There are many different economic incentives available to help area manufacturers expand and strengthen their business. From tax abatements to economic development grants, local and state agencies offer these incentives to promote job creation and economic growth in our communities. Incentives can often mean the difference between a company starting a project or shelving it.
But are the incentives worth it?
At its first meeting of 2019, members of the Partnership’s Manufacturing Council took an in-depth look at economic development incentives and what manufacturers should know if they want to take advantage of them. A panel of manufacturing executives shared their experiences with a few different kinds of incentive programs, including the challenges they faced in going through the process of applying for the programs.
The panel, which was moderated by Jerry Sheldon, the Council’s executive-in-residence, featured:
- Jeff Gicewicz, vice president of corporate holdings at Try-It Distributing
- John Hannon, partner at Triad Recycle and Energy, Inc.
- Lou Panzica, president and CEO at Power Drives, Inc.
Examples of available incentives
Power Drives, Inc. explored grant monies and tax credits from the Erie County Industrial Development Agency (ECIDA) that could have helped the company move an existing manufacturing operation in the Southern Tier to its headquarters facility in Buffalo. The company—which designs and manufactures a wide range of components, fluid conveyance assemblies, and engineered systems for customers around the world—ultimately decided not to apply for incentives.
Triad Recycling participated in an environmental incentive program through Empire State Development (ESD). They obtained grants to help install and then expand a processing line for recycling shingles. The company also applied to the New York Power Authority for grants to help install a natural gas filling station for its vehicles and to the New York State Energy Research and Development Authority (NYSERDA) for incentives to help fund an electric grinding line.
Try-It Distributing leveraged assistance from green initiatives at the state level that promote incentives companies can use to make their processes environmentally friendly. The company applied to a greenhouse gas reduction initiative and received a NYSERDA grant that enabled it to convert its leased fleet of nearly 50 delivery vehicles to compressed natural gas.
The panelists also noted that many other types of incentives are available from utilities such as National Fuel Gas and National Grid.
5 best practices for exploring incentives
The panelists offered some guidance and best practices that local manufacturers can use as they explore the potential of economic development incentives:
Have a Project Plan. A written plan of the project with specific details, including detailed forecasts on how the project will help the company down the road, is a key starting point. Not only will such a plan guide the project, it will aid in the application process for incentives and demonstrate to the granting agencies the need for the project.
Think Ahead. Start the incentive application process early enough to align with the targeted project schedule. Typically, an application process can take up to a year or more before incentives are granted.
Do the Research. There’s a wealth of helpful information online from agencies such as the ECIDA, ESD, NYSERDA, and others. Reach out to them directly—they’ll help you understand available incentives and how they can benefit your company.
Understand the Costs. As you work to narrow down your choices, look closely at the criteria of each incentive you’re considering. That will help you determine if there is the potential that monies will have to be repaid if certain criteria are not met. Also, it’s important that you understand the tax issues related to any funding you may receive.
Be Prepared. Ensure that your company has the runway to complete the project should an application for incentives be turned down or should outside factors impact your receipt of the incentive funds.
The Partnership can help
“If you are considering a project and the potential for available incentives, call us at the Partnership,” Dottie Gallagher, president and CEO, reminded attendees at the Council meeting. “With seats on the ECIDA board, the New York State Regional Economic Development Council, and other organizations, we know what is out there and can help guide our members to the proper resources.”
The Manufacturing Council would like to extend our thanks to the panelists for their participation and leadership and to our sponsors.