Securing economic development incentives is a key element of a successful site selection strategy, but it requires careful planning, negotiation, and long-term compliance. The right incentives can offset costs, accelerate project timelines, and support long-term growth, but the process is often complex and full of potential pitfalls. From the earliest stages of research through contracting and compliance, industry experts agree: transparency, strategic timing, and thorough due diligence are essential for both companies and communities.

Clarity and Transparency in Incentive Offers

“We always say that incentives don't make a bad location good, but what can make a good incentive great? When I think of the best incentives my clients have been offered, two words come to mind: clarity and transparency. All too often, an incentive offer is presented as one solid number with little detail about how the incentive will be received and the requirements for compliance to receive the benefits. Projects often advance significantly, factoring in an incentive as a benefit, only to discover it is entangled in bureaucracy and unlikely to be realized by the company. The best practice for any entity offering an incentive is to present the offer including the anticipated annual benefit for the company and a draft of the agreement they will be expected to execute. This should include the anticipated annual benefit for the company, a draft of the agreement to be executed, annual compliance examples, deadlines, and any associated fees. Such clarity and transparency lay the groundwork for enduring partnerships.”

Strategic Planning and Compliance
Minah Hall, Partner, Compass Key Solutions
Incentives must be part of a company’s broader strategic plan, beginning with a clear understanding of what is most valuable to the business. Minah Hall stresses the importance of determining upfront whether a company values tax savings, cash grants, or infrastructure improvements, then calculating the potential return on these incentives. Hall also points out that compliance is a critical factor often overlooked until it’s too late, reminding companies to plan for compliance reporting from day one.

“Economic development incentives are a critical piece of a company’s strategic operation plans. But like anything worth planning, there needs to be thought put into the beginning, the middle, and the end, since incentives programs are not one-size-fits-all. Companies must first ascertain what they deem to be most valuable to them; is it reduced rates for utilities or tax savings? Is it a new exit on the interstate closer to their facility or a cash grant? Once this determination is made, it is imperative to calculate exactly how much benefit will be derived and more importantly, monetized. Unfortunately, once incentives are finalized, many companies find themselves unable to benefit from these incentives they worked so hard to secure. An important question to ask during the incentives negotiations is how to establish the annual compliance reporting required to obtain the benefit. Compliance can be time-consuming and documentation-heavy, preventing some companies from fully using the negotiated benefits. But well-informed incentives holders know that the up-front time investments, in addition to watchful monitoring, can pay dividends throughout the incentives lifecycle as it makes its way from a planned concept to the reality of compliance reporting.”

Timing is Everything in Incentives Procurement
Stephanie Yarbrough, KS Law
The timing of incentive agreements is critical to their success. Stephanie Yarbrough highlights the need for companies to align their project timelines with the schedules of state and local governments, ensuring that all necessary approvals and public hearings are considered. She also advises caution when it comes to hiring or making public announcements before an agreement is in place and making timing considerations a top priority in any incentives negotiation.

“An important best practice for economic development incentives is to be strategic with important timing considerations. Timing is everything for these deals. At the outset of negotiations, the company must have enough information to provide to the state and local government officials regarding the project. Additionally, the company should consider waiting to hire new individuals until they have an economic development incentive agreement in place, as many incentive agreements will not include hires prior to the effective date. Further, companies must be careful to prevent premature disclosures. A press release prior to finalizing the incentive agreement risks losing the incentives all together.

A company must also consider that the state and local authorities have their own timing requirements. For example, the approvals process may include readings of an ordinance or resolution at county council meetings, public notices, and public hearings. A company must take into consideration the meeting schedule and approvals process for these incentive agreements. Ensuring that the company, the state and local economic development authorities are all aligned on timing is the best practice to take when working on an economic development deal.”

Simplicity and Flexibility for Long-Lasting Programs
Lindsey M. Cannon, Quest Site Solutions
While economic development incentives can often be complex, Lindsey M. Cannon advocates for keeping them as simple and flexible as possible. Urging governments to prioritize easy application processes and streamlined approvals. Flexibility, especially in incentive guidelines and marketing, can also help programs stay relevant over time. She highlights South Carolina’s tax incentive manual as an example of a clear, valuable resource that’s updated annually to support companies navigating the state’s offerings.

