Fresh perspective secures broad tax incentives, better opportunity
A manufacturer of specialty pharmaceutical parts needed to expand its operations. New plans included a highly specialized production facility that would require a $16 million total investment and create 123 new jobs. The company preferred to build near its existing plant in North Carolina, but also had a Texas facility that could support the expansion. As part of the initial capital planning, the company contacted the county developer’s office in North Carolina to inquire about property tax and training grants.
The RSM credits and incentives team understood that the company could likely obtain a more lucrative incentive package if it looked more broadly at its available options. Knowing that the Texas operations would also support this expansion, RSM applied to secure credits in Texas, providing the company with more options to obtain the overall best value.
Meanwhile, the RSM team also turned to the North Carolina Department of Commerce to negotiate a larger cash grant to supplement the property tax and training grant package offered by the county. The company was unaware that certain North Carolina state grants require a matching investment from the local development office. As a result, the securing of state grants drove the local office to increase its offer to match. RSM also negotiated a utility rebate through the local utility company based on the energy requirements of the specialized manufacturing equipment the new facility would use.
This highly technical equipment requires specially trained employees. The project team approached the local community college to help the company tailor its onboarding process to support this advanced training. While not a dollar-for-dollar credit or grant, this partnership decreased the overall professional development costs for the company, while instilling a community-corporate partnership.
When compared to the incentive offer from Texas and in light of the company’s preference for expansion in North Carolina, the broad package from the Tar Heel State won out.
All told, RSM negotiated more than $2.3 million in North Carolina incentives for the company—slightly more than 14 percent of the expected project value. The final incentive package included $1.3 million in statutory credits (article 3J), $235,000 from the state’s One N.C. fund, $235,000 in a matching property tax abatement and $550,000 worth of training grants. In addition, the company anticipates an annual utility savings based on annual electricity usage due to the negotiated rate reduction.