JOHNSON CITY, Tenn. (WJHL) — A Johnson City skincare company is filling an empty building this week — and making room for expansion. A tax incentive and a grant from Johnson City are helping Crown Laboratories make that happen.
Crown will move 60 office jobs from its south Johnson City manufacturing plant into the former NN headquarters on Mockingbird Lane now that a lease is complete, CEO Jeff Bedard said from his soon-to-be-former office on Lafe Cox Drive. The company, known for producing Blue Lizard Sunscreen, recently went to three shifts at Lafe Cox and opened a new line but needed more room as it’s been growing via acquisitions.
“We’ll start immediately on work here to expand production as we vacate office space,” Bedard said. Eventually he expects up to 200 corporate jobs at the new location as well as more than 100 new jobs on the manufacturing side.
That job growth is linked to one of Crown’s incentives, a “payment in lieu of tax” (PILOT) agreement. Crown must create 216 new jobs — from a baseline of 175 — to qualify for the full property tax break from 2025 to 2029. Crown’s property taxes for the corporate building will be waived through 2024 without job requirements.
At current tax rates, the PILOT incentive on the 68,000-square-foot building is worth about $113,000 annually. It’s structured through the Industrial Development Board owning the building and leasing it back to Crown until 2029 — though Crown is paying NN for the building’s value.
NN Inc. also had a PILOT on the Mockingbird Lane building. The company ended up relocating its corporate headquarters to Charlotte, N.C. and is having to pay property taxes for this year because it didn’t meet targets.
Bedard said he understands taxpayers’ skepticism about such deals.
“Giving benefits to what they view as a corporate entity is difficult for some to grasp, and I get that,” he said. Be that as it may, Bedard said, the economic environment is very competitive and multiple companies are looking to relocate or expand.
“It’s paramount that these partnerships are created and it’s a private-public opportunity, because without that you’re not going to win the recruitment battle and you’re not going to win the retention battle,” Bedard said.
“We were being heavily recruited by two areas where we had small footprints, one in New York and one in Dallas, Texas, and the reality is the corporate office could have been located anywhere.”
Crown plans to invest $27 million between its purchase of the corporate headquarters and its plant expansions. Bedard said that’s a reflection of his commitment to Johnson City. He’s called the area home for nearly two decades and seen Crown grow from just four employees to its current size.
“To have that partnership and have the community be willing to step up and support our growth is really important and feels great,” he said.
Even with such a competitive environment, Bedard said incentives shouldn’t be offered unless they represent a win for the community and include accountability measures such as those Crown will have to meet.
“I don’t think communities or governments should give handouts. There should be accountability and responsibility with the taxpayers’ money. We’re going to do everything in our power to achieve those PILOT goals and I feel very confident we will.”