Less than a week after saving around $4.5 million on future property taxes, Finisar Corp. got approved for a $1 million incentive on its investment at its new Sherman facility.

The Sherman Economic Development Corp. board of directors approved the $1 million incentive for Finisar during a special meeting Friday. SEDCO will provide Finisar four payments of $250,000 each over a two year period as the electronic components manufacturer invests $160 million in capital equipment and construction in its Sherman facility in the former MEMC building.

“The incentive itself is (for) capital investment, but they’re obviously going to be hiring 500 jobs or more initially,” SEDCO Executive Vice President Frank Gadek said, explaining why the grant funds aren’t tied to Finisar’s hiring plans. “There’s a schedule — some milestone dates that they have to meet. We do everything performance based, so there’s some requirements that have to be met before they can apply (the incentive grants).”

The incentive agreement states the first $250,000 payment will be made after Finisar provides documentation of a local investment of at least $40 million. The three other payments will come when the company’s investment reaches $80 million, $120 million and $160 million, though each payment will also be at least six months apart.

“They provide us with the documentation and we inspect and cut them a check,” Gadek said of the process.

On Monday, the Sherman City Council unanimously approved a 10-year tax abatement and a five-year Chapter 380 tax rebate agreement for Finisar. City staff estimated the tax abatement agreement would save the company around $3.3 million in property taxes, and the tax rebate agreement would save it around $1.2 million.

Finisar announced in December that it would begin producing vertical-cavity surface-emitting lasers for Apple at its new Sherman facility later this year. VCSELs are small semiconductor devices that emit light vertically and measure the depth at which that light is reflected. That depth-sensing technology helps power Apple product features such as Face ID, Animoji, portrait mode selfies and proximity-sensing capabilities.

The 10-year tax abatement agreement will give Finisar a 60 percent tax abatement for each of the first three years, a 55 percent abatement for each of the following three years and a 50 percent abatement for the final four years of the agreement. The five-year tax rebate agreement will see the city giving a grant back to Finisar after its full tax bill is paid in years 11 through 15. The grants will be for 45 percent of the taxes paid in each of the first two years of the agreement, 40 percent for the third and fourth years and 35 percent for the final year.

City Manager Robby Hefton explained SEDCO’s incentives are usually used to attract a company to the area, but the 15-year incentives from the city give Finisar a reason to stay in Sherman.

“The idea here is that if in years seven, eight, (or) 10, they’re on the bubble about things, having this economic incentive would help keep them here and have those people employed and then continue to invest here while they have this incentive in place,” Hefton said.

Finisar’s work at its new local facility is slated to include investments of between $20 million and $30 million in the building and land, and an additional $120 million in manufacturing equipment. The company began remodeling work on the building late last year and expects to have the facility operational for the third quarter of 2018. The company announced it was creating 500 new jobs in Sherman, but its tax abatement application showed it expected 587 employees once the facility is operational.

SEDCO also recently announced that Finisar’s purchase of the former MEMC building on Sherman’s south side was selected as a finalist for the Dallas Business Journal’s Best Real Estate Deals of 2017. The project is one of three finalists in the “Rehab or Reuse” category and one of 52 projects up for the “Deal of the Year” award. The winners will be announced on April 11.