Archive for category: Incentives

The State of Site Selection: Five Trends Defining 2026 Projects

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As we prepare for 2026, several key trends are shaping the site selection landscape. Companies that understand these shifts will be better positioned to make decisions that support long-term success.

Trend 1: Reshoring Remains Strong

Manufacturers continue to move production closer to U.S. customers to reduce risk and improve supply chain control.

Trend 2: Workforce is the Deciding Factor

Incentives can help, but access to skilled labor remains the most important variable for most projects.

Trend 3: Sustainability is a Priority

Green standards and renewable energy integration are no longer optional. Communities are building programs to support companies that lead in this area.

Trend 4: Incentives Are Becoming More Targeted

States are refining programs to focus on industries such as advanced manufacturing, clean energy, and healthcare.

Trend 5: Competition Among States Intensifies

Communities are investing heavily in infrastructure and incentives to remain competitive in attracting projects.

The Bottom Line

2026 will be a year when thoughtful, data-driven site selection delivers a distinct advantage.

Behind the Numbers: How to Calculate the True Value of Incentives

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When negotiating incentives, it is easy to focus on headline numbers. A 10-year property tax abatement worth millions may sound impressive, but the real question is: what is the actual value to the company?

Key Considerations

  • Net Present Value: A dollar today is worth more than a dollar 10 years from now.
  • Compliance Costs: Reporting and performance obligations can reduce the net benefit.
  • Stacking with Other Incentives: Combining multiple programs may deliver more value than a single large award.
  • Impact on Cash Flow: The timing of benefits matters as much as the total amount.

An Example

A company promised $5 million in abatements over 15 years realized the net present value was closer to $3 million. However, the addition of workforce training and infrastructure support raised the overall benefit to more than $6 million.

The Takeaway

Evaluating incentives requires more than looking at face value. A disciplined financial analysis ensures companies capture the true return on their negotiations.

The New Standard for Green Manufacturing Incentives

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Sustainability is no longer optional. Companies in manufacturing and related sectors are being held to higher standards for energy use, emissions, and environmental impact. Incentive programs have evolved accordingly.

Current Focus Areas

  • Electric vehicle production and infrastructure
  • Renewable energy integration at industrial sites
  • Carbon reduction through advanced processes
  • Recycling and circular economy initiatives

Examples of Support

  • Federal clean energy tax credits
  • State grants for renewable energy adoption
  • Utility rebates for efficiency improvements

Why It Matters

Green incentives reduce upfront costs while helping companies meet regulatory and market expectations. More importantly, they position businesses to attract customers and talent who value sustainability.

Our Perspective

The most successful companies will be those that view sustainability incentives not just as compliance tools but as investments in competitiveness.

Workforce Incentives: The Overlooked Advantage in Location Decisions

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A skilled workforce remains one of the most important drivers of site selection. Yet too often, companies underestimate the value of workforce incentives. These programs not only support hiring but also reduce training costs and improve retention.

Types of Workforce Incentives

  • Customized Training Grants: Funding for job-specific skills programs.
  • On-the-Job Training Subsidies: Wage reimbursements for new hires in training.
  • Partnerships with Technical Schools: Programs that align curricula with employer needs.

Why They Matter

A community’s ability to deliver skilled workers quickly can shorten ramp-up times for new facilities. For companies expanding in competitive industries, workforce incentives may be as valuable as tax savings.

A Case in Point

One manufacturer we supported received more than $1 million in workforce training funds. The result was a well-trained team in place on day one, allowing the facility to meet production targets without delay.

The Bottom Line

Incentives tied to workforce development are not secondary. They are central to the long-term success of a new facility.

Election-Year Impacts: How 2026 Incentives Could Change

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Election years always bring uncertainty, and 2026 will be no exception. For companies planning new projects, understanding how political outcomes might affect incentives is critical.

What to Watch

  1. Federal Policy
    Incentives tied to clean energy, advanced manufacturing, and community development could see changes depending on the priorities of the next Congress.
  2. State Budgets
    State-level incentive programs often adjust following elections as new leadership sets fiscal priorities.
  3. Local Dynamics
    Mayors and city councils influence how aggressively communities pursue projects. Local leadership shifts can reshape incentive negotiations.

How Companies Can Prepare

  • Diversify Site Options: Keep multiple locations under consideration to adapt if programs change.
  • Engage Early: Establish relationships with economic development partners now.
  • Stay Informed: Monitor policy discussions that could affect key programs such as NMTC and workforce grants.

The Takeaway

While no company can control election outcomes, preparation and flexibility ensure that projects remain on track regardless of political change.

Q4 Strategy Check: Preparing Your Project Pipeline for 2026 Incentives

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The final quarter of the year is the time for companies to prepare their project pipelines for the year ahead. For those considering expansions or relocations, planning now can unlock significant incentives in 2026.

Why Start in Q4

Economic development partners and community development entities begin setting priorities months before the new year. Companies that wait until the spring often find that the most competitive opportunities are already in motion.

Steps to Take Before Year-End

  • Confirm Project Scope: Clarify investment levels, timelines, and job creation targets.
  • Identify Eligible Sites: Determine whether locations fall within incentive-qualified areas.
  • Engage Early: Reach out to local and state partners to signal interest.
  • Assess Financing Options: Consider how tools such as NMTC may complement traditional funding.

