“Placing a crown on top of this building is just perfect,” she told a crowd of local economic development officials, government leaders and members of the local legislative delegation during a ribbon cutting Monday afternoon on the building’s front steps.
“We’re pleased to be of assistance to your board as it positions Crown for the future,” she said. “With that comes employment opportunities for our citizens as you expand your portfolio.”
Crown Laboratories, a local skin care company perhaps best known for making Blue Lizard Sunscreen, has occupied its new corporate headquarters at 207 Mockingbird Lane for a few weeks now. The building used to serve as home for NN Inc., a global manufacturer that failed to meet job creation goals in a payment in lieu of taxes agreement with the city.
“It does take a village to raise a family, and it takes a village to raise a company,” Crown Labs President and CEO Jeff Bedard told attendees, pointing out contributions from members of Washington County government, local educators, state elected officials and Johnson City leaders.
Bedard moved his company from San Diego to Johnson City in 2000 and decided to set down roots in the region. He said the Northeast Tennessee and Southwest Virginia area has a lot to offer.
“The more we work together as a region, the more we communicate out with the Appalachian Highland effort, we can do great things here,” Bedard said, “and Crown is a perfect example of that.”
The company is planning a $27 million investment in its local operations and is receiving an incentive package from Johnson City to spur the creation of 216 new, local jobs, which the company anticipates will pay an average hourly wage of $27.17. This would be in addition to the roughly 175 people currently employed by the company in Johnson City.
Bedard said the company will place roughly 60 to 80 of those new jobs at the company’s new corporate headquarters. Crown will put the rest at the company’s existing manufacturing center at 349 Lafe Cox Drive.
The city’s incentive package includes a $450,000 grant that will reimburse the company for acquiring and renovating the building at Mockingbird Lane and a payment in lieu of taxes agreement, or PILOT, that will allow the business to avoid paying property taxes on the building through Dec. 31, 2029. According to the Northeast Tennessee Regional Economic Partnership, the PILOT incentive is worth about $113,000 annually.
“This is a crowning achievement,” Bob Rolfe, commissioner of the Tennessee Department of Economic & Community Development, told attendees.
He said the state can create incentives for job creation, but at the end of the day, it’s the leaders of companies who ultimately make the decision to expand. He commended the company for investing in “advanced manufacturing.”
“The kinds of jobs that you have created and the jobs that you will create, Jeff, those are truly great family-wage jobs,” he said.
Rolfe said the state will also be providing an incentive to Crown Labs. The department’s grant funding, he said, is based on the number of jobs being created, the amount of capital invested, the quality of the wages and the location of the project. Rolfe said the state has determined the dollar value of the grant it will be offering to Crown Labs, but is still completing the paperwork for the incentive and will release the figure in the next 30 days.
Johnson City’s industrial development board is leasing the Mockingbird Lane space to Crown Labs, which will pay $1 per year. A general partnership affiliated with Crown Labs, called Crown Properties, will be the official lessee under the PILOT.
Although Crown Labs won’t be required to meet specific benchmarks as a condition of their agreement until the end of the PILOT’s fifth year, the PILOT agreement does list a set of job and hourly wage projections starting in tax year 2020 through tax year 2024.
Crown Labs has projected it will have 29 additional full-time employees with an hourly wage of $33.39 in 2020, 108 full-time employees at $28.14 per hour in 2021, 158 full-time employees at $26.81 per hour in 2022 and 192 full-time employees at $26.75 per hour in 2023.
Crown Labs will have to maintain its goal of 216 new full-time jobs paying an average hourly wage of $27.17 starting in tax year 2025 and lasting for the remaining term of the agreement. If it falls below that figure, the company will have to pay back a portion of the incentives.