Category Archives: economic development

Haslam, others hail bill providing $10M in grants to rural development

Gov. Bill Haslam staged a ceremonial signing for the Rural Economic Opportunity Act of 2016″ in Huntington Friday and Economic and Community Development Commissioner Randy Boyd — among the host of officials gathered for the occasion — promised the $10 million allocated will be spent promptly in grants, according to the Jackson Sun.

The bill (HB2570)…passed through the legislature unanimously and was officially signed by Haslam in April.

“Some of our more rural areas have struggled a little bit more,” Haslam said. “By the way, it’s not just in West Tennessee, it’s all across the state. And it’s not really just in Tennessee, either. That’s true across the nation, our rural areas are struggling with job creation more than maybe our urban and suburban areas are.”

The new law gives $10 million to help rural communities by implementing Propelling Rural Economic Progress (PREP) funds which will be used to help develop industrial sites and tourism spots. The law also makes it easier for businesses moving to rural counties to receive tax credits for their move.

Rep. Curtis Halford, R-Dyer, said the law will help “level the playing field” between rural Tennessee and its more populated sectors.

…Boyd said the money will be given out by competitive grants….

“The $10 million will be spent right away,” he said. “There’s no reason for us to sit on the money; there’s people in need today.”

However, the money is only allocated for 2016-2017. There is currently no plan in place to extend funds into 2017-2018 and beyond.

“This is onetime money for this year’s initiatives,” Boyd said. “We’re hopeful that we’ll be successful and we can prove return on investment, and if we can we hope we’ll be able to get more funds in the future.”

Haslam to high school kids: Go to work in construction business

A year after he signed the enabling legislation into law, Gov. Bill Haslam joined construction industry leaders Wednesday in launching a marketing campaign called “Go Build Tennessee” to encourage high school students to consider careers in the building trades, reports Richard Locker.

Tennessee is the third state with a similar program, following Alabama, where it began in 2010, and Georgia, in 2012. It uses an array of media, public relations and outreach efforts targeting students as early as junior high to consider careers as boilermakers, carpenters, electricians, electric linemen, equipment operators, iron workers, masons, plumbers and pipe fitters, road builders, sheet metal workers, welders and other trades.

Haslam said that for every five skilled tradesmen about to retire, only one new worker is in the, education, training and apprenticeship pipeline to replace them. And he said the construction industry is expected to grow 22 percent over the next decade.

“For anybody who’s seen the growth happening in Nashville and across the state, the challenge for us is … across all the different aspects of construction,” the governor said. “What we hope this effort will do is help young people know, ‘Hey, that’s a great career opportunity for me and something I should think seriously about,’ because it’s a realistic career path that can provide a great occupation.”

State lawmakers in 2015 approved the “Go Build Tennessee Act,” creating a nonprofit corporation and board to run the program and diverting about $3 million in surplus contractor-licensing fees collected by the state into the program, over the next three years to pay for it. The bill was proposed and lobbied for by the Tennessee Associated General Contractors, Associated Builders and Contractors of Tennessee, the Home Builders Association of Tennessee, and the Tennessee Road Builders Association.

Religious counseling bill could offset $8M subsidy of ‘Nashville’ TV show?

Gov. Bill Haslam included $8 million in the coming year’s state budget to subsidize the TV show “Nashville” (previous post HERE) and it was approved by the Legislature. Now, a Fox News entertainment writer is speculating that Haslam’s signature on a bill allowing therapists to refuse counseling to persons based on sexual orientation could lead to cancellation of the series.

ABC’s Nashville has received deserved praise for its handling of Will Lexington’s (Chris Carmack) struggles with his sexuality, and his whole coming out storyline. But now, some of the show’s stars find themselves in the middle of a real-life battle over a recently-passed Tennessee law that discriminates against LGBT people.

House Bill 1840, which Gov. Bill Haslam signed into law this week, gives therapists and other mental health professionals the right to refuse to treat patients whose lifestyles go against the professional’s “sincerely held principals.”

When the bill was still under review, Nashville star Connie Britton spoke out against it, telling The Hollywood Reporter: “I shoot a TV show in Tennessee, and honestly, if they proceed with this, I’m not necessarily going to feel comfortable working there. That is a tricky situation because of course we employ a lot of people in the state, and you certainly don’t want to have to interrupt that, but at the same time, this is the only way that we can have our voices be heard.”

