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Issue No. 2 incentis group Newsletter
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July/August 2009
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Welcome to the incentis group Newsletter, the bi-monthly publication designed to keep
you, our valued business partners, in-the-know on incentis group projects and
services and changes in the economic development industry that may benefit your
projects. We hope you find our second issue contains information useful in your project
planning.
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Other Incentis Group Communications
In addition to the newsletter, incentis group recently launched two new sites to keep
clients and industry practitioners up to date and informed on the latest trends,
rulings, programs, and developments in the world of Economic Development
Incentives.
A Forum site, located at www.ei-standard.com, invites visitiors to
register and interact with questions and comments in a wide range
of categories.
Topics for discussion include:
State Incentive
Programs and Policies
Federal and State Stimulus
Programs
Financing Capital Investment in a Slow Credit
Environment
Green and Energy
Initiatives
Global Incentives and
Subsidies
State and Local Tax Issues
Grading State Tax Structures and
Policies
There will also be updated information on recent State
and Municipal Bond issuances across the country for various Economic Development
purposes.
We invite you to go to the EI-Standard web page to
share information, lead a discussion, ask questions, and interact with incentis
group members, tax accountants, economic development officials, lawyers, and
business managers to keep informed on the daily changes in the business,
economic development, and tax environment.
We have also
launched an incentis group blog, at http://blog.incentisgroup.com/.
Current articles cover issues such as new incenitve programs enacted in Kansas,
a new Green business park in Los Angeles, using sensitivity analysis when
conducting site selection analysis, and other topics of interest.
Both the Blog and EI-Standard sites can be accessed
directly from our home page, at www.incentisgroup.com
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incentis group Success - Kansas
An
incentis group client recently made an acquisition of a vacant, 30,000 square
feet manufacturing facility in Kansas. incentis group was retained to help
negotiate and secure economic incentives for this acquisition. The project
entailed a $16,000,000 capital investment and the creation 12 new jobs in the
local community.
Our client was able to secure over $2,000,000 in various
economic incentives to help offset both the upfront costs and on-going
operational costs of the facility. The components of the comprehensive package
included a property tax abatement on both the existing and new building
improvements, sales tax exemption on building materials, investment tax credit,
utility tax exemptions, building permit fee waiver and a job training grant.
The improved facility is now fully operational and many of the incentives have
already been realized by the client.
For
information on the services provided during this project or to learn more about
incentives in your area, please contact James Gomochak at 312-421-3482 or
JGomochak@incentisgroup.com.
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American
Recovery and Reinvestment Act - Update on Economic Development Bonds
The American
Recovery and Reinvestment Act established
several new types of bonds, including "Build America Bonds", "Recovery Zone
Economic Development Bonds", and "Recovery Zone Economic Facility Bonds".
The Build America Bonds are for public
infrastructure purposes only, and have been well received in the market and
actively utilized by States and municipal issuers since soon after they were
established.
For
the Recovery Zone Bonds, there are specific requirements for how a State or
local government entity can designate an area to be a "Recovery Zone", related
to unemployment levels, recent job losses, per capita income, blight, and other
factors. Once designated, bonds can be issued to fund a variety of public and
private economic development purposes. The allocations to states, based on
relative job losses across the country
during 2008, was announced by the IRS in late June.
States with the highest allocations
were:
The total allocation is $10 billion for the Recovery Zone Economic Development
Bonds and $15 billion for the Recovery
Zone Economic Facility Bonds. All bonds must be issued prior to January 1,
2011. The benefit is a credit for 45% of the interest costs paid for Economic Development Bonds, and
35% for Economic Facility Bonds.
Generally, Economic Facility Bonds can be used for private investment associated
with economic development in a Recovery Zone, whereas the Economic Development
Bonds are to be used for public infrastructure, land acquisition for industrial
parks, job training, and other public
purposes.
This is an
excellent time for businesses with projects in the states above, and
across the US in areas recently depressed by significant job losses, to receive assistance with financing your growth plans. Call us
today!
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Message from the CEO
The current Economic Downturn has forced many companies to
forego planned investments in people and capital. In many cases, it has resulted in layoffs and
even facility closures. Many of our
clients are currently performing rationalization of existing operations and
facilities to determine the most productive locations for continuing operations
and whether they can justify all of their existing facilities.
If you are a part of your company's rationalization process
or involved in capital expenditure decisions, we would like you to consider one
of the opportunities that many companies miss regarding Business Incentives:
"Routine Capital Investment". Perhaps your company intends to continue to
undertake routine annual investment in replacement equipment, technology
upgrades, building renovations, or information and computer systems. Are you aware that this may provide your
company with an opportunity to secure valuable incentives?
incentis group has successfully packaged and presented
several years of such investment to state and municipal officials and obtained
millions of dollars of financial benefits for our clients. We have even secured benefits when our
clients were reducing employment at a facility.
Let our Team conduct a Diagnostic Review of your current operations and capital
expenditure plans to see if you are eligible for such financial benefits.
Larry Kramer
Chief Executive Officer
incentis group
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incentis group is a national
firm of incentives and credit professionals who provides incentive and
credit negotiations on behalf of
Companies that are making acquisitions, routine capital investments,
hiring/training employees, expanding/downsizing facilities and other
activities in the United States,
Canada
and other parts of the world. If
your business is growing or experiencing changes, you may be eligible
for incentives,
credits and other benefits from your Federal, State and Local
Government.
Additional
services offered by incentis group can be located on our web site www.incentisgroup.com or by contacting
our Vice President of Business Development, Karen Warren at 561-493-9558.
Sincerely,
Incentis Group
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