In office leasing, we usually consider the physical and financial elements that are obvious to us. Rent, free rent, tenant improvement allowance, building design and the other details take a large portion of our mental space and time, however make room for more. When Donald Trump sails into town to consider building a new casino or hotel, or when a large manufacturing firm sniffs around a city, the newspapers and news programs are full of stories how the mayor rolled out the red carpet, the aldermen pressed flesh, the governor offered a proclamation and union representatives grinned ear to ear. Why? It's economic development. Whether it is a jumbo jet manufacturer or brassiere manufacturer, economic development of the cities, counties and states is so aggressive to take on Herculean proportions. Big companies mean big jobs, big construction, big wages, big taxes to pay for new fire trucks, new roads; it's the American capitalist experiment in microcosm.
But you do not have to be General Motors to receive attention. Yes, the large companies are trophies to some cities, but the smaller companies, millions and millions of them run the engine consistently, day in and day out. Because of many companies relative obscurity as compared to large corporations, so too do the economic development groups tend to overlook them. However, with some effort, you can get them to notice you and find gold.For whatever reason, manufacturing firms more so than others seem to get the attention of economic developers. But not-so-large firms do also. Take a small widget manufacturer employing 46 people that can no longer use its 100 year old building in an urban area and wishes to relocate to a single level, new building with room for growth. Remember, it is the job of economic development groups to develop economic growth, large and small. With a little prodding, but not as much fanfare, the economic developers will wine and dine, show slide shows indicating the values and benefits of certain communities, make introductions to other companies that have already made the move, introduce banks that are ready and willing to lend, suppliers who are willing to supply and customers who are ready to buy; all just for the asking.These groups do a wonderful job in convincing legislators to reduce or abate real estate taxes as an incentive to build in order to get the brass ring of the employees working and spending their paychecks in their community. They are the gateway to low interest loans, grants for new technology or tax deductions for each new employee hired. There are so many different possible goodies economic developers can provide or influence that it can be like Christmas morning.
Okay, good for manufacturers, but you’re an office user, insurance, book sales, professional head hunter, advertising, franchiser, or the executive/administrative office for a manufacturer in another city. The opportunities of economic development incentives also apply to you. But you have to go after them as opposed to them finding you. Contact the economic development department in your county, city and state and have them explain the different possibilities. Some cities may have very positive elements while others may have negatives like a stiff employee earnings tax or higher than normal business taxes. Although you are an office user, there are state and federal dollars available for job growth in service industries. These all need to be laid out for comparison. When the real estate market is very difficult for the tenant and finding good alternative sites to create options for your self is tuff, these economic development agencies can be just the leverage you need to either ferret out unknown opportunities of office space or even just create the added leverage you need to better your position at another location. Your employees represent high paid salaries (usually much better than manufacturing): very prime prizes for any economic development group.
A large firm really wanted to remain in their present building but the rent being offered by the landlord was much higher than normal because of the tight market. Moving was not of interest because of the cost and the proximity to several big clients. Moving to the county was quite possible but not of real interest. When they thought the negotiations would produce no more fruit with the building owner (the landlord knew there was no other spot in downtown for them to go), the tenant was introduced to the economic development team for a fast-growing, wealthy suburban community with plenty of office space and plenty of land on which to build a building. After having been informed of every possible economic enticement and meeting the mayor, the economic development team met the tenant as a piece of land worthy of developing. Word was quickly disseminated of the tenant's strong interest and it was made sure that the owner of the downtown building was particularly aware. Within several days, faced with the "reality" that the tenant had good, viable options and was poised to move, the downtown building's negotiations quickly improved to a point where a deal was set. Not really mischief, but another important reminder to always have options and choices for use as real alternatives or just negotiating strength.
If you do end up using the benefits of an economic development program, they are also excellent motivation builders for your employees when they hold open houses at your new office and rain praise on your company.
And do not discount the value of your present city or county from where you may move.Once aware that you may be leaving, (and if they don’t, then tell them) your own community usually will take notice, rally the troops and develop a package of incentives to keep you. Better late than never.
Nothing contained herein is to be considered legal advice. Always seek legal advice when evaluating any legal document
