Avon Products Inc. plans a $17.7 million renovations project at its Rye facility, a distribution center that has evolved into an information technology hub for the global women”™s beauty and fashion company headquartered in Manhattan.
The two-year project will not immediately increase employment numbers at the 601 Midland Ave. facility, but will keep 510 jobs and Avon”™s $57.3-million annual payroll in Westchester County. Avon also has nearly 160 contract workers and on-site consultants in Rye with an annual payroll of $15.2 million.
Avon officials have said the renovations will give the company the flexibility to increase future employment in Rye.
The company did not say when renovations would begin, though the project already has cleared the state environmental quality review process with the city of Rye.
The project should give a temporary boost to Rye”™s commercial office market. The company plans to lease 45,000 square feet of short-term space in the area to accommodate part of its workforce during renovations. Avon estimated its swing-space leasing cost at $2.3 million.
The Westchester County Industrial Development Agency board recently agreed to amend and extend its 15-year-old commercial lease agreement with Avon to provide financial incentives for the project. The IDA approved sales tax exemptions for Avon”™s construction and furnishings, equipment and software purchase and licensing costs estimated at $3.8 million over the 15-year term of the agreement. The county IDA will continue to hold title to the Midland Avenue property and the company will lease the facility and pay the equivalent of full property taxes.
Avon officials in their IDA application said its existing sales tax exemption has enabled the company to invest in and establish the Rye facility as a major IT center in a county with high sales tax rates. Without a continued sales-tax reprieve, the company would have to relocate its IT operations outside New York.
Avon estimated its annual capital investment in Rye, which includes hardware and software purchases and licensing for IT operations, will amount to approximately $44.9 million over the next 15 years.
Avon reported $10.9 billion in total revenue in 2010, up from $10.2 billion in 2009. Its largest global market is Latin America, with a 42-percent share, or $4.6 billion, of its total revenue last year.
