Texas Seals Eli Lilly Deal as $6.5B Plant Lands in Houston

Texas put its signature on one of its biggest economic development wins yet under a new incentive regime, officially clearing the way for Eli Lilly’s $6.5 billion manufacturing plant in northeast Houston.

The final Jobs, Energy, Technology and Innovation Act tax agreement that lured the pharmaceutical giant to Houston was posted to the state comptroller’s website this week, the Houston Business Journal reported. The deal caps a fast-moving courtship that began less than a year ago, when Eli Lilly first applied for the incentive program and publicly disclosed its interest in the region.

The global drugmaker plans to build the massive facility on 236 acres within McCord Development’s Generation Park, a 4,300-acre master-planned industrial park off Beltway 8 near George Bush Intercontinental Airport and the Port of Houston. The plant will manufacture active pharmaceutical ingredients, including orforglipron, Lilly’s closely watched oral GLP-1 drug aimed at treating obesity.

The agreement offers a clearer look at the economics behind the splashy announcement.

Lilly committed to paying an average annual wage of $102,503, exceeding 110 percent of the benchmark for its NAICS pharmaceutical manufacturing category. The company said the plant will ultimately create more than 600 high-paying jobs, with an initial requirement of 75 jobs and $200 million in investment by the first year of the incentive period. The project will create 4,000 construction jobs for the duration of its buildout.

McCord Development will invest $100 million in infrastructure upgrades, while Lilly will handle the buildings, as previously reported by The Real Deal.

To secure the deal, Sheldon Independent School District agreed to exempt the property from school taxes through 2030, then cap the taxable value at 50 percent for another decade. The district’s board signed off in November, and Gov. Greg Abbott’s office added its signature on Jan. 5, finalizing the agreement after a joint announcement with Lilly last fall.

The timing of construction remains murky. While the incentive paperwork lists a Sept. 1, 2025 construction start date, no visible signs of work existed following Abbott’s Sept. 23 announcement. Eli Lilly told the outlet this week that it does not have an update on the timeline.

The project is part of Eli Lilly’s broader push to onshore U.S. manufacturing. CEO David Ricks has pointed to permanently lowered federal corporate tax rates as a tailwind for “intellectual property-driven” businesses, though he has downplayed the role of state incentives alone. Houston beat out a “very competitive” runner-up, he said, thanks to workforce quality, available space and a collaborative local government culture.

Those factors are baked into Generation Park’s pitch. The development is home to San Jacinto College’s Center for Biotechnology, creating a direct training pipeline for pharmaceutical manufacturing jobs, with Sheldon ISD already feeding students into the program.

While Houston lacks a deep biotech labor pool, the city has become home to an adjacent life sciences sector, with more than 700 life science companies making Houston home.

— Eric Weilbacher