Eli Lilly receives taxpayer funds to expand manufacturing in Texas

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(The Center Square) – Another multi-billion-dollar company is expanding operations in Texas after receiving millions of dollars through a new taxpayer funded grant that allows for a freeze on school district property tax increases for 10 years under a new law. 

Pharmaceutical giant Eli Lilly and Company announced it is constructing a roughly one-million-square-foot active pharmaceutical ingredient (API) manufacturing facility in north Houston in Harris County to produce next-generation small molecule synthetic medicines. 

Lilly says it’s investing more than $6.5 billion in the project, which makes it the largest investment in API manufacturing in Texas history. 

“Our new U.S. manufacturing facilities are more than just an investment in infrastructure – they're a commitment to American innovation, onshoring jobs, economic growth, and public health,” Lilly Chair and CEO David Ricks said in a statement. “By expanding our domestic footprint, we’re strengthening our supply chain, reducing reliance on overseas production, and accelerating the delivery of life-changing medicines to patients. This is a win for Lilly, a win for American workers, and most importantly, a win for the communities and patients we serve.”

"Texas is the best state in America for doing business," Gov. Greg Abbott said. Lilly’s decision “will boost pharmaceutical manufacturing in the state of Texas and ensure that we do not rely on other countries for the manufacturing and supply of medicines and medical supplies. Texas is doing its part to bring manufacturing capacity back to America and expanding biomedical manufacturing right here in our great state."  

The facility is being built at Generation Park, a 4,300-acre master planned commercial district, which houses campuses for San Jacinto College and Lone Star College built by the McCord real estate company. Lilly’s new facility “is the first of its kind in Texas,” McCord said.

The announcement “reflects years of strategic work by McCord and regional partners across the public and private sectors to develop the talent, infrastructure, and business environment needed to attract world-class companies like Lilly,” McCord said. “As a result, Generation Park and Houston have emerged as premier destinations for innovation, advanced manufacturing, and biomedical excellence.”

The project is expected to create 600 high-wage jobs, including engineers, scientists, operations personnel and lab technicians. An additional 4,000 construction jobs are expected to support the facility’s development. The project presents “employment opportunities and access to specialized training programs designed to prepare talent for careers in the life sciences industry,” McCord said. 

Lilly received a $5.5 million Texas Enterprise Grant for the project through the Texas Jobs, Energy, Technology, and Innovation (JETI) program. The Texas legislature created the JETI program when it passed HB 5, which Abbott signed into law in 2023. It provides tax incentives for major industries to “attract large, capital-intensive economic development projects that bring new capital investment and create new, good-paying jobs in Texas communities while ensuring robust reporting and transparency,” according to the governor’s office.

The JETI program is a “new, transparent economic development incentive tool to help our communities continue to attract transformational capital investments that will create good-paying jobs for generations to come,” Abbott said.

The JETI Act authorizes a company, school district and the governor’s office to enter into an agreement “for a 10-year school district maintenance and operations (M&O) tax appraised value limitation of 50%, based on qualifying job and capital investment minimums. Projects located in qualified Opportunity Zones are eligible for an additional 25% limitation on taxable value,” the governor’s office said.

Generation Park is located in the Sheldon Independent School District in north Houston. The overwhelming majority of the district’s 11,000 students are economically disadvantaged and minorities. 

The majority, 66%, are Hispanic; 27% are Black; 86.5% are economically disadvantaged; 69% are considered “at risk,” according to Texas Education Agency data. About 35% are bilingual where English isn’t the primary language spoken in the home.

Despite the prospect of Sheldon ISD receiving reduced property taxes for 10 years, its superintendent, Dr. Demetrius McCall, praised the “partnership,” saying it “represents a shared commitment to innovation, education, and opportunity. Together, we will empower our students with the skills and experiences they need to thrive in a global workforce.”