Company Relocation Plans on the Rise
Many revenue starved cities are eager to pull out the stops, dangling tax breaks and a slew of other incentives to bring in new businesses and jobs.

Competition among cities trying to keep businesses or lure new ones is heating up as more and more companies look to relocate to pare their costs of doing business. An improving economy will spur moves as firms feel more confident about their futures.
Los Angeles, for example, recently implemented a three-year holiday on business taxes for companies that are new to the city. The tax holiday helps bump L.A. off a list of the top 10 most expensive cities to do business in, though it still falls within the top 20, according to the Kosmont-Rose Institute’s Cost of Doing Business Survey.
The Kosmont Companies and the Rose Institute of State and Local Government at Claremont-McKenna College in Claremont, Calif., survey over 400 cities annually based on tax rates that affect businesses. Property taxes and business license fees carry the most weight in the survey. Business license fees represent the average for each city. The survey also looks at sales taxes, various utility taxes, parking taxes, economic incentives, transportation options and zoning restrictions.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
See Kiplinger's slide shows of:
•10 High-Tax Cities for Business
•10 Low-Tax Cities for Business
To order the full report or excerpts, visit the Kosmont-Rose website.
The push by cities to keep and lure companies is nothing new, of course. But as Larry Kosmont, president and CEO of Kosmont Companies, says: “Cities are really struggling right now…they have become much more in tune with economic development and trying to find a way to attract investment and jobs."
Setting up technology research centers is proving to be another effective way for many cities to lure large firms as well as to attract life services, information technology and other entrepreneurs who can go on to build lucrative businesses that in turn spawn other enterprises.
New York City, for example, recently subsidized the building of the Alexandria Center for Life Science at East River Science Park -- a biotechnology research facility located along the East River. Eli Lilly and Co., a pharmaceutical company with headquarters in Indianapolis became the anchor tenant, signing a 15-year lease to use the space to conduct cancer research.
Many states and cities are also doing a good job of persuading companies to stay. Navistar International Corp., for example, was in talks to move its headquarters from Illinois to any number of states where operational costs would be less expensive. The state put together a $65-million incentive package to keep Navistar from leaving, saving nearly 3,000 jobs.
Economic incentives aren’t the only draws. Companies also seek an educated workforce and good schools as well as cultural and other amenities. “They don’t want to be in a sterile environment,” says Jay Biggins, a partner at Biggins Lacy Shapiro & Co., a business location consulting firm.
And while incentives and amenities are important, companies looking for a specific skill set in its workforce may often have to be willing to do business in a more expensive city.
“There are a lot of ways to cut a deal, but in the end the company has to be where it wants to be. If you are in a place where the talent you need doesn’t exist or would be difficult to import it to, the low cost of doing business would be almost irrelevant,” says Rob DeRocker, a Tarrytown, N.Y.-based economic development consultant.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
Winning Strategies for Financial Advisers as Clients' Lives Evolve
How can the wealth management industry help make life transitions easier for the adviser and the client?
By David Conti, CPRC Published
-
How Advisers Can Establish Relationships With HNW Prospects
These strategies can help to build influence with high-net-worth individuals, who are often looking to an adviser for insight rather than solutions.
By Jeremy Green, CFP®, CTFA, CLU®, CEBS®, AEP®, EA, MSFS Published
-
Rising AI Demand Stokes Undersea Investments
The Kiplinger Letter As demand soars for AI, there’s a need to transport huge amounts of data across oceans. Tech giants have big plans for new submarine cables, including the longest ever.
By John Miley Published
-
What DOGE is Doing Now
The Kiplinger Letter As Musk's DOGE pursues its ambitious agenda, uncertainty and legal challenges are mounting — causing frustration for Trump.
By Matthew Housiaux Published
-
A Move Away From Free Trade
The Letter President Trump says long-term gain will be worth short-term pain, but the pain could be significant this year.
By David Payne Published
-
The Explosion of New AI Tools
The Kiplinger Letter Workers and consumers soon won’t be able to escape generative AI. Does that mean societal disruption and productivity gains are right around the corner?
By John Miley Published
-
Trump’s Whirlwind Month of Crypto Moves
The Kiplinger Letter The Trump administration wants to strengthen U.S. leadership in the cryptocurrency industry by providing regulatory clarity.
By Rodrigo Sermeño Published
-
Excitement Over AI Propels IT Spending
The Kiplinger Letter IT sales set to surge in 2025 as businesses rush to adopt generative AI.
By John Miley Published
-
Donald Trump Tests His Limits
The Kiplinger Letter President Encounters Legal Obstacles in Pursuit of Ambitious Agenda.
By Matthew Housiaux Published
-
Another Down Year for Agriculture
The Kiplinger Letter Farmers brace for falling incomes, widening trade deficits
By Matthew Housiaux Published