City Promises Funds to Help Lure Companies to North Texas Life Science Hub
According to Candace Carlisle at CoStar News, "The city of Plano, Texas, has approved a development agreement with NexPoint to redevelop an aging office campus once housing the headquarters of Electronic Data Systems in Legacy Business Park into what is expected to be a major $4 billion life science hub.
The city approved a public-private partnership offering reimbursement to the Dallas-based developer through a newly created tax increment reinvestment zone containing the 91-acre Texas Research Quarter and other properties in Legacy Business Park. The agreement targets the first phase of what is expected to be a multiphase project to redevelop and reposition the property.
NexPoint Managing Director and Head of Real Estate Development Eric Danielson said the company is committed to collaborating with the city to build "a dynamic ecosystem that will drive innovation, attract and grow top-tier talent, support groundbreaking research, and accelerate the production and delivery of important treatments to patients in Texas and beyond."
The city of Plano is expected to contribute 65% of appraised value gains to the new tax increment reinvestment zone with an additional 50% contribution from Collin County and 30% from the Plano Independent School District, according to city documents. The total cost of the project, including public improvement costs and administrative costs, is $577.9 million. NexPoint is currently pursuing related agreements with these taxing entities, the firm said, with a broader public-private partnership expected to be completed by year's end.
The tax increment financing zone is expected to operate for 25 years through Dec. 31, 2049, with a final payment expected Jan. 31, 2050.
The 3 million-square-foot life science hub is expected to include research and development facilities and production facilities that manufacture pharmaceutical or cellular products to cater to the needs of life sciences companies. Off-site parcels from the campus are expected to house subsequent phases or built-to-suit projects seeking to locate near the campus.
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The Texas Research Quarter is expected to cater to early-stage research companies to commercial manufacturers, along with the ability to leverage academic partnerships and workforce development and training, the developer said.
The deal is expected to help Plano further solidify the region's budding reputation of being a so-called "Third Coast" for biotechnology research and manufacturing, with this life science hub expected to emerge as a "pivotal center," said Doug McDonald, Plano's director of economic development, in a statement.
The newly approved development agreement demonstrates the city's commitment and readiness with incentives to recruit global pharmaceutical companies, he added. He declined to share additional details on what companies the city could be targeting to become part of this new life science hub."
The redevelopment of the aging office campus in Plano, Texas, into a major life science hub could have significant implications for property taxes in the area. The $4 billion project, backed by a public-private partnership between NexPoint and the City of Plano, aims to transform the old headquarters of Electronic Data Systems in Legacy Business Park into a 3 million-square-foot life science hub.
The creation of a tax increment reinvestment zone (TIRZ) for the project means that property taxes generated from the increased appraised value within this zone will largely be reinvested into the area. Specifically, Plano is expected to contribute 65% of the appraised value gains, with additional contributions from Collin County (50%) and the Plano Independent School District (30%). This reinvestment could lead to a temporary reduction in the availability of these tax revenues for other uses, as funds will be directed toward the redevelopment costs and infrastructure improvements associated with the project.
However, over the long term, the increase in property values due to the redevelopment could lead to higher property tax revenues overall. The transformation of the site into a life science hub is likely to attract high-value businesses and skilled workers to the area, potentially driving up demand for nearby properties and thus their assessed values.
Additionally, the successful completion of this project could enhance Plano's reputation as a hub for biotechnology research and manufacturing, which might further stimulate economic growth and development in the region. This could lead to more commercial and residential development, contributing to an expanded tax base.
In summary, while the initial impact of the project might involve a redirection of some property tax revenues into the development itself, the long-term effects could result in higher property values and, consequently, increased property tax revenues for the city and surrounding taxing entities.