by Josh Bays, on Jul 21, 2015 1:40:00 PM
Economic incentives continue to play an important role when distribution centers are looking to open new sites or expand their existing facilities. Given the sophisticated automation systems commonly found in modern facilities, the capital invested and jobs created will often make companies eligible to receive valuable economic incentives such as tax 
abatements, tax credits, cash grants, training grants, infrastructure grants and other incentives offered by economic development organizations. To help understand economic incentive trends for distribution centers, Site Selection Group has identified economic incentive packages awarded to companies across the United States during the second quarter of 2015.
Indiana led the way for Q2 economic incentive awards
The top 20 economic incentive packages awarded to distribution centers in the second quarter of 2015 had a combined capital investment in excess of $78 million. To generate these economic incentives, the top 20 projects are expected to spend more than $480 million of capital and generate more than 4,800 new jobs. These top 20 projects represent a return on investment of approximately 6%, an award of $23,000 per new job, and an average deal value of about $3.9 million.
The following map depicts all of the distribution center announcements tracked by Site Selection Group.
Top 20 economic incentive packages for distribution centers in Q2
The following table identifies some of the largest economic incentive deals offered to distribution centers in the Q2 2015. These projects provide a great way to benchmark what types of economic incentives exist for this type of use. However, it is important to understand the values are estimated and typically only reflective of state-level incentives.
| Company Name | Location | Incentive Value ($M) | Capex ($M) | Jobs Created |
|---|---|---|---|---|
| Seldat | Piscataway, NJ | $51.50 | N/A | 1,050 |
| Amazon | Shakopee, MN | $5.00 | $55.0 | 1,000 |
| Kroger | Blue Ash, OH | $4.70 | $46.0 | 649 |
| Ace Hardware | Wilton, NY | $3.20 | $27.5 | 25 |
| Dayco Products | Memphis, TN | $2.50 | $0.0 | 174 |
| Exel | York, PA | $1.35 | $0.0 | 450 |
| Beach Mold & Tool | New Albany, IN | $1.25 | $23.3 | 160 |
| AmerisourceBergen | Olive Branch, MS | $1.16 | $48.0 | 129 |
| AmerisourceBergen | Newburgh, NY | $1.00 | $39.3 | 121 |
| DHL Express USA | Covington, KY | $1.00 | $108.0 | 50 |
| Piedmont Candy Company | Lexington, NC | $0.81 | $12.0 | 26 |
| Kroger | Houston, IN | $0.77 | $41.0 | 15 |
| Sutter Home Winery | Lodi, CA | $0.72 | $13.7 | 194 |
| Integrated Distribution Services | Plainfield, IN | $0.63 | $2.75 | 71 |
| Sonic Lighting | Plainfield, IN | $0.60 | $5.2 | 115 |
| Schoola | Columbus, OH | $0.52 | $3.0 | 225 |
| Four Roses Distillery | Coxs Creek, KY | $0.50 | $21.0 | 5 |
| EVINE live | Bowling Green, KY | $0.48 | $25.0 | 150 |
| Pepsi Bottling Ventures | Harrisburg, NC | $0.37 | $12.5 | 176 |
| Root Brothers | Hammond, IN | $0.37 | $1.5 | 49 |
For additional information about these projects and others, please contact Site Selection Group.
