JBT - Economic Incentives

Alston & Bird provides comprehensive counseling to manufacturers, developers and other businesses seeking federal, state and local grants, tax reductions and other economic incentives in connection with proposed relocations, expansions or other capital investments. Such economic incentives generally fall within one of two categories: negotiated (e.g., state grants, property tax reductions, utility extensions and connection fee waivers, road construction, site development and, in certain cases, tax-exempt bond financings) or statutory (e.g., jobs or hiring tax credits, capital investment tax credits, job training and retraining tax credits, sales and use tax exemptions, research and development tax credits and “freeport” inventory property tax exemptions). Our attorneys are experienced in negotiating economic incentives packages with state and local governments and have a vast array of experience, particularly in the Southeastern states. Because of this experience, we often know details about what incentives such governments have previously offered to other businesses, what incentives other competing local governments have offered and how to structure incentives transactions in order to maximize the benefits to our clients.

Alston & Bird’s economic incentives team includes attorneys with backgrounds in public finance, state and local tax, real estate, and land use and regulation. The public finance attorneys have taken the lead role in assisting our clients to obtain the often more difficult negotiated incentives from local governments. Many local government incentives (and many state grants) are available only if the local government or public development authority agrees to take record title to the project. State grants often can only be made to such a local government or development authority and only with respect to property owned of record by such governmental entity. Thus, many of these transactions are structured as traditional industrial development revenue bond financings. We are extremely familiar with the state and local laws and procedures affecting the participation of such local governmental bodies in economic development transactions, including open records and open meetings laws, filing and reporting requirements and other similar regulations applicable to governmental bodies.

In addition, our incentives team includes state and local tax attorneys who have counseled many clients on how to qualify for the state tax credits and state tax exemptions offered in connection with their projects. We have worked extensively with representatives of various state revenue departments and other state and local officials involved in interpreting statutory credits and exemptions and are familiar with the written, and sometimes unwritten, administrative policies that determine whether or not such credits and exemptions can be obtained.

We are at the forefront in assisting clients in maximizing the benefits of property tax and other economic incentives and advising them on the most efficient and economical methods of procuring these benefits. We know the players – the representatives of state and local government – involved in this business and have worked with a wide variety of clients, including manufacturers, office, retail and commercial developers, and other businesses in negotiating economic incentives packages for their capital projects.

Representative Experience

The following are several recent examples of economic incentive projects on which we have worked:

• Assisted a large communications company in obtaining property tax reductions and other incentives in connection with the development of five office and administrative facilities representing an aggregate investment of over $1 billion.
• Assisted several large Japan-based manufacturing companies in obtaining state grants and local property tax incentives in connection with the construction of over $500 million in manufacturing and distribution facilities.
• Performed a comprehensive analysis of all state and local economic incentives available in connection with the proposed relocation of our client’s international headquarters and the development of a new research and development facility, including negotiating incentives packages with three local communities as well as several state departments and the governor’s office.
• Represented three national retailers in connection with the negotiation of economic incentives with respect to the development of a new regional shopping mall. This transaction involved eight different bond issues, five anchor stores, the mall developer and several public bodies.
• Assisted a build-to-suit developer of industrial and commercial properties in connection with multiple projects, several of which were entirely or partially speculative.