C&I programs increase development project feasibility.

• Author: Schram, Tim
• Position: Credit and incentive

State and local jurisdictions offer a multitude of credit and incentive (C&I) programs to encourage companies to make investments in economically or environmentally blighted areas, and can help promote adaptive reuse efforts.

Many jurisdictions, for example, use enterprise zone (EZ) designations or boundaries for locations in which the state wants to rehabilitate, by promoting capital investment and job creation or retention. In addition, states are generally willing to share in the responsibility for revitalizing environmentally blighted locations through "Brownfield" designations.

A Brownfield program is intended to assist with the cost of restoring land or repairing existing buildings in areas that have been environmentally polluted or contaminated from a previous occupant's activities. Brownfield and EZ programs can help make marginal areas more attractive to potential investors and developers.

C&I Initiatives

Credits are offsets to tax liabilities in response to a capital investment or job creation activity. Credits are available for investment in certain categories of purchases, such as historic property, manufacturing machinery and equipment, or research and development equipment.

Eligibility for the use of tax credits is generally straightforward: Credits are an immediate deduction from a tax liability once the purchase has been made.

Incentive programs are much more subjective and may take many different forms. State and local governments use incentive programs to encourage or induce capital investment or job creation activities. Common incentive programs involve abatements of property, income or sales taxes; convertible loans (forgivable loans); training grants; or sales tax rebates.

Generally, C&Is are offered to companies that consider expanding or retaining jobs or facilities in a state. To be eligible for many programs, companies must notify the state that they are considering an expansion project. The C&Is are determined by the level and type of project.

States generally, however...