Chatter: Loose lips can sink relocating company ships

Monday, May 12, 2008 at 1:43am

Area economic development professionals probably wish that they could give every new elected official an introductory course on confidentiality with potential corporate relocations.

Then follow that initial course up with a refresher, or a knuckle rapping, for letting loose such information.

Had new Franklin Mayor John Schoer taken such an educational course, maybe the city wouldn’t be in danger of losing a prospective employer of about 500 people.

Jackson National Life Insurance Co. executives came to town last week looking around at space. It was a prospect that’s been floating around Nashville as the Lansing, Mich.-based company decides were to relocate one of its divisions.

Schoer’s discussing the prospect in a public meeting may have cost the city up to 500 new jobs. That alone may not have been too terrible. But saying there wouldn’t be any tax incentives made it much tougher to bring the company back to town.

It could be Austin, Texas’ gain or whatever other city Jackson National is considering. But Franklin’s loss also could be downtown Nashville’s gain. The company also looked at the AT&T tower.

Interestingly, Jackson National is considering space now filled by Nissan Americas, one of the best-kept secrets for years until the automaker was close to pulling the trigger.

Whenever the Nissan representatives came to town, it was like a scene from Reservoir Dogs. Meet Mr. Pink, Mr. Blonde, Mr. Brown and so on. Real estate representatives know one Nissan official researching the area by only by his first name and didn’t know he was Nissan. It turns out the first name was real.

Economic development officials get apoplectic when word gets out about a prospect, particularly so when it’s an elected official who divulges the name in public.

Corporate relocations are highly sensitive in part because oftentimes the employees who would be moved don’t know their employer is considering such a move. It’s particularly sensitive if a headquarters is involved.

Oreck still has yet to say its headquarters is here. That’s more about sensitivity relative to New Orleans. Yet, most of the company’s headquarters operations will be here near the Nashville airport and Tom Oreck, son of the company founder and the vacuum company’s top executive, bought the late Minnie Pearl’s house.

Fair or not to the employees, companies may be only exploring options and perhaps realize through that process they are better off staying where they are.

Franklin, of course, is getting Nissan as soon as the headquarters building is completed in Cool Springs.

The company got a bevy of state tax incentives. Healthways and Community Health Systems landed tax breaks from Williamson County for moving their headquarters to Cool Springs.

Maybe Franklin doesn’t need to attract more jobs with tax incentives.

Mayor Schoer seems to have sent a strong signal on the use of tax incentives. And Franklin taxpayers probably appreciate that.

The Chatter Class appears Mondays in The City Paper. Comments may be sent to rlawson@nashvillecitypaper.com

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By: JeffF on 12/31/69 at 7:00

Mr. Lawson, great stories today. I hope you got paid overtime for three by-lines today.

By: shinestx on 12/31/69 at 7:00

I don't see what's to be gained politically by an elected official coming out early and saying that a company is "looking" at relocation. First it could jeopardize the deal. Certainly it would make the city where the company is relocating from take notice to ramp up their incentives to keep them. Also, it raises expectations among residents of the city being considered. Then when/if the company does not move there, the elected officials look like they fell short somehow. Or worse, they appear to be incompetent. It's just not smart.

By: dnewton on 12/31/69 at 7:00

This excuse eventually becomes secrete meetings and deals for incentives with taxpayer money. We need open government more than we need the alleged promised and not always real jobs that are promised. Oreck skipped out of Louisiana in a way that made it look like they were leaving their economic development promises to bring jobs to the region. I think they also took about $2 million in local money that they eventually promised to pay back, but the timing of the promise made them look bad. I am not sure how much the nation benefits when one company is pirated from another state. I am not sure of the value of subsidies when a business is moved internally from one part of the state to another. It all sounds like consumptive spending of tax dollars to me. Most industries don't need a lot of help with capital spending. The average industry spends less than 4% of the cost of a product on capital. Their real problem is with labor. To give industry a boost, the real economic development strategy should be to find a way to keep the cost of living lower than competing states. This can only be done with efficient taxation coupled to a good education system that also does not operate inefficiently. Taxing to get economic development is nothing but a treadmill running on tax money. The only jobs that they really produce are down at the Chamber of Commerce and at the state Department of Economic and Community Development