During the mayoral campaign, there were many in Nashville’s business community who thought Karl Dean would be Bill Purcell all over again with economic development.
They didn’t mean that in a positive way.
The business community had a love-hate relationship with former Mayor Purcell. It loved that he was a consummate salesman for the city but it hated that he was exceedingly tight-fisted with economic incentives in recruiting companies.
Nashville won economic development accolades, No. 1 this or No. 1 that, but also developed a reputation as a city that doesn’t do incentives. So while it landed several headquarters, the question is how many other opportunities were missed and whether the reputation can be reversed?
Apparently, the environment is going to ease up under Dean. It’s probably too early, however, to say it is day versus night. But perhaps it could be said that there is a new dawn.
The Purcell Slow Walk
In Dean’s office, there is an internal mantra regarding economic development – “We’re open for business but in a thoughtful and responsible way.”
Now, that might cause some people to cock their heads a bit, thinking, wait, "We saw eight years of that already."
Purcell had a similar mantra. The former mayor, though, invoked it differently than it appears will be the case with Dean. Under Purcell, those who sought to work with the city on incentives or some other help from the city, thoughtful and responsible meant being basically told no on the front end or walked in circles until exhausted or frustrated and prospects left.
The Kentucky theme park developer who proposed Thrillopolis in place of the metal scrap yard next to LP Field several years ago would attest to that. The developer couldn't get an answer on whether or not Purcell wanted to do it. Instead, there was a study and eventually the developer went away.
Proponents of a new downtown convention center felt like Purcell slow-walked that project with studies, leaving proponents to believe he didn't want it on his watch. The feeling is the convention center at least would be under construction by now had he not done some much of that.
Real Effort or Political Cover?
Dean, however, supported the idea of building the convention center during his campaign and as soon as he got into office, he began pushing plans forward on the $455-million project. And his staff went to work to keep the Nashville Predators here by renegotiating a lease with a local investors group trying to buy the team.
With the Predators, some involved have thought the mayor was playing games to provide himself political cover should the deal fail and the team ultimately leaves Nashville. Observers say the mayor's willingness to devote a lot of staff to the negotiations and their diligence in the effort shows a genuine desire to keep the team here and a propensity to work with business.
There's a belief by those involved in the Predators negotiations that Purcell wouldn't have worked the way Dean has, especially considering the team's supporters feel like Purcell and his staff harassed the team.
Notably, Dean's staff selection raises confidence in his economic development acumen. He hired Greg Hinote as deputy mayor, who has a business background in making deals in addition to politics.
Dean also hired Rich Riebeling away from Fifth Third Bank as finance director. Riebeling once served as commissioner of the Tennessee Economic and Community Development Department under former Gov. Ned McWherter. What few people know is that Riebeling played a background role in recruiting Nissan Americas' headquarters to the Nashville area.
Dean's staff now is beginning the search to replace Tom Jurkovich, who recently left as director of the Mayor's Office of Economic and Community Development after six years under Purcell.
Presumably, Dean and his staff will attempt to avoid the misstep Purcell made in his first selection to the office after being elected. Peter Chapman, an exceptionally smart policy guy who later worked with Denver Mayor Hickenlooper, rubbed people in the business community here the wrong way. Jurkovich was well liked in the business community and in addition to recruiting companies, soothed tensions when business people were upset with his boss.
Many cities across the country play the incentive game. Nashville has been fortunate in a certain respect. Its economy has been so good that the lack of incentives offered to attract companies has been overshadowed by success in attracting companies.
While Purcell was mayor, Nashville proper landed Caremark Rx, LP and Asurion. The first two located downtown. Those wins as well as other headquarters coming to the region made top Expansion Management magazine's list of hottest cities for relocating companies two years in a row.
The headquarters came to Nashville without incentives, in a sense proving they aren't always necessary to attract companies. Instead, companies took advantage of the available state incentives if they qualified.
Nashville didn't lose Nissan Americas to Franklin because of a lack of incentives. The company wanted a site that was in the suburbs and was highly visible.
There was some negative talk in real estate circles about Nashville losing Healthways to Williamson County. Healthways asked for an incentive to stay in Nashville and was told no. One former Purcell official said once a city goes down that path, giving incentives to keep a company from going to a neighboring county, that blows the incentive game wide open. Healthways got an incentive to relocating its headquarters to Franklin.
Why Verizon Wireless didn't choose to stay in Nashville is still a mystery.
A former Purcell official said Purcell never was presented with a Dell-sized relocation. If he had been, chances are he would have put together an incentives package, albeit perhaps not as lucrative as the Dell deal that folks have complained that Purcell's predecessor Phil Bredesen struck. Also, if Nissan Americas had wanted to be in Nashville, the former official said Purcell probably would have bent over backwards to get that deal.
There's no telling how many prospects never showed because of the lack of incentives from the city. Nashville's economic developers may not know what lists they didn't appear on as consultants compiled information on cities.
Dean assuredly will be put to the test with several deals floating around Nashville right now and he takes a crack at landing them under his administration.