Positioning for Success

A thoughtful Q4 review can make the difference between an incentive package that closes in 2026 and one that lags behind competitors. At Five Points, we help companies use this time of year to sharpen strategy and strengthen outcomes.

Healthcare and Behavioral Health Projects: A New Era for NMTC

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The healthcare sector, particularly behavioral health, has emerged as one of the strongest fits for the New Markets Tax Credit (NMTC) program. Communities across the country face shortages of care, and NMTC financing is helping fill the gap.

Why Healthcare Projects Are Strong Candidates

Healthcare facilities in underserved areas align closely with NMTC’s mission of community impact. They create jobs, expand essential services, and improve quality of life. Behavioral health facilities in particular are often located in low-income census tracts, making them prime candidates.

Recent Trends

  • Increased demand for outpatient behavioral health services
  • Stronger partnerships between healthcare providers and community development entities
  • Greater emphasis on facilities that integrate behavioral and physical health care

The Financial Advantage

With NMTC, projects can secure below-market financing that covers up to 20 percent of total costs at closing. For facilities that often struggle with thin operating margins, this support can be decisive.

Our Perspective

Healthcare organizations considering new facilities should explore NMTC early. The combination of community need and program alignment makes these projects some of the most competitive and impactful in the allocation process.

The Biggest Mistakes Companies Make in Incentives Negotiations

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When companies pursue economic development incentives, the negotiations often determine whether a project captures meaningful value or leaves money on the table. Too often, businesses fall into predictable traps that weaken their position.

Mistake 1: Engaging Too Late

Many leadership teams wait until a site has been chosen before discussing incentives. By then, the leverage is gone. Incentive packages are strongest when communities are still competing for the project.

Mistake 2: Focusing Only on Taxes

Property tax abatements are important, but they are not the whole story. Workforce training, infrastructure improvements, and permitting support can be just as valuable.

Mistake 3: Underestimating the Timeframe

Communities require due diligence, public hearings, and formal approvals. Companies that assume a quick turnaround risk delaying their projects.

Mistake 4: Overlooking Compliance Requirements

Incentives come with commitments. Job creation numbers, capital investment thresholds, and reporting obligations must be carefully managed. Failure to deliver can lead to clawbacks.

How to Avoid These Pitfalls

Successful negotiations require preparation, timing, and a clear understanding of the community’s goals. At Five Points, we guide companies through the process so they can capture the full range of benefits without unintended surprises.

NMTC 101: What Companies Need to Know for 2026 Allocations

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The New Markets Tax Credit (NMTC) program remains one of the most powerful financing tools available for projects in underserved areas. With permanency now established, companies that want to benefit from the program in 2026 should begin preparing today.

What Is NMTC?

The NMTC program provides federal tax credits to investors who make qualified equity investments in low-income communities. For companies, this translates into below-market financing that can cover up to 20 percent of project costs at closing.

Who Qualifies?

To be eligible, a project must be located in a qualified census tract and typically involve job creation, community services, or other significant impacts. Manufacturing, healthcare, education, and community facilities are often among the strongest candidates.

Why Plan Now for 2026?

Securing NMTC allocation is competitive. Community Development Entities (CDEs) that distribute credits review projects months in advance. Companies that delay preparation until 2026 may find themselves behind others in line.

Steps to Take Now

  1. Identify Eligible Sites

    Confirm whether your project location qualifies.

  2. Develop a Financing Strategy

    Understand how NMTC would integrate with other funding sources.

  3. Engage with CDEs Early

    Build relationships that strengthen your application.

  4. Work with Experienced Advisors

    The complexity of NMTC transactions requires expertise.

The Takeaway

If your company is planning a project of $10 million or more in an eligible area, the time to begin the NMTC process is now. At Five Points, we guide clients through every stage, from confirming eligibility to closing transactions.

Incentives Beyond Taxes: Hidden Benefits Companies Overlook

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When companies think about economic development incentives, property tax abatements or state tax credits usually come to mind. Those tools are important, but they represent only part of the picture. Some of the most impactful benefits are not tied to taxes at all.

The Overlooked Incentives

Here are three categories of benefits that companies often miss:

  1. Workforce Training Programs
    States and local governments often fund customized training for new or expanding employers. This can include both classroom instruction and on-the-job training, dramatically lowering onboarding costs.
  2. Infrastructure Improvements
    Communities may invest in road upgrades, utility extensions, or broadband expansion to support a new project. These improvements can save millions in capital expenses.
  3. Site Preparation and Permitting Support
    Many jurisdictions fund site grading, environmental remediation, or expedited permitting. These efforts remove barriers that would otherwise delay progress.

Why It Matters

These “hidden” incentives often provide immediate, tangible value. A $1 million road improvement, for example, may not appear on a tax form, but it directly reduces the cost of capital outlay.

A Case Example

One manufacturer we supported received a modest property tax abatement but also $2.5 million in state-funded workforce training and infrastructure support. The latter proved to be the true difference-maker for the project’s return on investment.

The Bottom Line

If a company negotiates only for tax abatements, it is almost certainly leaving value on the table. At Five Points, we help uncover and secure the full spectrum of incentives that communities are willing to provide.

Five Points Strategic Advisors

info@fivepointsstrategies.com

711 Navarro St. | Ste 300-103
San Antonio, TX 78205

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