By STEVE SOUTHWELL
The Lewisville City Council approved a reinvestment zone and property tax breaks for the new Mary Kay Cosmetics manufacturing and research & development campus Monday night.
Mary Kay announced in November that it is moving its global manufacturing and R&D facility from its current location on Regal Row in Dallas to Lewisville. The new location is a 26.6 acre tract on the northeast corner of Denton Tap and Vista Ridge Mall Drive. The company expects to move its 500 employees here.
The City Council action establishes a reinvestment zone, and approves a 90 percent tax abatement for the company, incentivizing their move. The abatement applies to real estate property taxes and business personal property. But, the real estate tax abatement ony applies on the improvements to the property, in excess of the current value. The land value— currently on the tax rolls at $4.4 million— is not included in the abatement.
The company, in turn, is required to invest at least $75 million in the facility, and occupy 330,000 square feet in order to qualify for the abatements.
Lewisville expects Mary Kay to spend $44.2 million on the land and construction, and $30.8 million under the business personal property category, which includes furnishings and equipment subject to property taxes. The company will have to maintain operations and an employment of at least 500 at the facility to remain eligible. The median wage of its employees must be at least $45,000, and they may not hire any undocumented workers.
Mary Kay will also invest $15,000 a year for over the term of the agreement towards community activities or charitable efforts.
In addition to Monday night’s action, Nika Reineke, Lewisville’s director of economic development and planning, said that an additional economic development agreement known as a “380 grant agreement” would provide additional incentives.
The 380 deal, which will come before the council probably at the July 11 meeting, will waive 75 percent of the company’s building permit fees, and 100 percent of its water and sewer impact fees. It would also refund any Lewisville sales tax the company pays on construction materials and furnishings for the building, if purchased in the city. The deal would grant a 90 percent rebate on inventory taxes for 10 years.
Reineke said Lewisville has agreed to support Mary Kay’s application for the County and State incentives should they decide to apply for various available funding sources.
The tax abatement agreement calls for Mary Kay to complete construction of the new facility by December 31, 2018.
Swann said the city was confident that Mary Kay would be in Lewisville for the long haul, and that the facility would continue to provide tax revenue after the agreement expires.