incentives

UPDATE: Ford incentive deal, megasite panel approved by General Assembly

The Memphis Regional Megasite.

The nearly $900 million incentive package for Ford to build Blue Oval City on the Memphis Regional Megasite has passed both chambers of the General Assembly.

The Senate voted 27-3 on both the funding measure and a bill creating a new megasite authority. The opponents were Sens. Janice Bowling (R-Tullahoma), Mark Pody (R-Lebanon), and Kerry Roberts (R-Springfield).

The House later voted 90-3 to approve the bill fudning the megasite. Opponents were Reps. Scott Cepicky (R-Culleoka), Terri Lynn Weaver (R-Lancaster), and Tim Rudd (R-Murfreesboro).

The bills are expected to be signed into law quickly by Gov. Bill Lee so work on the megasite can get underway.

Price tag for Ford megasite deal hits $884M

Gov. Bill Lee speaks at Ford’s announcement it will build an electric vehicle and battery plant at the Memphis Regional Megasite on Sept. 28, 2021. (Erik Schelzig, Tennessee Journal)

When lawmakers return into special session next week to take up an incentive package for Ford’s Blue Oval City at the Memphis Regional Megasite, they might be surprised the price tag has now reached $884 million.

Gov. Bill Lee’s administration had already disclosed the $500 million grant it had agreed to provide to Ford and battery maker SK Innovation. But as first unearthed by Chattanooga Times Free Press reporter Andy Sher, the legislation appropriates state funds for three further items.

Here’s the breakdown:

— State grant to Ford Motor Co. or its affiliates: $500 million.

— Road work: $200 million.

— Building, demolition, and related work on site: $138.2 million.

— Construction of Tennessee College of Applied Technology at the site: $40 million.

— Consulting and legal services: $5 million.

— Establishment of a new Megasite Authority of West Tenenssee: $675,000.

Just like any other major investor, Ford and SK Innovation will also qualify for statutory job tax credits worth $4,500 for each new job created. The Haywood County location also qualifies for an enhanced credit of an additional $4,500 for five years. Or the company can choose the “super tax credit,” of between $4,500 and $5,000 per position (depending on wage level) for up to 20 years.

The enhancement and super tax credit can’t be used together, so the Blue Oval City project will have to decide whether to go for the large per-employee credit for a shorter amount of time, or the lesser amount for longer.

The full projected employment level of 5,800 workers times $4,500 is $26 million. At the enhanced level, the total credit would balloon to $52 million against the projects franchise and excise tax obligations.

Sexton threatens abstentions on Ford deal if there is no second session on COVID-19 mandates

Rep. Cameron Sexton (R-Crossville) speaks to colleagues at a House Republican Caucus on July 24, 2019. (Erik Schelzig, Tennessee Journal)

House Republicans may sit on their hands rather than vote for a $500 million incentive package for Ford’s massive investment in West Tennessee if there isn’t going to be another special session on COVID-19 mandates, Speaker Cameron Sexton (R-Crossville) said Friday.

“If there wasn’t a special session, you’d have members who vote against [the Ford deal] in the House,” Sexton told WWTN-FM. “Instead of getting the 90-plus votes that is like everyone’s in unison with the decision and wanting Ford, you’d be in the 70s. It would still pass, but is that really the message you want to send to the biggest investment in Tennessee history?”

Gov. Bill Lee has called a special session for the week of Oct. 18 to address issues related to the Ford deal. He extended his executive order allowing parents to opt their school children out of mask mandates on Thursday and said he wants to fight against federal rulings and orders about the issue in court rather than in the General Assembly.

That’s not good enough for some GOP lawmakers.

“You just have members who are like, If I’m in East Tennessee, and it’s great that we landed that in West Tennessee, but I’ve got families and parents over here and who need help and we’re not doing anything to help them. And why can’t we?” Sexton said.

“Members at that point may choose to vote for it anyway or they may choose to say I may not vote no, but I’m not going to vote yes,” he said.

One issue Sexton said lawmakers may want to take up is whether businesses should be subject to lawsuits from workers they require to get vaccinated against COVID-19.

“Currently they have absolute immunity if an employee has a reaction to that vaccine,” Sexton said. “So, I think it’s important for us to go in and take a look and say if you do a mandate on your employees then you shouldn’t have the immunity to where they don’t have any repercussions if that happens.”

The business community is likely to take a dim view of lifting liability protections enacted amid the pandemic.

Sexton and Senate Speaker Randy McNally (R-Oak Ridge) issued a joint statement on Friday:

The Ford megasite deal is transformational for Tennessee, and we look forward to working with Gov. Lee to finalize this project as part of his special session call for Ford Motor Company. At the same time, we have heard from many Tennesseans seeking relief from burdensome Covid-19 mandates being imposed upon them. We are working together per our state constitution to call an additional special session upon the completion of the megasite session to address issues surrounding Covid -19.”

Lee calls special session limited to Ford deal

Gov. Bill Lee speaks at Ford’s announcement it will build an electric vehicle and battery plant at the Memphis Regional Megasite on Sept. 28, 2021. (Erik Schelzig, Tennessee Journal)

Gov. Bill Lee has issued a call for lawmakers to return into a special session starting on Oct. 18 to take up a $500 million grant for Ford to build a new electric vehicle and battery production campus in West Tennessee and to establish a college of applied technology at the site.

