Dive Brief:

• The Indiana Economic Development Corp., a business-development arm of the state, has offered Midwest Fertilizer a tax and training incentive package worth up to $3.6 million to build a $2.8 billion factory in southwest Indiana, according to the Evansville Courier & Press.

• The deal, which has the backing of Indiana Gov. Eric Holcomb, would give the company up to $2.9 million in tax breaks, plus a maximum of $400,000 in training grants, in exchange for creating 2,500 temporary construction jobs and 185 permanent positions upon build-out, as well as $300,000 in conditional incentives.

• U.S. Vice President Mike Pence had opposed the bundle of incentives while serving as governor of Indiana. With the new state leadership on board, however, construction is expected to begin in 2018 and wrap up in 2021.

Dive Insight:

Site selection plans by foreign and domestic companies tend to generate excitement among states, spurring each to put together attractive financial packages to increase their appeal. Taxpayers, too, see it as an opportunity for new jobs and economic growth. But critics contend that the millions in tax credits and other benefits states are doling out might not result in the expected economic boon.

For example, Taiwanese electronics manufacturer Foxconn announced recently that it plans to invest $10 billion in a flat-panel display factory in Wisconsin over a five-year period. The state is rolling out the red carpet for the company, offering up to $3 billion in tax credits, according to The Washington Post. That could cost Wisconsin $230,700 per worker for each of the 13,000 jobs Foxconn said it would eventually create there.

Benefits for the local community can be worked into the deal, however.

Wisconsin wooed German candymaker Haribo with a financial incentives package tied to job creation, training and capital investment for its planned $242 million factory in the state. As part of the deal, Haribo is buying the land on which it will build the facility from the village of Pleasant Prairie, WI.

In March, South Korea–based LG Electronics said it would bring production capabilities to the U.S. with a $250 million washing machine factory in Clarksville, TN. The state reportedly offered LG an incentives package in return for the company performing infrastructure improvements around the proposed factory site, undertaking workforce training and implementing a program to hire U.S. veterans.