Top 10 Economic Incentive Deals of 2014

Site Selection Group estimates that in 2014 more than $8 billion in economic incentives were offered to attract various projects in the United States ranging from office projects, such as headquarters and data centers, to industrial facilities, including manufacturing plants and distribution centers. While economic incentives continue to be scrutinized and heavily debated, there is no doubt that they continued to be utilized by states to attract business. In fact, twice as many incentives were offered in 2014 than in 2013.

As one would predict, the largest economic incentive deal in 2014 was the $1.3 billion package offered to Tesla Motors to build the world’s largest lithium-ion battery plant in Reno. Tesla selected Nevada for its facility over California, Arizona, New Mexico and Texas.  They are expected to invest $5 billion and create 6,500 jobs. Its $1.3 billion incentives package includes the following:

•          100% sales tax abatement over 20 years ($725M);
•          100% real and personal property tax abatement over 10
           years ($332M);
•          transferable tax credits ($195M);
•          payroll tax abatements over 10 years ($75M);
•          100% modified business tax abatement over 10 years
           ($27M); and
•          electricity rate discounts over eight years ($8M).
  
  

In addition, the state will spend $43 million to purchase the main thoroughfare through the Tahoe Reno Industrial Center where the facility will be located.

Fifteen of the top economic incentive deals in 2014 were in excess of $100 million. The Top 10 Economic Incentive Deals of 2014 identified below involved major corporations with significant capital investment and/or job creation spread throughout the country. The main incentive continues to be the tax credit; even more so with the newer programs in New Jersey (Grow NJ) and California (CA Competes).

Top 10 Economic Incentive Deals of 2014