At its next meeting, the Dallas County Commissioners Court will consider a tax abatement request for a high-tech automated distribution center project by Frito-Lay.
Supported by a Dallas County tax abatement and possible City of Dallas economic development incentives, the company will upgrade an existing 120,000-square-foot distribution facility with both physical improvements and new state-of-the-art supply chain and logistics equipment.
The projected investment will increase the site’s assessed valuation by $45 million from its current figure of $19 million, and full-time employment will also increase by 80, adding to the existing 150 jobs at the facility.
Due to the high-tech nature of the facility and the specialized skills that will be needed, the average salary of these employees will be $48,000, which is substantially higher than the $30,000 that many distribution center employees typically receive.
The upgraded facility will help support a manufacturing operation that Frito-Lay has in Irving, TX and will also handle inventory currently stored in Oklahoma and Fort Worth.
Frito-Lay is the convenient foods division of Pepsico, which is one of the largest employers in the Dallas area with approximately 1,000 employees. The upgraded distribution center in Dallas will only be the seventh such highly-automated facility that Pepsico has created nationally, and it will be the largest that it has yet built so far. Pepsico/Frito-Lay selected Dallas for this project over a number of other sites outside the state.
In order to secure the project, the County is proposing a ten-year, 60 percent abatement on business personal property. This would result in the County annually foregoing about $67,100 in business personal property tax revenue that does not presently exist. Even after factoring in the abatement, the county will still receive about $42,300 in new revenue.
Under the County’s tax abatement policy, expansion projects are eligible for consideration if they, within three years, can increase the County’s tax base by at least $2.5 million and create at least 50 new full-time jobs. As the Frito-Lay project is expected to create at least 80 new full-time equivalent (FTE) jobs and increase the County’s tax base by $45 million, it is easily eligible for consideration.
Frito-Lay Inc. was formed in 1961 through the merger of The Frito Company and the H.W. Lay & Company. In 1965, PepsiCo acquired Frito-Lay, and it is now a wholly owned subsidiary of PepsiCo, with its headquarters located in Purchase, NY. In fact, Frito-Lay North America is now a $13 billion convenient foods business, making PepisoCo the world’s largest snack food company with a global presence.