Added Carmack — who, according to THR, is reconsidering buying property in Nashville because of the law: “We said, ‘Do we want to live in a place like this?’ … I guarantee you that there are many more individuals like myself and my fiance who are potential long-term transplants from all over, who are saying, ‘Is this a place I would want to call home, a place that would write this sort of thing into legislation?'”

A “tricky situation,” indeed. ABC has yet to renew Nashville for a fifth season, but if it does, Carmack and Britton’s comments beg the question: does the show’s cast and crew have a responsibility to put their money where their mouths are, so to speak, and refuse to shoot in the state? Certainly Britton’s comments, more so than Carmack’s, will be perceived as an empty threat if the show continues to film there. Perhaps rather than pulling production from the state, the cast and crew of Nashville can use their influence to raise awareness and money for LGBT rights issues, and fight the good fight from within.

On the other hand, if ABC isn’t planning to renew Nashville, this could be a nice opportunity for the network to put an activist label on its decision. Particularly because it would be difficult if not impossible for the show to relocate elsewhere, since so many scenes are tied to actual Nashville hotspots, including the Bluebird Caf and the Grand Ole Opry — not to mention the local musicians who provide much of the show’s music.
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Note: Post on Haslam signing the bill is HERE.

ECD promoting GOP on Facebook?

More than half of the money a state agency has spent on Facebook ads targets supporters of Tennessee’s top Republican politicians, with none spent on Democrats, according to WSMV-TV. The report prompted a press release protests from state Senate Minority Leader Lee Harris, D-Memphis, and TNDP Chair Mary Mancini.

The mission of the Tennessee Department of Economic and Community Development is to attract businesses to the Volunteer State, as well as to let the community know what’s going on. One of several marketing strategies involves paying for ads on Facebook.

What pops up in a user’s newsfeed may seem random, but Facebook can target users based on interests. And if you “like” certain officeholders, there’s a good chance you’ll see updates from the TDECD Facebook page.

The Tennessee Department of Economic and Community Development is a nonpartisan state agency, except they’ve paid more than $18,000 to target people who “like” Gov. Bill Haslam, Sen. Bob Corker or Sen. Lamar Alexander. Not a dime was spent on targeting fans of Democrats.

That fact troubles Bruce Oppenheimer, a political science professor at Vanderbilt University.

“I think the real question is more so, who’s not getting the information who deserves to get the information?” Oppenheimer said.
… So why would an agency that’s interested in developing businesses and creating jobs not cast a wide net to garner fans of all political parties? The I-Team sat down with TDECD Commissioner Randy Boyd.

“Should politics be involved in a department that’s supposed to be apolitical?” asked reporter Alanna Autler.

“Politics is a pretty broad word,” Boyd said. “We have to work with the legislature and the legislature is always creating new legislation affecting things we do, and they are political. So in that sense, the politics of new laws and legislation do affect what our development and any department does.”
… Many of the ads pushed for more Facebook likes. Others were more specific, such as a post around Valentine’s Day 2014 that targeted users who like “Bill Haslam or chocolate.” But of all the metrics the department used, none mentioned Democrats.

“I think the blatancy of this may be a little different. Probably the thought is, no one is really going to find out about this sort of targeting,” Oppenheimer said. The professor said the strategy also resembles microtargeting, a tactic used during political campaigns to reach voters.

“It looks like something a campaign or somebody who’s thinking of running for office [would do],” Oppenheimer said. “It’s an attempt to get your message out and manage what you’re doing and who you are.”

Political watchers say there’s talk in Republican spheres about Commissioner Boyd running for governor.
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Note: The Harris commentary is below. Continue reading →

Haslam, Boyd headed for China, Korea and Japan

News release from Department of Economic and Community Development
NASHVILLE — Tennessee Gov. Bill Haslam and Economic and Community Development Commissioner Randy Boyd will travel to Asia on an economic development trip focused on increasing foreign direct investment opportunities specifically related to the automotive, high tech and advanced manufacturing sectors.

The 10-day business trip is scheduled from Monday, May 2 to Wednesday, May 11 and will include stops in Korea, China and Japan. Haslam and Boyd will meet with executives of existing Tennessee businesses as well as work to expand relationships between Tennessee and Asian business communities.
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Haslam’s $30M secret project draws criticism

By Erik Schelzig, Associated Press
NASHVILLE, Tenn. — A state senator on Tuesday questioned fellow Republican Gov. Bill Haslam’s proposal to earmark $30 million for an undisclosed economic development project in Tennessee.

