[The migration of my old blog to this site continues. This one is from 2012. So the title should be “That Week in Investment Incentives”. Very little has changed since 2012. Except I am a slower runner. Enjoy!]
Following previous posts (and on-going research) on investment incentives, here are links on a couple of big incentive deals this week.
Kohl’s received $60+ million in incentives to stay in Wisconsin.
NetApp (IT) receives just under $12 million to expand employment in the research triangle.
LivingSocial gets up to $32.5 million to expand in D.C.
A few quick observations. First, all of these incentives are examples from the US. There were a few Canadian incentives announced this week, but these tend to be much smaller and are usually loans. The US is off the charts on the size of incentives offered.
Second, I put a dollar amount for each incentive, but calculating the current value of the incentives is quite complicated. Some of these incentives are cash, others are future tax incentives, and some are infrastructure improvements that probably have spillovers to the local communitiy.
Third, there are some interesting political stories in these incentive programs. The Kohl’s story seems especially interesting.
Fourth, all of these incentives are for exisiting firms threatening to leave or promising to expand. None of these are new investments. No normative claim on whether this is good or bad. Just interesting.