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VOL. 35 | NO. 7 | Friday, February 18, 2011

Job Wars

Asurion deal marks shift in how Midstate, Metro compete for businesses

By Bill Lewis

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It’s on. The competition between Nashville and its suburban counties for jobs and business investment came out of the closet this month when Mayor Karl Dean promised Asurion Corp. $2.4 million in return for keeping its headquarters in the city and hiring 600 new workers.

Metro Councilman Michael Craddock questioned what the city would get for its money, since there were no assurances the company would hire Davidson County residents. But there was no doubt that the city was willing to fight for those jobs.

Alexia Poe, Dean’s director of economic and community development, told Council members the money would keep “good, well-paying jobs” inside the city. The company, she says, has told her 55 percent of its employees live in Nashville.

To some observers, the Asurion deal is an abrupt about-face from the city’s strategy over the past decade or more.

For years, Nashville officials promoted regionalism, the idea that business investment and job creation in Williamson, Rutherford or other Middle Tennessee counties benefitted Nashville just as much as if those investments and jobs were inside Davidson County.

Economic development officials declared it a victory for Nashville when Nissan moved its North American headquarters from California to Cool Springs after a brief layover in downtown’s BellSouth Building (now AT&T). When Healthways, which was formerly located in Nashville, Mars Petcare, Community Health Systems and other companies built new headquarters facilities in Franklin, the Nashville Chamber of Commerce’s website declared the “Nashville economic outlook remains strong.”

Williamson County and Franklin officials acknowledge some companies received financial incentives for locating there. Jackson National Life Insurance Co., for example, benefitted from local and state financial incentives last year when it agreed to bring 750 jobs to its new regional headquarters in Cool Springs.

Nashville, on the other hand, had not used major grants or tax incentives to attract a company since the so-called Dell Deal in 1999, which included tax rebates and free land. That changed when Dean announced the $2.4 million to keep Asurion inside Davidson County. The state pledged another $10 million in return for guarantees the company would remain in Tennessee.

There was a risk that Asurion would move its headquarters not just out of Nashville but out of Tennessee, says Janet Miller, chief economic development and marketing officer for the Nashville Area Chamber of Commerce. The company has operations across the United States and around the world.

“We could stand to lose the whole headquarters,” Miller says. “We need to keep our marquee companies. This is one of our fastest-growing companies, probably in the state.”

As for regionalism, she says, that’s exactly how businesses view the Middle Tennessee economy.

“This is a regional economy. The county line means nothing to a business. They are attracted to this economic engine,” Miller says.

The region’s counties do compete, but with a “rising tide raises all boats attitude,” she adds.

Asurion, which insures and repairs cell phones, moved from California in 2003. The company, which employs 1,200 in Nashville and is adding 600 new jobs, is worth fighting for, says Councilman-at-large Charlie Tygard. The city is giving the company $500 for each new job and $2.1 million over three years for training and other expenses.

“We went too long … and saw every bit of business drift across county lines to Williamson County,” he says. “We are competing with Williamson County.”

Asurion buys good and services in Nashville and pays city property, sales and other taxes, as do its employees. Even those who live in other counties have an economic impact when they go to lunch or shop at retailers near the company’s headquarters at Grassmere Business Park, Tygard says.

“Business drives business,” he says.

Craddock, on the other hand, says it’s uncertain what Nashville’s taxpayers will get in return for their $2.4 million. And he’s concerned that there are no guarantees the company will hire Nashvillians who are looking for work during the recession. He suspects fewer than half of its current employees live in Nashville.

Craddock supports job creation inside the city instead of standing by while employers move to Williamson County. But he says city officials should not casually hand over cash.

“If you’re for regionalism, you don’t care if a company goes to Williamson County. But we care,” Craddock says. “But the people in Nashville have to fund the police department and schools.”

Citing the city’s tight budget, he’s asking: “Where did we get this money?”

The debate shouldn’t just be about whether regionalism benefits Nashville, Councilwoman Emily Evans says. She sees evidence every day that job creation in Williamson County has a positive impact on the city.

“I have three Nissan families in my neighborhood. They’re paying property taxes, shopping in stores,” Evans says.

There’s a more important question.

“What’s not being asked is why would they (Asurion) leave Davidson County in the first place?” says Evans. “Why do we need to pay them to stay?”

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