A Swiss-based pharmaceutical giant could build its first Texas manufacturing plant after a Dallas-area city approved millions of dollars in incentives tied to the $280 million project.
Novartis, the world's eighth-largest pharmaceutical company by revenue, was offered a total incentive package exceeding $3.2 million by the city council in Denton, Texas. This includes a real property tax abatement of 50% for 10 years on new improvements up to more than $2.3 million, as well as $894,688 of sales tax rebate and various grants by the city of Denton, according to city documents.
"If Novartis moves forward with this location, they estimate that the investment in the building, machinery, equipment and improvements to the land will be about a $280 million investment," the city's economic development department outlined in its proposal to city council members.
The offer comes as incentives have been the subject of debate around the country as some critics question whether the jobs and economic development resulting from the projects lured to an area are worth the reduced taxes that the owner has to pay.
Denton, a city nearly 40 miles north of downtown Dallas, is one of at least three potential sites being considered by Novartis for expansion of its radiopharmaceutical manufacturing operations. The city initially met with the company's staff in August with an incentive application submitted in October.
Texas has been part of Novartis' early plans ever since the Lone Star State was named, alongside Florida, as a place where it expected to build new manufacturing facilities, the company said in April. Novartis, in response to an emailed media request from CoStar News, cited its earlier announcement this year, with a spokesperson adding that, "We are unable to speak to our plans in Texas at this time."
According to a presentation to the Denton city council, Novartis is working with site selection firm Ryan on its economic incentives. If these plans become a reality, Novartis plans to create 150 jobs at the Denton facility with an average salary of more than $124,000.
In all, Novartis has nearly 200 operating sites worldwide, including nearly 70 offices in the United States. In April, the company said it planned to invest $23 billion in manufacturing and research developments in the U.S. over the next five years, joining more than a dozen global drugmakers expected to collectively invest more than $270 billion in planned new facilities.
If the company moves forward with a Denton facility, it would need to acquire the existing three-building, special-use facility on the 20-acre tract at 2101 Shady Oaks Drive, where it told the city it could build a facility to produce pharmaceuticals for radioligand therapy, or cancer treatment targeting prostate and advanced gastroenteropancreatic cancer.
To ready the real estate, officials said the facility would need to undergo "significant rehabilitation" such as environmental remediation and renovations to the existing space.
Recently, Novartis, with a U.S. headquarters in New Jersey, unveiled plans to develop a new hub in North Carolina, as reported by CoStar News.