NEWS ANALYSIS: Mayoral economic development stance differs from Purcell

Monday, November 19, 2007 at 1:40am

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.

Incentive Challenged

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.

Filed under: City News
By: idgaf on 12/31/69 at 6:00

While some incentives can be helpfull others could be damageing.If they don't pay their own way why would we need/want them?Sorry to all the jock-sniffers but I don't see the upside to giveing away 40 million (per year) dollars of taxpayers money to millionairs to make more money. You can spin it all you want but we don't get that much out of them.Dell and HCA is was no bargain either. Property taxes pay the bills and waiveing them shifts the burden to the residents that are already here and in some cases like the sounds "deal" would have increased the burden on them.Seems we have the reputation these days as an easy mark. Not only us but the whole area. Much to much was given away to Nissan. They made out like bandits both as a company and as individuals moving here from Ca.Not all move ins are a plus if it effects in a negitive way the residents that are already here. ie higher house prices and property taxes. Sure your property is worth more on paper but unless you sell it you do not benifit by that in a real way, in fact it costs you more for that "paper profit".

By: TITAN1 on 12/31/69 at 6:00

id, if it was up to you, we would be Mayberry. Thank God, it is not up to you.

By: BigPapa on 12/31/69 at 6:00

I don't have a problem with companies getting some incentives, especially if they bring "real" jobs- professional jobs to the area. The argument for the sports doesn't hold water with me because the "jobs" they suppossedly help support are resturantes and bars- we seem to have more than enough minimum wage jobs w/o benefits.

By: WickedTribe on 12/31/69 at 6:00

So it really is Purcell's fault that Franklin was stealing so many businesses (including Nissan) from Nashville proper?Incentives are really a case by case basis. Even when they're not worth it in the short term (like Dell and their painfully low-paying jobs), it's pretty much always worth it in the long term. But, like with the Predators, you also need some guarantees that the businesses will remain here long enough to get an ROI.

By: chakracon on 12/31/69 at 6:00

Why do you think big business comes to Tennessee, Mexico and India.....Cheap labour!!!

By: idgaf on 12/31/69 at 6:00

Just how is Dell worth it in the long term when we gave the property and the taxes away for those low paying jobs, plus we are paying to train them (every year) and many of the jobs go to out of country residents. Some of you are really easy to sell crap to and believe anything you are fed.

By: TITAN1 on 12/31/69 at 6:00

id, then their are people like you who trusts no one and hate everything.

By: idgaf on 12/31/69 at 6:00

Dispute the post titian. your personal attacks are getting tireing and really are juvenile.I surprise Clint hasn't squished you already.

By: TITAN1 on 12/31/69 at 6:00

id, what about your personal attack " Some of you are really easy to sell crap to and believe anything you are fed?" You attack everyone who disagrees with you. All you do is whine.

By: idgaf on 12/31/69 at 6:00

3 of 9 posts are yours on this tread and you contributed NOTHING.

By: TITAN1 on 12/31/69 at 6:00

id, I am for incentives, especially for pro sports because it is great for Nashville's image and brings in revenue. Now, what kind of cheese do you want?

By: WickedTribe on 12/31/69 at 6:00

Well for starters id, the tax exemption incentive for Dell is only 40 years. So on the 41st year, they'll be paying full property taxes! Now I think that's ludicrous (the whole Dell deal was), but in the long term, Dell will be profitable to the city unless they up and move out at the end of the 40 years.

By: Fundit on 12/31/69 at 6:00

If things go the way Mr. Id wants them, Dell will be in India in no time. Count on it.

By: Socrates on 12/31/69 at 6:00

Ask one thousand tourists from Japan, Germany, India, Australia, New Zealand, Russia, UAE, United Kingdom, etc., about the Grand Old Opry, and they will smile and tell you that is their destination in Nashville and which entertainer is their favorite. Conversely, ask them about the Titans, or the Predators or the Sounds and they will give you a polite, but quizzical look and ask if they are a Country band. Nashville already is world famous for its Country music. Professional sports on the other hand is infamous due to the steroid debacle, criminal behavior of it marquee players, and the impression that it is a spectator sport only for the rich, corporate board members and greedy politicians.

By: Socrates on 12/31/69 at 6:00

Dell already IS in India as well as other locations worldwide. Dell Computer India Pvt Ltd12/1,Divyasri Green, Inner Ring RoadDomlur, Bangalore, 560071+91 80 25357311” upgrade my IT knowledge - Sonam - 30 Oct 2007I am from Bhutan and looking for work in an Information Technology company and learn about C, C++ and many things. I want to upgrade my knowledge in computers. Is there any Vacancy? Please let me know…”MonsterIndia.comThe future is no longer tomorrow, it is here today.

By: Fundit on 12/31/69 at 6:00

"Professional sports on the other hand is infamous due to the steroid debacle, criminal behavior of it marquee players, and the impression that it is a spectator sport only for the rich, corporate board members and greedy politicians."The packed LP Field contradicts that. Sorry.

By: TITAN1 on 12/31/69 at 6:00

Yeah right Socrates, that is why thousands attend games, races, etc and millions more watch on tv. Thousands of NFL, NASCAR, etc fans overseas. Most of the fans that attend are NOT rich! Yes Nashville is famous for music, but that doesn't have to be the only draw. You take the few bad athletes and compare them to the thousands who don't get into trouble. It amazes me how some people tag something for being bad when it is only a few that have a problem.

By: MJB on 12/31/69 at 6:00

I'm always glad to live in a city w/ pro sports, but not if they've cost city greatly. I'm w/ BigPap on this one: Pro sports are highly over-rated for what they bring to an economy. A city that wants them must wnat them for the entertainment factor & the constant acknowledgment of the place in every day's paper.

By: Socrates on 12/31/69 at 6:00

If the Titans, Predators and Sounds were so beneficial for the community, as a few fanatics would want us to believe, then there would be no need for the taxpayers to subsidize the maintenance and repair of the LP Field, the Sommet or Greer as well as its inevitable future replacement. Surely, if these fanatics were so enthralled with their heroes then they would agree to paying the full cost of its maintenance, repair or future replacement. Right?