While Republican lawmakers are clamoring for a platform to denounce what they see as federal overreach on mask mandates and COVID-19 vaccines, Lee is limiting the call of the special session to matters related to the Ford deal.

While it remains unclear what exactly lawmakers could do to fight federal court rulings or executive orders, there is still a growing sentiment that a special session should be held if lawmakers are coming back to Nashville anyway for the Ford deal. If so, they may have to take the route of calling themselves into their own separate special session by gathering the signatures of at least 66 House members and 22 senators — a step that has occurred only twice in Tennessee history.

Here’s the release from the governor’s office:

NASHVILLE, Tenn. – Today, Tennessee Governor Bill Lee called for the Tennessee General Assembly to convene on Monday, October 18, 2021 for a special session to address funding, buildout and oversight of Ford Motor Company’s historic $5.6 billion investment at the Memphis Regional Megasite.

“Our partnership with Ford and SK Innovation will transform West Tennessee, and it’s important we ensure this project has the structure, funding and accountability needed to be successful,” said Gov. Lee. “I am calling a special session to secure a lasting impact for Tennesseans, and I thank the legislature for their partnership in an efficient, productive assembly.”

During the special session, lawmakers will address funding to support and benefit the Memphis Regional Megasite, including site development, education and workforce preparation.

The full special session call may be viewed here.

Ford picks Memphis Regional Megasite for $5.6B electric vehicle and battery plant

Ford is announcing plans to build a $5.6 billion electric vehicle and battery manufacturing facility on the sprawling Memphis Regional Megasite. The Dearborn, Mich-based automaker said the project dubbed Blue Oval City will create nearly 6,000 jobs.

Gov. Bill Lee said he will call a special session in the coming weeks for lawmakers to approve a $500 million incentive package for the project slated to comprise nearly all of the 6.5-square-mile site in Haywood County. Lee noted that Tennessee will join Indiana as the only states where four auto companies produce vehicles. The Volunteer State’s existing manufacturers, General Motors, Nissan, and Volkswagen also have made heavy investments in electric vehicles.

Ford plant is projected to start assembling electric F-Series trucks in 2025 and the joint venture with South Korea’s SK Innovation is slated to begin making batteries there the same year. Company officials say it is Ford’s first all-new plant to be commissioned since 1969.

The Ford F-150 Lightning Electric Truck. (Image credit: Ford)

The ongoing development of the megasite has been a subject of a yearslong debate among lawmakers and politicians, some of whom have complained it was too big, remote, and expensive. According to an outside study previously commissioned by the Lee administration, 18 prospects had considered — but decided against — the megasite, including five original equipment manufacturers, five battery or stored energy companies, six tiremakers, one data center, and an appliance manufacturer.

Here’s the full release from Ford:

Continue reading

AP: Lee won’t incentivize COVID-19 shots, but farmers get state money for cattle vaccines

Gov. Bill Lee, left, is awarded a plaque at a Tennessee Cattlemens Association meeting in Gatlinburg on July 30, 2021. (Image credit: Gov. Bill Lee’s office)

Gov. Bill Lee has refused to offer incentives for Tennesseans to get vaccinated against COVID-19, but the Republican’s administration has paid nearly a half-million dollars to farmers to encourage them to inoculate their cattle, according to a report by Travis Loller of the Associated Press.

Tennessee’s Herd Health Program was launched in 2019 under Lee, whose family cattle business, the Triple L Ranch, featured prominently in his campaign and in social media posts since coming into office. The program reimburses participating farmers up to $1,500 for vaccinating their herds. The state has distributed $492,561 since 2019, the AP reports.

Lee spoke of his opposition to incentivizing people to get COVID-19 shots at the Tennessee Cattlemen’s Association annual conference on Friday.

“I don’t think that’s the role of government,” Lee told the group. “The role of government is to make it available and then to encourage folks to get a vaccine.”

Lee’s office downplayed the apparent contrast between the governor’s stances on human and bovine vaccinations.

“Tennesseans have every incentive to get the COVID-19 vaccine – it’s free and available in every corner of the state with virtually no wait,” Lee spokeswoman Casey Black told the AP in a statement. “While a veterinarian can weigh in on safely raising cattle for consumption, the state will continue to provide human Tennesseans with COVID-19 vaccine information and access.”

Black did not respond to questions about whether the Lee family farm received money under the state program. Records from the state Agriculture Department don’t show anyone named Lee as a recipient.

Read Loller’s whole story here.

SmileDirectClub announces 2,000 jobs in Nashville

Gov. Bill Lee announces a 2,000-job expansion by clear teeth aligner SmileDirectClub in Nashville on March 20, 2019. (Erik Schelzig, Tennessee Journal)

Gov. Bill Lee has announced clear teeth aligner SmileDirectClub will add more than 2,000 jobs in Nashville over the next five years. The new positions will be spread between the company’s downtown headquarters and other facilities in the Antioch community in southeast Davidson County.

