Save Money on Your New Office with Economic Development

If you've been following the ongoing discussion of Amazon HQ2, you know that economic development is a big part of how companies decide where to put their offices. But have you ever thought about how your business can benefit from local and state initiatives?

Understanding Economic Development

When your company opens up a new location, that location carries benefits for the surrounding community. Your new office fills vacant space (or causes new space to be constructed). It generates jobs, which can help take people off of the proverbial dole as well as generating payroll and income tax revenue. Your location also generates additional economic activity, since your workers need places to spend their earnings and your business periodically needs to buy goods and services to support its mission. Furthermore, when businesses come to an area they can create a cycle where each new business moving in makes new businesses want to come. Silicon Valley would never have become Silicon Valley if there was only one high-tech company way back when, after all.

States, counties and cities know about the benefits that a new, relocating or expanding business can bring and have economic development departments to help lure businesses to their locality. These departments market their areas and provide information and logistical support to help companies decide to locate in those areas. Sometimes, they can also provide economic incentives to sweeten the pot.

Incentives

Incentives vary based on your type of business, the scale of your location and the desire of the community to bring you in. Large projects can receive staggering sums. Tesla's Gigafactory in Northern Nevada received a package that included 20 years without paying sales tax, 10 years without paying property tax and additional tax credits worth millions, as long as they meet certain obligations.

Your company's project might not be as large as the Gigafactory or Amazon HQ2, but your business still adds value to the community in which it will be located. While you might not get billions -- or even millions -- of dollars worth of contribution from the local government, you might be eligible for incentives such as property tax abatements, low or no interest financing, forgivable financing for improvements, payroll or sales tax abatements or refunds, cash grants or other types of incentive from the local economic development team.

Getting Your Economic Development Incentives

Receiving any incentive that might be available to you requires three steps. First, understand what incentives are generally available and how your company's plans fit into the communities broader economic development goals. Next, ask for the incentives in the right way and at the right time. Finally, to maximize your potential savings, you should consider having a few different communities compete -- just like Amazon and Tesla -- to earn your business. Many companies work with outside experts to help them with this process, since it can be time-consuming and complicated.