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The CFO's Role in the Site Selection Process

In today's tough fiscal environment, those involved in making the location decision often defer to the company's CFO.

Winter 2011
(page 3 of 3)
CFO outreach and marketing - In addition to attending the traditional conferences for real estate executives, some communities are starting to look at attending conferences for corporate financial executives. Their message at such events is all about cost. Instead of listening to the usual sales pitch about land, quality of life, and infrastructure, the CFO will hear about taxes, fees, utility charges, and wage costs. While all this information can be incredibly helpful to the CFO, remember that economic developers are in the sales business, so it is important for the CFO to verify the data provided and see how it stacks up against real world experience. As part of the site selection process, the CFO should request to talk to other CFOs at companies with existing facilities in the community in order to compare notes.

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Emphasis on consistency and predictability - A strong incentive offering is always welcome; however, the CFO should also ask questions about consistency and predictability of government policies. For example, when was the last time the corporate income tax rate increased? What has been the trend on property and other local taxes? What is the credit rating of the host community and is the rating improving or declining? Is there a history of special tax assessments that can unexpectedly increase costs in the future? Knowing the answers to these and similar questions is essential to ensuring that the underlying business climate provides a foundation for success.

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