Sen. Bill Ketron of Murfreesboro cited state money spent on problematic economic development deals, including a shuttered polysilicon plant in Clarksville, a West Tennessee solar farm that still isn’t operational, and a facility to study converting switchgrass to fuel that has been moved to Iowa.

“We continue year after year, and even going back to the prior administration, laying out large chunks of money for what we think might occur,” Ketron said. “And they don’t seem to materialize.”

State Finance Commissioner Larry Martin declined to elaborate on the development prospect other than to describe it as an “exciting project” during a Senate Finance Committee meeting.

Ketron said he was uncomfortable voting for the new project on the basis of state officials saying, “Trust me, it’s going to be good.”
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$100M wind farm coming to Cumberland County

News release from Cumberland County officials
January 12, 2016 (Crossville, Tenn.) — Cumberland County (TN) officials announced today that Apex Clean Energy, an independent renewable energy company based in Charlottesville, Virginia, is planning to locate a new wind farm on private land in the county, ten miles east of Crossville.

The Crab Orchard project represents an investment upwards of $100 million into Cumberland County and is expected to produce up to 71MW of power with 20 to 23 turbines. The project is expected to begin operations in 2017.

“This is very exciting news for Cumberland County — for our residents, businesses and visitors, alike,” said Brad Allamong, president of the Crossville/Chamber of Commerce. “We’re thrilled that so many business and government leaders across this county came together to collaborate on this common vision. It’s such positive news for our region.”
Continue reading →

Lobbyists float, then drop, new state-supported investment plan

In a second article on the state’s TNInvestco program, The Tennessean’s Jamie McGee reports on legislative approval of the effort in 2009 and a move afoot for follow-up legislation – with more state spending – that has been pitched by lobbyists in Tennessee but won’t be pushed in 2016.

TNInvestco is a modified version of what is known by the acronym CAPCO, or “certified capital company.” Major companies involved are Enhanced Capital, based in Manhattan, and at least two other out-of-state investment groups — Advantage Capital Partners in St. Louis and Stonehenge Capital Company in Baton Rouge, La.

Tennessee passed an improved version of the CAPCO model in 2009, one that yields more returns for the state and includes more oversights, but it still carries high costs. Enhanced, which partnered with Nashville-based Council Capital, was the only CAPCO fund chosen to participate in the state’s $200 million TNInvestco program.

Despite failing to secure more lucrative terms for investors, the CAPCO funds have not abandoned their interest in Tennessee. In November lobbyists for Enhanced and Stonehenge reached out to lawmakers and economic development officials to gather support for other capital programs that leaders in other states and policy analysts have described as expensive, exploitative and lacking results to justify the amount of state spending.

… The CAPCO groups’ new concept for Tennessee, which would have targeted rural areas, is no longer on track to be filed this year. While the state has avoided this legislation in 2016, these funds could resurface in the coming years. (Note: There’s a review of similar legislation approved in other states, including Arkansas and Georgia.)

… Enhanced, Stonehenge and Advantage brought a CAPCO bill to Tennessee in 2009 and hired a team of lobbyists including Bo Johnson, Baylor Swindell, Anna Windrow and Nathan Poss. State Sen. Doug Overbey, R-Maryville, and state Rep. Charles Sargent, R-Franklin, who saw benefits in a jobs bill in the wake of the recession, sponsored the bill. Former Tennessee Revenue Commissioner Reagan Farr and Matt Kisber, Economic and Community Development commissioner in former Gov. Phil Bredesen’s administration, also worked on developing the bill.

… Throughout the TNInvestco bill process, only a handful of lawmakers, namely state Rep. Susan Lynn, R-Mt. Juliet, asked questions about how it worked, and they were often met with misleading responses. In 2009 Lynn expressed skepticism that the state would reap returns, and she was the only lawmaker not to vote for it. By 2010, several lawmakers had objections to the law.

“I am very concerned about some of these deals that put the state at risk and a private company comes out a winner no matter whether the deal flies or folds,” said state Sen. Randy McNally, R-Oak Ridge, who voted against additional funding for the program in 2010. “TNInvestco is a good example of that, and I was very concerned about it.”

…When asked about a potential New Markets bill in Tennessee, Economic and Community Development Commissioner Randy Boyd said his office had been approached in November by Johnson, who was acting on behalf of Enhanced Capital. Boyd said he was told that a similar structure had been developing in Ohio.

An Ohio Rural Jobs Act, supported by Enhanced, Advantage and Stonehenge, has passed in Ohio’s Senate. In a structure that resembles New Markets legislation, the rural jobs bill would lead to $75 million in investments, incentivized by $45 million in tax credits, with insurers securing the transactions.

