How do city economic incentives work?

The city of Plano has attracted some big corporate names in recent years, and almost all the high-profile companies like Toyota and Liberty Mutual have benefited from economic incentive agreements.

But how do these incentive agreements work? And how much does the city spend on them each year?

The city has two main tools to sweeten deals for companies looking to move to Plano: grants and tax abatements.

The city has offered $53 million in economic incentive grants since fiscal year 2006-07. City officials estimate the companies receiving these grants have invested nearly $2 billion in property improvements.

Tax abatements are another tool for the city. Liberty Mutual’s office in Legacy West, for instance, will only pay half of the city’s typical property taxes for its first 10 years under an agreement with the city, which could amount to more than $8 million in savings over that span.