CDFA // BNY MELLON DE DEVELOPMENT FIN FINANCE WEBCAST SERIES The - PowerPoint PPT Presentation

CDFA // BNY MELLON DE DEVELOPMENT FIN FINANCE WEBCAST SERIES The Landscape of Mega Project Initiatives The Broadcast will Begin at 1:00pm Eastern Submit your questions in advance using the GoToWebinar control panel View previous webcast recordings online at www.cdfa.net WWW.CDFA.NET / / WWW.BNYMELLON.COM

Hello! Welcome to the webcast. Malcolm Guy Coordinator, Government & External Affairs Council of Development Finance Agencies Columbus, OH Are you a CDFA Member? Members receive exclusive access to thousands of resources in the CDFA Online Resource Database. Become a member today at www.cdfa.net WWW.CDFA.NET / / WWW.BNYMELLON.COM

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The Landscape of Mega Project Initiatives Panelists Tam ammy Da Davis is, , Mod oderator Senior Relationship Manager The Bank of New York Mellon Isabel Isa l Cyr Cyr, DF DFCP Sa Sandi McNin inch Senior Consultant General Counsel The CAI Global Group Virginia Economic Development Partnership Dan Taylo Da lor Chr Chris istina Win inn CDFA Training Institute Managing Director, Business & Neighborhood Development Director, Business Investment Group We offer 17 courses in development Baltimore Development Corporation Arlington Economic Development finance designed for all skill levels. Learn more and register today at www.cdfa.net WWW.CDFA.NET / / WWW.BNYMELLON.COM

The Landscape of Mega Project Initiatives Tammy Davis Senior Relationship Manager, Corporate Trust The Bank of New York Mellon Detroit, MI What are you reading? Your development finance toolbox isn’t complete without a set of CDFA reference guides. Members save 15% on every purchase. Order today at www.cdfa.net. WWW.CDFA.NET / / WWW.BNYMELLON.COM

The Landscape of Mega Project Initiatives Isabel Cyr, DFCP Senior Consultant The CAI Global Group Montréal, Québec What are you reading? Your development finance toolbox isn’t complete without a set of CDFA reference guides. Members save 15% on every purchase. Order today at www.cdfa.net. WWW.CDFA.NET / / WWW.BNYMELLON.COM

THE LANDSCAPE OF MEGA PROJECT INCENTIVES A SITE SELECTOR’S PERSPECTIVE JU JUNE 18, , 2019 Presented by: Is Isabel Cyr Senior Consultant

WHO WE ARE C A I G L O B A L ADVISING COMPANIES TO MAKE The CAI Global Group is a location advisory INFORMED, COST-EFFECTIVE, AND firm with over 35 years of experience assisting businesses by providing location TIMELY INVESTMENT PROJECT advice for their investment projects. DECISIONS MONTREAL TORONTO NEW YORK PHILADELPHIA The CAI Global Group Inc.

SOME OF OUR CLIENTS The CAI Global Group Inc.

Mega Project Incentive Trends The CAI Global Group Inc.

The Expected Outcome of Incentives MATRIX OF WELFARE OUTCOMES FROM THE USE OF INCENTIVES D O M E S T I C W E L F A R E Investment Healthy Gain Poaching Competition Beggar-thy- Winners’ Curse Waste Neighbor Gain Waste I N T E R N AT I O N A L W E L F A R E Source: Incentive Bidding for Mobile Investment: Economic Consequences and Potential Responses. By Andrew Charlton. OECD. January 2003 The CAI Global Group Inc.

Factors Affecting Incentive Awards Capital Creation and Associated Undeveloped investments retention of jobs wages locations Source: The CAI Global Group Inc., 2019 The CAI Global Group Inc.

MEGA PROJECT IN INCENTIVE AWARDS BY YEAR 35 32 31 30 30 24 24 25 23 22 20 18 15 15 15 13 11.3 MEGA PROJECTS A YEAR IN THE US ON AVERAGE 12 12 12 11 11 11 10 10 10 10 6 6 6 6 4 4 5 3 3 3 2 2 2 1 1 1 0 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: CAI Global Analytics, data range: 1984 to 2018 The CAI Global Group Inc.

