By Rachel O'Brien, Deputy Policy Editor, OpenTheBooks.com
Metro Nashville is giving $375 million in economic development incentive grants and tax breaks to companies over the next 15 years, fulfilling its commitments to make Nashville a place where companies and their employees want to be.
As far back as 1999, Metro Nashville officials agreed to give tech giant Dell a 40-year property tax abatement to locate in Nashville, as well as $500 for each job it created, costing the city an estimated $72 million.
Since then, Metro government has made deals with at least seven other large companies, offering property tax abatements, job creation incentives and other grants and tax breaks worth $375 million for the companies to relocate to Nashville — or expand operations already there.
Most of these projects are in the midst of their deals, and some haven’t received incentives yet.
The State of Tennessee has made similar deals with numerous companies.
Dell’s 40-year property tax abatement is Metro Nashville’s most generous to date, one that critics call corporate welfare. Metro leaders who support the deal say Dell paved the way for the city's economic success today, making Nashville a more visible as a place where companies want to be.
Davidson County gained about 3,000 Dell jobs, $100 million in facility spending and $240 million in wages in five years, according to The Tennessean.
For its part Dell says its business led to another 5,900 jobs in Tennessee from suppliers, contract workers and third-party vendors. Dell also says the company spent $289 million with local suppliers.
Many other deals followed. Combined incentive packages in 2010 for 4-start hotel Omni Nashville totaled $157 million, healthcare giant HCA’s 2014 package was valued at $66 million, tire company Bridgestone is getting $56 million in its 2014 package and Amazon is poised to get $15 million from Metro out of its 2019 deal, although it has yet to receive any of that, according to Metro records.
Investment company AllianceBernstein is slated for $3.7 million from its 2019 agreement– a spokesperson said while the company hasn’t received these Metro incentives yet, they intend on beginning the incentive process beginning this year, and currently have more than 1,000 employees working in their Nashville HQ.
Tech company Philips Holding’s 2017 agreement with Metro estimates a $2.9 million cost, while Warner Music will get between $1 million and $2 million from is 2016 agreement to create jobs, none of which it has received yet.
Each deal includes an agreement that the company gets $500 per job created. Some have specific goals of total hiring – from 500 to 1,700 jobs — and usually get the $500 per job for seven years.
But other generous property tax abatements were given just for the company to agree to have an office in Nashville.
Among the other companies to come to Nashville were teeth-straightening company Smile Direct Club, which moved its headquarters to Nashville in 2016 and EY, formerly known as Ernst & Young, opening a 600-person office in Nashville in 2018
Both pharmaceutical company Harrow Health and software company Pilot.com announced plans in 2019 to move some of its operations to Nashville.
Economic development officials say incentives are a worthwhile investment that pay for themselves through increased tax revenue generated by the company and its employees.
Critics call this corporate welfare.
In 2019, Nashville Business Journal reported that tax breaks jumped 35% in a year, leading to Metro Nashville waiving $6.6 million the year before for companies promising to add jobs and keep the ones already there.