponsel’s Location Advisory team takes on compliance reporting requirements so that you don’t have to worry about deadlines, filing requirements, etc. Our team supports your growth project by keeping track of filing deadlines, coordinating specific reporting templates, and communications with economic development and state tax departments to receive benefit in a timely manner. It is often important for our team to connect with a client’s HR and Accounting departments to ensure accurate information processing.
How does McGuire Sponsel charge for services?
McGuire Sponsel structures our fee based on the individual needs of each client. A majority of our fees are success based, meaning that the client is not responsible for a fee until they receive a benefit.