Mega Project Incentives by State 2 2 # OF MEGA PROJECT STATE TOTAL INCENTIVES INCENTIVE PACKAGES 32 4 5 2 13 9 NY $13.288 billion 32 4 36 1 4 30 WA $11.944 billion 2 8 2 19 5 MI $11.125 billion 36 2 15 9 2 3 6 LA $9.716 billion 29 3 1 5 15 12 11 OR $5.691 billion 9 15 4 11 3 WI $5.053 billion 4 2 4 5 7 18 AL $4.271 billion 18 10 MO $4.213 billion 15 29 16 NJ $4.154 billion 30 10 TX $3.834 billion 16 Source: CAI Global Analytics, data range: 1984 to 2018 The CAI Global Group Inc.

MEGA PROJECT IN INCENTIVES BY TYPE OF PROJECT Energy and Natural Resources Facility Corporate Offices 9% 20% Research Facility 6% Retail: 3% Air Transport Facility: 2% Other Mixed-Use Development: 2% 14% Data Center: 2% Distribution Center: 1% Other: 4% Manufacturing Facility 51% Source: CAI Global Analytics, data range: 2014 to 2019 The CAI Global Group Inc.

Main Industries for Mega Projects 100,000 Consumer products (Logistics & e-commerce), 3,358 10,000 Total jobs created over the last five years Rubber, 1,425 Software & IT services, 537 Electronic components, 1,110 Chemicals, 295 1,000 Metals, 197 Plastics, 750 Automotive OEM, 324 Renewable energy, 55 Circle diameter indicates the average number of jobs created for every project, over the last 5 years in the United States 100 1.0 10.0 Billions USD Total amount of money invested over the last five years The CAI Global Group Inc. Source: CAI Global Analytics, data range: 2014 to 2019

The Location Decision Where Incentives Fit In The CAI Global Group Inc.

The Site Selection Process Cost model and Can bias the list of jurisdictions decisional matrix B E N C H M A R K P R E L I M I N A R Y C O M M U N I T Y D U E D I L I G E N C E L O C A T I O N L O C A T I O N S R E S E A R C H A P P R O A C H R E V I E W C H O I C E & S I T ES Request for and incentive proposal Close the gap and (as a separate RFP or in the RFI) influence final decision T H E R O L E O F I N C E N T I V E S I N S I T E S E L E C T I O N Source: The CAI Global Group Inc., 2019 The CAI Global Group Inc.

The Site Selection Process More official project announcements Financing more lengthy and involving more stakeholders and Scope of project redefined along the way complicated communication team B E N C H M A R K P R E L I M I N A R Y C O M M U N I T Y D U E D I L I G E N C E L O C A T I O N L O C A T I O N S R E S E A R C H A P P R O A C H R E V I E W C H O I C E & S I T ES Incentive re-negotiations and lobbying New jurisdictions added along the efforts more present way L A R G E S C A L E P R O J E C T S : 1 T O 2 Y E A R S V S S M A L L S C A L E P R O J E C T S : 6 M O N T H S Source: The CAI Global Group Inc., 2016 The CAI Global Group Inc.

Incentives Role in Financing Reduce in initial costs Reduce operational costs  Capex or investment grants  Job tax credits  Grants to offset start-up costs  Utility rate reductions  Infrastructure grants  Property tax abatements  Recruitment incentives  Sales tax exemptions  Training incentives  Inventory tax exemptions The CAI Global Group Inc.

 US Sit  Canadian Sit ites ites State A State B State C State D State E Province A Province B Site 22: Site 18: Site 1: Site 4: Site 6: Site 9: Site 13: $57,300,000- $2,050,000 $21,841,360 $112,745,000 $269,877,941 $191,445,624 $74,100,000 $87,300,000 Site 23: Site 19: Site 2: Site 5: Site 7: Site 10: Site 14: $55,380,000- $2,050,000 $31,877,338 $117,313,000 $214,820,574 $150,408,024 $74,100,000 $85,380,000 Site 24: Site 20: Site 3: Site 8: Site 11: Site 15: $55,300,000- $1,750,000 $100,059,000 $123,771,946 $161,445,624 $74,100,000 $85,300,000 Site 21: Site 12: Site 16: $112,807,395 $150,408,024 $74,100,000 Site 17: $150,408,024 Case Study 1: Incentive Offer Comparison The CAI Global Group Inc.

Case Study 2: • 1.3 million sq. ft. of building on 1,000+ acres with water treatment onsite • Financial incentives included: • Exchange of land for property tax abatement (with first right of refusal) (custom local incentive agreement) • Free dismantling of water treatment facility onsite and upgrade of municipal water treatment capacity and extension of line (using Rural Division’s Economic Infrastructure Grants Program) • Direct grant from state to company tied to job creation (State Discretionary Program) The CAI Global Group Inc.