New business development on Legacy Dr. creates ripple effect
Dirt is turning on the northwest corner of Headquarters and Legacy drives where signs boast the future homes of Toyota Motor Corporation's North American headquarters and FedEx Office and Print Services.
By 2017, both companies combined are expected to bring more than 4,000 jobs to the city, and Toyota alone is expected to bring $7.2 billion to the area over a 10-year period, said Sally Bane, Plano economic development director. Toyota will anchor Fehmi Karahan's 240-acre Legacy West development on the west side of Dallas North Tollway, which is located in the heart of Legacy Office Park. The mixed-use development surrounds the J.C. Penney Co. headquarters and is planned to be a hub like its counterpart across the Dallas North Tollway, Legacy Town Center. The initial phase of construction for the multipark development will include 280,000 square feet of retail, 600 multifamily units, 150 condominiums, 100 townhomes, about 5 million square feet of office space and a hotel, Karahan said.
"The city is changing. It's evolving," Mayor Harry LaRosiliere said. "The people who have been here still feel comfortable, but there's space and places for new people."
The lure to Legacy
Toyota has staked its flag for 70 acres on the northwest corner of Legacy and Headquarters drives for its new office that will consolidate the Japanese automaker's U.S. operations in California, Kentucky and New York.
FedEx Office has already broken ground on its 20-acre-campus across the street from Toyota, developer Karahan said. The space will be the new corporate hub for the Dallas-based company that has offices at the Galleria in Dallas and in Plano.
The success of landing the two companies came from the work of Plano's economic development team which has an ongoing marketing effort to attract companies looking to relocate, Bane said.
In October 2006, the city approved a property tax increase of 2 cents per $100 valuation to be dedicated to an economic development incentive fund that has been used to bring more than 100 companies to Plano since the fund was created, Bane said. In the approved fiscal year 2015 budget, the incentive fund totals $5.8 million
The incentive agreement issued for Toyota was $6.75 million, and the package for FedEx Office was recorded at $1.67 million, according to city records. The city also offered a 50 percent tax rebate on the real and personal property taxes for each company over a 10-year period. The rebate will affect Toyota's amount of $350 million in taxes, and $45 million for FedEx Office.
To reciprocate, city records show that Toyota agreed to occupy at least 1 million square feet of office space and transfer or create up to 3,650 full-time jobs before Dec. 31, 2018. FedEx Office agreed to lease and occupy at least 255,000 square feet and retain, transfer or create up to 1,224 jobs before Dec. 31, 2016.
New energy
LaRosiliere said the city's growth will reach further than the new plots on Legacy.
"In terms of what Toyota has meant to the city, this announcement has really created a higher sense of energy, and it has emphasized the fact that Plano is going through a renaissance," he said. "There's a multiplier effect where not only do you have Toyota [coming], but businesses who support Toyota will be moving to the area as well."
Jamee Jolley, CEO of Plano Chamber of Commerce, said a number of small businesses are choosing Plano on a daily basis.
"We have companies every day with 20 jobs or 50 jobs that are coming here that don't really hit anybody's radar," Jolley said. "Not only are they relocating, but they're also bringing opportunities for local individuals to be employed here."
In 2011, Golden Living, a senior health care company that operates in 21 states, chose Plano to centralize its corporate headquarters, relocating several of their employees as well as hiring about 50 people from the city's workforce, said Kelli Luneborg, director of public relations for Golden Living. She said the company liked Plano's central location and talent.
"I think small businesses turn into big businesses. When you have a combination of a talented workforce and are located in a desirable place of the country where growth is taking place, it allows you to grow more efficiently," Luneborg said.
Officials from Ericsson Inc., an international communications technology and services provider, initially came to Plano in 2001 and then expanded in 2012 to consolidate all of its North American corporate services, which includes 2,650 employees.
"We continue to see growth [in Plano], and it feels like it's as strong as it's ever been, especially in the Legacy Corridor," said Vickie Bunch, head of real estate for Ericsson in the Americas.
Reaping the benefits
Bane said Plano has an advantageous split in its revenue stream where 50 percent is from the commercial sector and 50 percent from residential, which has allowed the city to have the lowest effective tax rate in the Metroplex. She said the success of the commercial sector helps fund the expenses of delivering services to Plano citizens.
"Even if a citizen is untouched by the impact of a company, [he or she] still benefits from the improvement made to the tax base in Plano because that revenue helps support everything [he or she] gets to enjoy in this community at a really low cost," she said.
Because of the difference in cost of living, Karahan said employees making the switch from California to Plano will have approximately 30 percent disposable income, which could be used to pour into local businesses.
"When you have that caliber of relocation, the impact is huge," Karahan said.
