Estée Lauder considers locating $14.5 million engineering center on LI

Estée Lauder is weighing whether to open a multimillion-dollar engineering center in Melville or in another state, executives said Thursday.

The cosmetics giant is proposing to rent a 51,580-square-foot building at 65 Maxess Rd., adjacent to its manufacturing and research campus at the corner of Pinelawn Road and the South Service Road of the Long Island Expressway. The company is one of Suffolk County’s largest employers, with a payroll of 2,502 people.

The county made a bid Thursday for the $14.5 million engineering center, granting $895,000 in tax breaks over 10 years to The Estée Lauder Companies via the Suffolk County Industrial Development Agency.

Company executives told the IDA they also have received incentive offers from Pennsylvania and New Jersey.

They said there are no plans to shut down the Melville factory and research laboratory but their future growth will be assured if the engineering center is next door.

"We enjoy a 50-year relationship in Melville, so it's very important to continue that," said Henry Goodfriend, who oversees real estate transactions for Estée Lauder.

Rob Peterson, senior vice president for research and development, added that the proposed "engineering technical center" will develop new equipment and processes aimed at improving production of cosmetics, fragrances and skin care products.

To open the center the company would renovate and equip the vacant warehouse. 

"Creation of the center will make ELC’s factory in Melville viable long-term with new advanced manufacturing techniques and workers,” he said.

Among the company’s global network of more than 20 plants, labs and warehouses, Melville turns out the most skin care products and the second most fragrances. The items are sold under the Estée Lauder, Clinique, GlamGlow, Tom Ford Beauty and Crème De La Mer brands, among others, according to the company.

Peterson said Estée Lauder is also seeking reductions in its electric bills from utilities and tax breaks from Empire State Development, the state’s primary business-aid agency, for the proposed engineering center.

State officials "are working closely with Estée Lauder in an effort to bring this exciting project to Long Island," ESD spokewoman Amy Varghese said Thursday.

The building that would house the engineering center was once used by the U.S. Postal Service.

The project would add 31 jobs to Estée Lauder’s local payroll, paying, on average, $165,650, per year, according to IDA records. Another 35 current employees also would work at the center. 

Estée Lauder’s request for tax breaks comes three months after Leonard A. Lauder, son of company founders Estée and Joseph Lauder, said he wants to boost production of skin care products and fragrances at the Melville factory by 50 percent over the next few years. The local plant makes 17 million units per month, Lauder said in an interview.

Estée Lauder Companies, begun in 1946, is a public company traded on the New York Stock Exchange. It reported a profit of $1.1 billion for the year ended June 30 on sales of $13.7 billion.

The company's strong financial performance and first request for tax breaks from Suffolk County were questioned by Legis. Robert Trotta (R-Fort Salonga), a frequent IDA critic who attended Thursday's meeting.

"They made more than  $1 billion last year, and the county is struggling for money. I'm a little disappointed that they are asking for help," he said.

IDA chairman Theresa Ward called Estée Lauder's proposed engineering center "a really exciting project" that merits county assistance. "This type of project is exactly what IDAs are made for," she said.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.