CC MEETING: October 18, 2016
DATE: October 11, 2016
TO: Leonard Martin, City Manager
FROM: Andrea Roy, Economic Development Manager
Title
Consider A Resolution Authorizing The City Manager To Enter Into A Tax Incentive Agreement With Lennox Industries, Inc.
Body
BACKGROUND:
Lennox Industries is a global leader in the residential and commercial heating, air conditioning, and refrigeration industry. It currently operates its research and development facility at 1600 Metrocrest Drive in Carrollton, employing about 300 people. The existing 150,000 square foot facility is owned by Lennox and has been in operation since 1977. Lennox's research and development team provides continuous innovation in the heating/cooling market through development of cutting edge technology that increases energy efficiency, ease of use, and consumer cost reduction. The company has been in business since 1895 and is currently headquartered in Richardson.
In order to accommodate Lennox's growing operations and remain competitive in the market, the company has requested a five-year business personal property tax grant equal to 50% of taxes paid on an estimated $19 million to $30 million investment of new machinery and equipment. This expansion will also consist of approximately $6 million to $10 million in building and site improvements, including a physical expansion onto the existing parking lot for additional warehouse space, new production space, and climate testing rooms, which are estimated to be completed by mid-2017. The expansion is estimated to create an additional 30 jobs over the next two years, with an average annual salary exceeding $85,000.
FINANCIAL IMPLICATIONS:
Current Taxes: According to the Dallas Central Appraisal District, the current value of the real property at 1600 Metrocrest is approximately $4.2 million, which generates approximately $25,000 annually for the City. Additionally, Lennox currently pays about $28,000 annually in business personal prope...
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