November 28, 2018; Tennessean
“Multiple Metro Council members want to tie the financial incentives offered to Amazon for the company’s new Nashville hub to pay increases that city workers were promised but haven’t received,” reports Joey Garrison for the Tennessean.
The request, notes Garrison, is outlined in a non-binding resolution filed last Tuesday by two liberal (Freddie O’Connell and Brenda Haywood) and two conservative city council (Steve Glover and Robert Swope) members on the 35-person metropolitan council.
As NPQ covered last month, while Amazon selected Long Island City in the borough of Queens in New York City and Arlington in northern Virginia to be co-regional headquarters—each of which Amazon says will employ up to 25,000—the company also said it would locate an operations center in Nashville that could employ up to 5,000.
The Nashville resolution, writes Garrison, “targets $15 million in incentives that Mayor David Briley has proposed for Nashville to land the new Amazon Operations Center of Excellence, which is expected to bring 5,000 high-paying jobs to downtown.” Nashville’s $15 million is based on paying $500 per each year for the next seven years for each Amazon employee, up to a maximum payout of $15 million. This $15 million payment has yet to be approved by the metro council. It forms part of a larger $102 million economic incentive package offered to Amazon. (Additionally, the state will pay $65 million cash and extend $21.7 million in tax breaks.)
Councilmember Glover informs Garrison that he signed on to the resolution, “We should be taking care of our employees, because ultimately if we’ve got 5,000 more people pouring into our city, we need to make sure our basic services the city offers are accommodated. If we quit paying our people and taking care of them, they’re leaving us.”
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Metro employees, reports Garrison, had been expecting cost-of-living adjustments as budgeted by the city in June, but Mayor David Briley has held them back because property tax revenues fell short of projections. This action by Briley, not surprisingly, has upset city unions.
Mark Young, president of the firefighters’ union, tells Alexandra Koehn of local TV station WTVF, “Big corporations have said they’re coming to Nashville, Nashville is rolling out the red carpet, but the people out here working the streets are being left behind.” The city’s Fraternal Order of Police is also upset, releasing a press release that denounced the $15 million as “corporate welfare.” President James Smallwood tells Koehn that, “We don’t make a whole lot of money, you’re not getting rich doing this job like I said. Your starting salary is $43,000 a year, and in order to make ends meet, you’ve got to work extra jobs just to pay the bills and that’s not a situation we should be existing in.”
For their part, Governor Bill Haslam and Briley have called the package “performance-based” incentives and say that the Amazon deals, though large, are smaller in amount than many other past economic development deals in Tennessee. Certainly, the tax abatements and other tax breaks offered Amazon pale in comparison to other tax deals inked in Tennessee, such as the $800 million offered Volkswagen by the state a decade ago for a 2,900-person employee car factory.
It remains to be seen whether the Nashville council will approve the resolution to tie Amazon incentives to the city giving cost-of-living raises to employees. That said, what is clear is that the Nashville rumbling from councilmembers and its public employee unions speaks to a larger trend of increased scrutiny of the public subsidies that corporations receive.
Just this past January, Nashville’s council approved a measure to require economic development incentives to “disclose details like how many county residents they’ll hire, the wages they’ll pay and whether they’ve had any safety violations in the past.” In part to quell critics, last week the city released the actual offer it had offered to Amazon had Nashville “won” the big prize of being Amazon’s co-headquarters city. Not counting state money, for the city alone, the price tag would have been $25 million a year for 15 years or a total of $375 million.—Steve Dubb