• When it comes to state or local incentive offerings, keep it simple and straightforward but allow for some flexibility. While this applies to the entire process, this is especially applicable to the actual incentive guidelines as well as how they are marketed and communicated.
• Ensure the longevity of incentive programs as well as their funding. Programs that are constantly changing are difficult for companies and consultants to understand.
• Applications should be easy to complete, and the incentive negotiation process should be able to be completed in a relatively short period of time. It should not take hundreds of pages of documentation and many months for a company to get an incentive offer from a state or community.
• For companies and consultants asking for incentives, customize the incentive request to address the deficiencies in a location. The incentive request for two finalist locations should be different based on what is needed in each location.
• Cash is always king, but time is also money. Not all incentives need to be monetary incentives. Expedited permitting and/or pre-approvals that can get a company up and running quickly can sometimes be just as valuable as a financial incentive.
• If a company is not able to utilize a tax credit, giving the company the ability to monetize the credit is beneficial.
• If final approval is needed after an incentive offer is made, the process and timeline for final approval should be clearly indicated in the offer.

One specific best practice is the South Carolina Department of Revenue’s manual “South Carolina Tax Incentives for Economic Development.” This is an approximately 300 page guidebook that lays out all of the tax incentives that are available in South Carolina. Updated annually after the legislative session has ended each year, this is such a valuable resource when working on projects in South Carolina.”

Building Partnerships Through Due Diligence
Monty Turner, Senior Vice President, Principal, Colliers Site Selection
Strong relationships are the backbone of successful incentive negotiations, according to Monty Turner, who emphases the importance of clear communication and mutual respect. Turner stresses that site selectors must represent their clients’ interests while fostering a healthy, long-term relationship with the community. This approach ensures that both parties are aligned, not just through the project’s groundbreaking, but through years of compliance and continued partnership.

“In our experience as site selection consultants, we find that establishing good relationships with communities and conducting thorough due diligence are key to the success of a project. We approach each community as a potential partner and understand we are often at the front line of representing our clients in establishing a healthy and mutually respectful relationship with the community. These strong relationships foster communication, enabling key stakeholders to better understand incentive eligibility requirements, approval processes, and compliance. While a state or community representative may be able to provide information regarding incentives programs, site selectors have the responsibility of knowing project details and determining which programs are best for our clients’ needs, especially given that some incentives require application fees or lengthy approval timelines that can impact the project schedule. A healthy partnership can also help set clear priorities across all team members and troubleshoot any issues in order to avoid risk and keep project schedules on track. Ultimately, we are setting the tone for a relationship that will last far beyond a groundbreaking or ribbon cutting ceremony. Fostering a win-win situation for the community and company is in the best interest of both parties for a long-term solution.”

Multi-Disciplinary Approach to Incentive Compliance
Eric Dantzler, Director of Incentives Compliance, Atlas Insight
Incentive compliance is a long-term effort requiring coordination across multiple teams. Eric Dantzler emphasizes the need for upfront planning, continuity in personnel, and strong relationships with government partners. On the government side, best practices include transparent guidelines, regular communication with companies, and proactive administration to ensure incentives are accessible and beneficial for all stakeholders involved.

“Businesses and economic development agencies have a vested interest in achieving successful outcomes related to economic development incentives. One important consideration is that the incentive compliance process is a multi-disciplinary effort. Often, the individuals responsible for initiating a project are not the same ones who will take long-term responsibility for ensuring compliance with incentive agreements. Additionally, these agreements typically span at least five years, with many lasting ten years or more.

A strong foundation for a successful long-term incentive compliance effort requires upfront coordination, planning, and clear expectation setting. On the company side, it’s crucial to identify key internal stakeholders who will own or contribute to the compliance effort. Establishing continuity plans for personnel turnover and proactively fostering relationships with economic development partners is essential.

From the government perspective, we have observed that the most successful programs invest as much effort in incentive administration as they do in business attraction. Best practices may include publishing transparent guidelines and policies, as well as maintaining regular communication to remind awardees of deadlines, provide clear instructions and guidance, and conduct debriefs after compliance reports are submitted. By taking a stakeholder role in the incentive compliance process, governments can help to ensure that companies fulfilling their commitments can confidently access their earned incentives.”

The takeaway
The experts agree: securing and successfully managing economic development incentives requires clear communication, thorough planning, and long-term relationships. By following best practices in transparency, timing, and compliance, companies can maximize the value of their incentives and foster partnerships that benefit both their business and the communities they serve.