Tax breaks OK’d for two Nashville companies in return for jobs

Wednesday, July 20, 2011 at 1:34pm

In exchange for local job creation, the Metro Council voted Tuesday night to give two Nashville companies tax abatements.

In separate votes, on third and final readings, the council unanimously approved special payment-in-lieu-of-tax, or PILOT, deals to Carlex Glass America and Standard Candy Co. Both deals, which involved Mayor Karl Dean’s Office of Economic and Community Development, were approved after no deliberation.

Carlex’s PILOT deal comes as the company, a subsidiary of a Japanese auto-glass maker, plans to make capital investments totaling $80 million over the next two years. Carlex, which formerly operated in Detroit, recently purchased the long-running Ford Auto Glass Plant in West Nashville to launch its headquarters there. (The company had earlier said it could invest up to $100 million.)

With the investments, the glass plant — located on Centennial Boulevard — has targeted the retention of 400 jobs and the addition of 50 more jobs.

The council’s vote Tuesday authorizes the Industrial Development Board to give Carlex a partial tax abatement for the next six years, according to Metro Council attorney Jon Cooper’s legal analysis. The abatement is estimated to total $2.19 million. 

The council’s vote involving Standard Candy Co. — which produces the famous GooGoo Cluster — gives the company a 100 percent tax abatement for one year and a 50 percent tax abatement for another four years.

The abatement applies to both real property and the capital investment of personal property, machinery and equipment associated with expansion, according to Cooper’s analysis. Estimated tax savings for the company are to total $300,000.

The council’s vote comes after Standard Candy Co., which operates from Massman Drive in Nashville, engineered a 15,000-square-foot expansion in 2009, resulting in an additional 237 jobs in the Nashville area.

Approval of the financial incentives Tuesday followed news that New York-based IQT will no longer pursue relocating to Nashville. Metro had earlier provided $1.61 million in financial incentives to help lure the company here. With the relocation nixed, Metro is no longer on the hook to pay the incentives.  

The call company had targeted Nashville as a relocation center, promising to add 900 local jobs. But amid massive layoffs at its Canadian centers, Dean’s administration has said it appears “unlikely” the company would move forward with its Nashville operation plans. 

8 Comments on this post:

By: gdiafante on 7/21/11 at 6:12

That's the sad reality in the Bush Tax Cut era...if you want job creators, you better be prepared to give them a free ride.

By: conservarage on 7/21/11 at 6:33

oh sure, invoke the name of bush for something a city government, headed by a democrat does. makes perfect sense.

By: gdiafante on 7/21/11 at 6:41

It's the philosophy, nimrod. The only way to spur jobs is to eliminate taxes for businesses. It started at the federal level and has now saturated all levels of government.

By: Radix on 7/21/11 at 7:22

Pretty shortsighted Keynesian response from gdiafante. Let me bring you up to speed on why this is good, and Bush knew far more about the economy than you do.

1 - Its partial.
2 - Its temporary.
3 - It brings jobs.
4 - Jobs pay money.
5 - Money gets spent.
6 - Spent money grows the economy.
7 - Spent money is taxed.
8 - Tax revenues go up.

gdiafante, like so many don't get this, they want to kill the golden goose and throw a wet blanket on the economy by taxing it to death. They don't mean to, they can't help it because they somehow think government is the driving force in our economy.

By: frodo on 7/21/11 at 7:29

Thank you Radix for a dose of sanity. It is just a shame it takes such incentives at all. If businesses today were not burdened by a hostile federal regulatory environment and the fear of further redistribution of dwindling wealth, then they would have the courage to expand on their own. Let's just hope they can make ends meet in the anti-business days ahead.

By: gdiafante on 7/21/11 at 7:31

It transfers the tax burden to the employee. And what you think is "temporary" will be extended, as usual, when the company then threatens to either eliminate jobs or relocate to an area that offers a better deal. It's really extortion and it's becoming the norm in this country.

And the economy is hardly "taxed to death". Stop drinking the kool-aid.

By: pswindle on 7/21/11 at 10:13

The consumer will pay the difference. The one to benefit is the company that will relocate to the great state of TN. No wonder we do not have any money, we are giving it all away. Is this what is called trickle down?

By: Bellecat on 7/21/11 at 8:11

I hate when states, counties, cities, etc. play this tax game with business. The companies are the ones who make out like bandits ,the employees never get great paying jobs, and the residents are short the amount of the tax give aways.

People talk negatively about "entitlements" all the time. I think it is business who feels entitled. Give them what they demand or they will go home and not play. Enough is enough.