Texas has finalized an agreement that will bring Eli Lilly’s $6.5 billion manufacturing plant to northeast Houston, marking one of the state’s largest economic development projects under a new incentive program.
The deal was made official with the posting of the final Jobs, Energy, Technology and Innovation Act tax agreement on the Texas comptroller’s website this week, according to the Houston Business Journal. This follows less than a year after Eli Lilly first applied for incentives and announced its interest in building in Houston.
Eli Lilly plans to build its new facility on 236 acres within McCord Development’s Generation Park, a large industrial park near George Bush Intercontinental Airport and the Port of Houston. The plant will focus on producing active pharmaceutical ingredients, including orforglipron, which is being developed as an oral treatment for obesity.
According to the terms of the agreement, Eli Lilly will pay an average annual wage of $102,503 at the plant—more than 110 percent above industry benchmarks for pharmaceutical manufacturing jobs. The company expects to create over 600 permanent positions at full capacity. There is an initial requirement for 75 jobs and $200 million in investment during the first year of incentives. Construction of the facility is projected to generate 4,000 temporary jobs.
McCord Development will contribute $100 million toward infrastructure improvements at Generation Park while Eli Lilly will be responsible for constructing and equipping the buildings.
To help secure the project, Sheldon Independent School District agreed to exempt property taxes on the site through 2030. Afterward, taxable value will be capped at half for another ten years. The district board approved these terms in November, followed by Governor Greg Abbott’s signature on January 5 after a joint announcement with Eli Lilly last fall.
The construction timeline remains uncertain. Although paperwork indicates work could start as soon as September 1, 2025, no physical construction has begun since Governor Abbott’s announcement in late September. An Eli Lilly spokesperson said there are currently no updates regarding when building will begin.
This investment is part of Eli Lilly’s strategy to expand U.S.-based manufacturing operations. CEO David Ricks noted that “permanently lowered federal corporate tax rates” have benefited intellectual property-driven companies but suggested state incentives were not the only factor in choosing Houston over other locations. He stated that workforce quality, available land, and support from local government played important roles: “Houston beat out a ‘very competitive’ runner-up… thanks to workforce quality, available space and a collaborative local government culture.”
Generation Park highlights its connection with San Jacinto College’s Center for Biotechnology as an advantage; this provides specialized training for future workers at facilities like Eli Lilly’s plant and draws students from Sheldon ISD into biotech career paths.
While Houston does not have a deep pool of biotech workers compared with some cities, it has become home to more than 700 life sciences companies across related fields.
