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? a total of 2,700 permanent full-time jobs; [these can be normal round bullets as shown]
? more than $700 million in Gross State Product to the KY economy;
? and nearly $20 million annually in state and local government tax revenues;
through the action of economic multiplier effects.
With facts such as these as the backdrop, my Firm, the PE and its PC successfully negotiated for a package of incentives that will exceed $45,000 per new position on a NPV basis. The package contains Cash Grants, Electricity Discounts and tax credits and exemptions. Taken together, the package far exceeds the $6,000 per position the portfolio company was awarded 6 years ago as a stand-alone. The Government Affairs director at the PE holding company level is credited with this $4.5 million in incremental ROI. We are moving on to do the same thing in other states where the portfolio companies contribute significant economic activity and are contemplating additional capital investment.
To my knowledge, this is the first time a PE concern has utilized its portfolios? combined strength to exponentially raise the per unit value of state and local government incentives.
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Each significant capital project or relocation of a major business activity can be broken into its "Life Cycle Stages". Each cycle stage can be associated with a set of "best practices" whose implementation will ensure that maximum value is realized by the Company in return for its investment in the community.
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SPECIAL REPORT
MEEGAN LALLY SPICER, AND ERIC GEISLER
least two things:
2. Look for refunds of taxes paid when profits were higher and the company may not have been as diligent in uncovering every potential saving opportunity. One such benefit most commonly missed involves IRC Section 118 ("contributions to the capital of a corporation") at the federal level. In one recent situation, a Fortune 100 manufacturer could save $2 million in cash by deferring federal tax through the application of Section 118 to a local tax incentive that was negotiated more than a year ago.
How Did Your Company Perform in Securing Economic Development Incentives Compared to Your Competitors
By Michael R. Press
A new source of comprehensive incentive benchmarking data has become available from Incentives Consulting Associates (ICA) a strategic partner of M. R. Press Consulting, with headquarters in the Netherlands. ICA tracks and collects incentive data from North America and Europe where economic development incentives are most prevalent. They monitor more than 30,000 public sources of information on a daily basis--for more information please visit: http://www.icaincentives.com.
Although the new database is still under development in terms of depth of coverage by geography, it is the best source available today for benchmarking data on economic development incentives awarded by state and local governments in the U.S.
Measuring Incentives Success One Job at at Time
The database makes cross-company comparisons of popular statistics such as dollars-per-job, and ROI from incentives quite easy. For the first time, we are able to measure success and compare how well or poorly the companies that have taken advantage of economic development incentives have fared on a per job basis. Looking back at 2010 and the first quarter of 2011 who do we see at the top of the list? Not surprisingly, the 2 packages that exceeded $1 million per new job consisted of an auto-maker in Michigan and a new battery technology investment in Ohio. Also not surprisingly, they both had sizable “job retention” components. Chrysler Group committed to retaining 20,000 jobs in the State, while adding 900 in Sterling Heights Michigan in return for a package of incentives that will total $1.3 billion over 20 years. BASF received a $24.6m grant from the Department of Energy (DOE) under the American Recovery and Reinvestment Act. The company is using it in Elyria, Ohio to construct a facility that will produce advanced cathode materials for lithium-ion batteries that will power the hybrid and full-electric vehicles of the near future. The project is expected to create 20 jobs and retain 134 positions.
Grading Corporate Performance With Benchmarking Data
If we were to grade the performance of companies participating in these programs, we would consider the highest achievers as those who were either awarded in excess of $45,000 per new position, or returned more than 90% of the associated capital investment. Those companies would be graded an “A”. There were 176 companies earning a Grade of A. Companies that met both criteria taking the greatest advantage of the incentive opportunity received an “A+” for their efforts. There were only nine of these awarded in the United States:
| Grade | Company | State |
| A+ | Chrysler Group | Michigan |
| A+ | Remington Arms | Kentucky |
| A+ | Explorys | Ohio |
| A+ | Ford Motor Company | Michigan |
| A+ | Intrasphere Technologies | New Jersey |
| A+ | Procter & Gamble (P&G) | Ohio |
| A+ | Hilliard Farber & Company | New Jersey |
| A+ | Remington Arms | New York |
| A+ | UQM Technologies | Colorado |
> A grade of “B” was awarded to the 174 companies achieving between $20,000 and 45,000 per new position.
> A grade of “C” was awarded to 467 companies who achieved at least $5,000 but less than $20,000 per new position.
> Below $5,000 per position we would have to rank as a failing grade, or “F”. There were 473 contracts in this group.
Is your company taking advantage of the economic incentives available? If so, how do its results stack up against your competitors in our benchmark list below? More importantly, get help raising your “grade” in 2011 by the professionals with the most experience in North America www.mrpressconsulting.com or call us for a free consultation 203-255-9397.
See which companies made the grade... and which did not -- in the full article.
Project Food Prep Co is a manufacturing relocation and expansion in Kentucky bringing 100 new positions. The company will prepare and deliver Fresh/Flash Frozen Organic Meals, Organic Breads-Pastries, Mixes and Baby Foods nationwide. The project will acquire a facility of more than 25,000 square feet into which a fully functional kitchen, bakery, training, office and warehouse distribution facility will be installed.Incentives package totaling more than $1.3 million includes:
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