Whether a local business is expanding or a new business is coming in, there is a lot that goes into making a project happen. I have now been working as the Bates County Economic Developer for 8 months and I have just finished bringing in my first business to the county. While it is wonderful to see the building going up north of Adrian, what people do not realize is how much went on behind the scenes to make that happen. The whole process took about 7 months and it all started on my 3rd day at this job. So, today I will be explaining what all goes into a business deal and use Heritage Tractor as an example.
When a business is looking to expand or relocate they generally will look at multiple locations. Sometimes they will send out a Request For Information (RFI) forms for cities and counties to fill out about their sites and sometimes they will contact a city or county directly if they know there is opportunity for them there. With Heritage, they were looking to expand and they knew the general region they wanted so they contact us directly. Once a business has it narrowed down to multiple sites, they will sit down with the necessary parties to see what incentives there are to offer. A lot of times if there is close competition, a specific incentive is what will set your site above the rest.
There are a lot of different incentives out there to possibly offer any given business. One of the main incentives offered in Missouri, and that Bates County has in place, is the Enhanced Enterprise Zone (EEZ) and that is a property tax abatement for improvements to real property. To put it simply, a business can abate property taxes for up to 10 years for any new construction or building improvements. There are of course stipulations in place in that it has to be a specific type of business, there has to be a certain amount of investment, and a certain amount of jobs. There is also an EEZ Board that chooses whether a business gets this abatement. As you can see there is a lot to the EEZ and that is just one form of incentive.
Infrastructure is another possible obstacle to overcome in the process of trying to attract a business. A lot of times there is already water, sewer, and electricity in place to a site, but sometimes there is not. If a business wants a lot in the middle of a field that was previously farm land, there most likely will not be any of this infrastructure. This is where a city or county has to come in to decide how much, if any, they would be willing to put in for this business. And it all depends on the situation because sometimes a business will come in and if they love a site they will just pay all expenses.
While all of this is going on it is important to remember that there is generally a level of confidentiality that a business will ask for. There are even some businesses that go as far as not giving you their real business name, but will give you a fake one to work off of. If a city or county fills out a Request For Information, it is very common practice for that business to come check out the town and site without their knowledge. There are a lot of reasons why a business will work in this way, but what is important here is that all the parties involved in the deal do what is asked of them in terms of confidentiality. There are stories out there where a business is very interested in a site and getting ready to buy the property when all of the information in leaked, so they pull out of the deal all together.
At this point, once incentives and infrastructure is discussed it could then take a few months until the property is bought. The business has to decide where they want to locate and get everything in place before any agreements can be put in place. For Heritage, the first meeting was in September and they officially bought the property at the end of December. This is when everybody starts working hard to make sure that all incentives are put in place that were agreed upon. While the EEZ only takes approval from the EEZ Board, there are some incentives that take 60-90 days to get into place. There can be a lot of pressure because the business wants to start building or doing their improvements, but most of the time you cannot start doing anything until all of the incentives are in place.
As you can see, there are multiple scenarios that could possibly happen in a business deal. While it would be great to just have a packet of information that every business works off of that is not how economic development works. It is my job to decide what incentives to give (if any), the best site for a business, and how best to assist with expansions. I often times am the person behind the curtain that is doing work most people do not know about. It makes the end result that much better though, because I am thrilled to have a business like Heritage Tractor coming to Bates County and it was worth all of the work that all parties put in!