There was no immediate word on the level of incentives offered to the company, which is spending $217 million on the expansion.

Here’s the full release from the Lee administration:

NASHVILLE, Tenn. – Tennessee Gov. Bill Lee, Department of Economic and Community Development Commissioner Bob Rolfe and SmileDirectClub officials announced today the company will invest $217 million to expand its headquarters and facilities in Middle Tennessee.

SmileDirectClub, the market leader and pioneer of doctor-directed, remote invisible aligner therapy, will create 2,010 new jobs in Nashville and Antioch over the next five years.

This is SmileDirectClub’s second expansion in Middle Tennessee in two years. In February 2017, the company announced a $4.5 million expansion across two Davidson County locations, which supported the creation of nearly 450 new jobs. Currently, SmileDirectClub employs more than 1,600 people in the Nashville area.

Continue reading

Guber forum: Harwell and Boyd clash on ECD grants; Fitzhugh criticizes Dean

In a gubernatorial candidate forum Tuesday, House Speaker Beth Harwell promised, if elected, to reject any state-funded financial incentives for businesses moving into Middle Tennessee, reports The Tennessean. Fellow Republican candidate Randy Boyd, a former ECD commissioner, rejected the idea.

On the Democratic side, House Minority Leader Craig Fitzhugh criticized his primary opponent, former Nashville Mayor Karl Dean, on his handling of federal relief funding after a 2010 flood hit the city.

Continue reading

State paying $17.5M to New York firm for moving to Nashville — along with targeted tax break

The state Department of Economic and Community Development has agreed to give $17.5 million to AllianceBernstein for moving its headquarters from Manhattan to Nashville, reports the Nashville Business Journal.   A bill approved by the legislature this year also gives the company a tax break that served to “sweeten” state support for the move, says the state’s ECD commissioner.

The Beacon Center of Tenessee, which has been crusading against “corporate welfare,” had urged that AllianceBernstein get nothing in the way of taxpayer-funded incentives. The global financal firm announced with Gov. Bill Haslam last month that it will bring 1,050 jobs to the state’s capitol city, investing about $70 million.

Continue reading

ECD deemed winner of Beacon’s TN 2017 ‘Pork of the Year’ award

Press release from Beacon Center of Tennessee

In the 12th annual Tennessee Pork Report, the Beacon Center revealed that state and local government officials wasted more than $400 million of taxpayer money this past year.

The Pork Report highlights a combination of government mismanagement, incompetence, and outright fraud. The Beacon Center allowed Tennesseans to choose the infamous “Pork of the Year” award, and it really came down to the wire. After nearly 400 votes were cast, the “winner” of the award was the Tennessee Department of Economic & Community Development for their Industrial Machinery Tax Credit. The department took 34% of the vote in the public poll.

In one of the most inefficient instances of corporate welfare in recent years, Tennessee taxpayers paid a whopping $67 million annually for a mere 55 jobs per year from 2011-2014, which adds up to $1.2 million per job. Even if the program’s main goal isn’t to create jobs, it is not the government’s role to help buy equipment for some private companies on the backs of Tennessee taxpayers. The $14 million of tax dollars given to the Opryland Hotel to build a waterpark (that residents are not even allowed to use) came in a close second with nearly 32% of the vote. Former Rutherford County Sheriff Robert Arnold and the state Jobs4TN Program came in the 3rd and 4th with 19% and 15%, respectively.

The Beacon Center prints the Pork Report every year to make sure state and local governments are held accountable for how ineffectively they spend our tax dollars. The wasteful spending in this report should make Tennesseans’ blood boil. We hope that government officials will use this report to slash wasteful spending in 2018.

The 2017 Pork Report comes from state and local budgets, media reports, state audits, and independent research conducted by Beacon Center staff and scholars.

Note: The full 2017 “Pork Report” is HERE. Excerpt of some highlighted stuff as ‘nominated’ for Pork of the Year:

Jobs4TN: This state-based program has been taking millions of taxpayer dollars for years, spending more than $60 million in 2016- 2017 alone. This money then goes to a select few fortunate companies for their hiring and professional development needs, empowering government to pick winners and losers, and leaving left-out employers across the state to compete with these subsidized businesses.

Opryland Waterpark: The city of Nashville decided to give $14 million to Gaylord Opryland Hotel to construct a waterpark, and while taxpayers are footing the bill, the waterpark is open only to those staying at the hotel.

• Department of Economic and Community Development (ECD): ECD’s Industrial Machinery Tax Credit has doled out an astonishing $1.2 million in taxpayer money…per job. The tax credit has created just 55 total jobs at a cost of nearly $67 million.

• A Sheriff’s E-Cigarette Inmate Scheme: Former Rutherford County Sheriff Robert Arnold profiteered off a captive audience of local inmates who were sold e-cigarettes from Arnold’s company—earning him and his wife nearly $75,000 over the course of their scheme, which was later exposed by the Tennessee Comptroller’s Office.

Note: Arnold pleaded guilty to corruption charges and was sentenced to four years in prison. Randy Boyd, who resigned as ECD commissioner earlier this year, is running for governor.