State Rep. Cameron Sexton, R-Crossville, said in mid-November he would be sponsoring a bill that had moved away from the New Markets model to a rural development bill that would be a $100 million investment program.

“Based on what other states have done and what Tennessee has done in the past, we have a very good blueprint of what not to do and what has not worked and (are) putting in place a plan that we think is very successful,” Sexton said. Investments would go “toward existing rural businesses, to help them expand and grow when they might not have enough capital or borrowing power to do it.”

The day after Sexton’s comments, lobbyist Johnson, hired once again by Enhanced and Stonehenge, said the rural jobs proposal was no longer moving forward.

Johnson said the “idea of a New Markets bill in Tennessee was discussed but never proposed.” I

TNInvestco has run through $200M, results unclear

TNInvestco, established with $200 million in state taxpayer funding to finance startup companies, is almost out of money, reports The Tennessean, and so is a similar federally-funded program called INCITE.

After citing a startup that got $4 million from TNInvestco and INCITE and is doing pretty well, the article goes on to raise questions about whether taxpayers will ever get their money back, which was part of the TNInvestco plan sold to state legislators when it was approved.

Just $17 million remained as of 2014 — the most recent year financials are available. The state’s $30 million INCITE program, a federally funded initiative run by Launch Tennessee, is down to $2 million as of 2015.

TNInvestco and INCITE have been critical drivers in developing the state’s startup growth, helping to build accelerator programs and attract more private capital to Tennessee companies — more than $325 million to date.

…TNInvestco has become a sparkplug for Tennessee’s startups and it has spurred job creation across the state. It has also put private investors on track to make millions and yielded millions in tax savings for insurance companies. But TNInvestco is a long way from repaying taxpayers.

In 2009 Tennessee lawmakers approved $200 million to fund TNInvestco. By enlisting private fund managers to invest the state’s money and insurance companies to help pay for the program, TNInvestco would support small business growth and create jobs. There was also the expectation that the state would recoup its massive investment.

…The TNInvestco program was pitched to Tennessee lawmakers as a jobs bill, but the descriptions that bill sponsors and state officials provided were often confusing, misleading or incorrect. But in a time when the national economy was still reeling, the bill received nearly unanimous bipartisan support.

The problem is in TNInvestco’s design: It forces the state to bear all the risk and see only half of the proceeds, providing far more profits to the managers of 10 TNInvestco funds than they would make in the private markets. Tennessee also loses millions through the sale of tax credits to fund the program, tens of millions that could be spent on funding schools, roads or more early-stage companies.

..As of 2014, 10 of the 175 companies that have received TNInvestco funds sold for a profit, and if returns were distributed, the state would lose money on all but four of those deals. Fifty more companies have closed or sold at a loss. The reinvestment period extends until 2017, which means that the TNInvestco investors’ early returns still have the potential to strike gold in a new investment or to fizzle in a failed company. But, if the 10 funds had to distribute returns in 2014 on those 60 company sales or writedowns, the state would gain close to $10 million on $21 million invested, booking a more than $11 million loss.

ECD expanding TN international operations

Tennessee’s Department of Economic and Community Development will soon contract for a representative to promote the state in South Korea and ECD Commissioner has plans for new offices in China, Germany and Italy as well, according to WPLN.

Pending final contracts, the state Department of Economic and Community Development is planning to open a new office in Seoul early next year. The goal is to recruit more Asian companies to do business in Tennessee.

And it’s not the only part of the world the state is eyeing: Commissioner Randy Boyd also wants an office in southern Germany, to access its automotive industry, and in northern Italy, for its ceramic tile business.

“We’ve got a couple of companies already from northern Italy” in Tennessee, Boyd says. “It turns out, because of our clay and other natural resources, this is a great place for ceramics.”

Boyd — essentially the state’s chief salesman — also plans to open an office in China and possibly add a second one there to tap into more of the market.

“Businesses in Italy or in China don’t know that much about Tennessee. They may not even be able to find us on a map, so just hoping that they might show up at our door one day and decide to locate here is pretty unrealistic,” he says.

…Tennessee has had a similar office in Japan for the last decade and a half. Boyd credits the abundance of Japanese companies in Tennessee — 182 establishments employing more than 48,500 people — to the office’s success.

“We could have one person knocking on doors every day, 10 times a day for the next 20 years, in each of the markets that we’re looking at,” he says.