A global manufacturer’s European Division needed to quickly expand its North American presence by establishing a new continental headquarters. The timing was critical; the business unit’s leaders were quite concerned about the availability of a specialized labor force in North America and needed to move quickly to maintain business continuity. The facility’s size and location were also critical to continuing its growth.
Because the new location would become its overseas headquarters, the company knew it needed a manufacturing facility with the ability to expand in the next few years, and not just meet today’s needs.
After identifying its priorities and goals, the global manufacturer contacted Allegro Real Estate Brokers & Advisors to set the search in motion, knowing that Allegro had a history of helping large, high-growth organizations expand through the right commercial real estate decisions.
Finding the Right Fit for a Massive Expansion
During early communication, the global manufacturer laid out its aggressive expansion and facility needs. To achieve these demanding goals, however, it required both a manufacturing and highly technical labor pool, as well as economic incentives to make the move more attractive. For support, the manufacturer turned to Allegro’s experienced team.
Once Allegro understood the global manufacturer’s needs, the team immediately explored and evaluated locations that met the client’s objectives. Allegro’s real estate and economic incentives teams collaborated to ensure the project moved forward efficiently, maximizing leverage with both real estate options and economic development agencies.
During this evaluation, Allegro completed a labor analysis to identify a set of metropolitan statistical areas (MSAs) with highly educated, technical labor markets equipped to handle the manufacturer’s demands. Allegro also completed a wage study to understand the relative cost of labor in each of the markets. This helped the client evaluate the labor pools, how much it could allot to annual payroll, and how each impacted its long-term growth plans in each respective market.
To accommodate the client’s timeline, Allegro moved quickly to develop and distribute Requests for Incentives. These Requests for Incentives were submitted to state, county, and municipal economic development agencies. Multiple rounds of negotiations were held simultaneously with these agencies.
Identifying the Perfect Location and Earning Attractive Economic Incentives
After exploring each option Allegro presented, the global manufacturer chose a 60,000-square-foot manufacturing facility in Greenville, South Carolina as its North American headquarters. The facility would create approximately 75 new jobs on a payroll totaling $4.2 million over five years, with an average annual salary of $57,000 plus benefits.
The initial investment required $3.9 million and an additional investment of $3.8 million in the third year to support an expansion of the facility. The teams’ efforts also resulted in a funding package totaling more than $7 million which included cash grants, job tax credits, corporate tax credits, sales tax exemptions, and a 30-year real estate tax abatement.
The economic incentive package significantly reduced the client’s initial capital investment and ongoing operating costs, ensuring it could infuse the saved capital into operational growth and new employees.
Delivering a Substantial Economic Incentive Package to Grow for Decades to Come
Allegro’s joint team efforts ensured that the global manufacturer received the most attractive deal possible, and granted it the ability to grow in (and beyond) North America over the next three decades.
Are you facing a complex manufacturing need that could qualify for economic incentives? We can help. Contact us to discuss your real estate needs today.
