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SURVEY QUESTIONS INCENTIVES ROLE AND IMPORTANCE IN CORPORATE LOCATION DECISIONS

 CHICAGO, June 28 /PRNewswire/ -- For years, economic developers have tried to entice expanding and relocating businesses to their jurisdictions with public incentives. But promises of infrastructure improvements, property tax abatement, tax credits, subsidized training and other incentives play a relatively minor role for corporate real estate executives who are in the initial stages of determining where to expand or relocate, according to a survey conducted by The Deloitte & Touche Realty Consulting Group, in conjunction with NACORE (the International Association of Corporate Real Estate Executives).
 Incentives ranked only 14th out of 17 location decision factors by more than 150 corporate real estate executives from across the country who participated in the survey. Instead, corporate real estate executives placed far more importance on a community's inherent qualities. Real estate costs, labor force issues, transportation, real estate availability and market access were ranked as the top five location decision factors by corporate real estate executives.
 Both corporate real estate executives and economic developers concurred that incentives come into play in the final stages of the decision-making process, primarily serving as a tie-breaker between equally qualified locations. They also agreed that another important role of incentives is to reduce start-up costs and risks.
 In May, separate surveys were sent to the memberships of NACORE and the American Economic Development Council (AEDC) to gauge the importance that corporations place on incentives in their expansion and relocation decisions, and the role that incentives play for economic developers in their efforts to retain and attract industry. The results of the survey, the most thorough and comprehensive to date on the subject, were announced today at NACORE's 20th Annual Symposium and Exposition in Chicago.
 "The majority of cities and states view incentives as essential to their efforts to attract and retain industry, feeling they are at a competitive disadvantage without a full complement of incentives," said Mark Klender, national director, corporate real estate services, Deloitte & Touche Realty Consulting Group. Klender, who spearheaded the survey, also noted that "...many communities may question the bottom- line effectiveness of incentives, yet companies big and small eventually expect -- and demand -- incentives."
 Seventeen percent of NACORE respondents felt that they would be better off without incentives. In contrast, nearly 50 percent of AEDC respondents concurred that they would be better off if no jurisdictions were allowed to offer incentives. "Many economic developers view incentives as a necessary evil," Klender stated. "The competition between jurisdictions to attract business is fierce, and although corporate real estate executives first qualify potential locations with a long list of other factors, incentives are playing a major role in the battle for new industry."
 When ranking incentives in order of importance, both corporate real estate executives and economic developers named infrastructure improvements the most important. Other incentives ranked important by both groups of respondents were property tax abatement and regulatory flexibility.
 According to the survey, 63 percent of economic developers reported that organizations are seeking more incentives than they did three years ago, with manufacturing operations the greatest seekers of incentives, and retailers the least frequent seekers.
 The Realty Consulting Group of Deloitte & Touche, the national real estate consulting unit of Deloitte & Touche Real Estate Services, offers comprehensive services in real estate investment, development, management ownership and usage. They are part of Deloitte & Touche Tohmatsu International, a global leader in professional services with 56,000 people in offices in more than 108 countries.
 NACORE is the international association and educational resource for 3,400 member corporate real estate executives who manage real estate assets for corporations active in a range of industries, as well as professionals from related service businesses such as architecture and brokerage.
 -0- 6/28/93
 /NOTE TO EDITOR: Mark Klender is available for interviews to interpret the survey's results. A complete summary of survey results, including comparisons by region, are also available for media review./
 /CONTACT: Susan Kolon of Deloitte & Touche, 312-946-2920/ CO: ST: IN: SU: ECO


SH -- NY022 -- 5479 06/28/93 09:42 EDT
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Date:Jun 28, 1993
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