ECD Memo: Executive Seeking State Grant is ‘Personal Friend’ of Governor

A Department of Economic and Community development memo, prepared while ECD considered state incentive grants to ProNova Solutions, pointed out that one of the company’s executives is a “personal friend” of Gov. Bill Haslam, reports Josh Flory.
Earlier this year, ProNova Solutions — the local firm that is gearing up to create proton therapy equipment — announced plans for a new headquarters and research facility at Pellissippi Place technology park, in Blount County.
As part of that deal, the company is paying virtually nothing for 26 acres, and no property taxes for the first eight years after its phase one facility is completed. It will pay the full property tax rate only after 12 years.
But those local incentives aren’t the only ones on offer.
After the News Sentinel filed an open-records request, the state Department of Economic and Community Development confirmed this month that it has offered nearly $4.3 million in grants to ProNova, including $3.7 million for public infrastructure in the park and $525,000 for job training.
Clint Brewer, a spokesman for the department, said in an email last week that the project was working its way through the department’s approval process, and that the grant had not yet been contracted.
In addition, the Tennessee Department of Transportation has committed more than $1.5 million in State Industrial Access road funds for a road extension related to the project.
Like most such incentive deals, the package is based on the expectation that the state will reap plenty of rewards in terms of job creation.
ProNova is expected to invest $52 million in the project and employ 500 people by 2018, and ProNova CEO Terry Douglass has estimated that the company could have revenues of $3.5 billion by 2023.
The internal state documents provided an interesting look at the process, though.
A briefing prepared for ECD Commissioner Bill Hagerty, in preparation for a call with a ProNova executive, noted that Douglass had previously met with Gov. Bill Haslam.
“Terry is a personal friend of the Governor’s,” the briefing added.
In an email, Brewer — the ECD spokesman — said the briefing was prepared in the spring of 2012. He said the notation about Douglass’ friendship with Haslam is not the sort of information that is typically included in such a briefing.
“The staff that prepared this briefing was trying to provide as much information as possible,” Brewer said. “The department’s decisions about incentives are based on the merits of a project and return on investment to the state. This information has no bearing on the department’s incentive process.”
Brewer said the commissioner never saw the briefing memo, which was prepared by staff no longer with the department.
Douglass said in an interview that he discussed ProNova with the governor about a year ago, although he said incentives weren’t discussed at that time
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