DALLAS — The Plano, Texas City Council approved the largest incentive package in the city's history for the North American headquarters of Toyota Motor Co.
The package, approved May 12, includes a 10-year, 50% tax abatement on $350 million of real and business personal property and a $6.75 million cash grant for the relocation of about 4,000 employees from Torrance, Calif., Erlanger, Ky., and New York.
The local incentives are added to the $40 million the company has already been awarded through the Texas Enterprise Fund, part of Texas Gov. Rick Perry's efforts to recruit business to the state.
Employees would not arrive until the new headquarters is completed in late 2016 or early 2017, the company said.?Toyota has not named a developer or architect for the project.
The new headquarters will consolidate three existing headquarters for manufacturing, sales and marketing, and corporate operations, according to Toyota. About 2,000 employees at Toyota Motor Sales, U.S.A. in Torrance will be affected, along with 1,000 at Toyota Motor Engineering & Manufacturing in Erlanger, Ky., and some employees in New York.
Plano, a suburb north of Dallas, has experienced explosive growth in the past 20 years.
The city carries triple-A ratings on its general obligation debt from all three ratings agencies.
"We expect medium term economic stability from Plano, with continued moderate growth in the near-term given ongoing commercial developments," Moody's analysts said in an April report preceding a $28 million bond sale.
As the largest city in triple-A-rated Collin County and the ninth largest city in Texas, Plano is a hub for several corporate headquarters, including JCPenney, Ericsson North America, and Electronic Data Systems.
The affluent city's per capita income is about 160% of the U.S. average, Moody's said.
After experiencing two years of modest declines driven by the recession, the city's assessed values have increased for the last three years to $26.9 billion for fiscal 2014. Officials are expecting cumulative growth of over 12% through the next two years.
Plano's Legacy West development, which will serve as Toyota's headquarters site could be valued at up to $2 billion and will include a tower hotel, office and retail space, and some multi-family units, according to Moody's.
"While a more significant amount of commercially-zoned property is available, only 8% of developable residential lots remain," Moody's noted.
