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Location Notebook: Tennessee - Focusing on Rural Development

Realizing the need to stimulate growth in rural areas, state legislators, educators, and other stakeholders came together to pass legislation, certify sites, and increase broadband access among other measures aimed at attracting business and tourism.

Q1 2018
The Main Street and Tennessee Downtowns programs have devoted funding to encourage the revitalization of historic commercial downtown districts in rural Tennessee communities.
The Main Street and Tennessee Downtowns programs have devoted funding to encourage the revitalization of historic commercial downtown districts in rural Tennessee communities.
Everyone loves to spread good news. On the other hand, it takes some mettle to acknowledge news that’s not so good, then figure out what to do about it.

That’s the situation Tennessee economic development leaders faced a few years ago. The good news highlighted a long list of success stories that were generating tens of thousands of jobs. “We had all kinds of great accolades,” says Amy New, assistant commissioner for Community and Rural Development with the Tennessee Department of Economic and Community Development (TNECD). The bad news came in the form of a report from the Appalachian Regional Commission, indicating that 21 of Tennessee’s 95 counties were classified as distressed or in the bottom 10 percent of the counties across the country. Thirty-five more counties were at risk of qualifying for that classification.

“It was a wake-up call,” New says. Yes, there was a lot of good news out there, but most of the positive headlines were steering clear of rural areas. Former TNECD Commissioner Randy Boyd decided the state needed “to double-down on these areas,” New said. What followed was a restructuring of TNECD that included creation of New’s position focusing on rural development.

Passing Legislation and Certifying Sites
Action was dramatic and swift. Listening sessions across the state brought together local officials, legislators, educators, and others with an interest in rural development. A new Rural Task Force sparked the collaboration of multiple agencies at the state, regional, and federal level. “We did a complete inventory of all of the state’s programs, monetary and technical assistance, where there were overlaps and where there were gaps,” New says.

Then came the state’s Rural Economic Opportunity Act, which she says sailed through the legislature in 2016 with virtually unanimous bipartisan support. Among other things, it allowed funding for various rural-focused grants and adjusted the job tax credit structure to allow benefits for smaller projects targeting rural sites. The Tennessee Broadband Accessibility Act passed the following year. Grant funding flowed in to support tourism; there were new efforts to boost rural retail development; and, perhaps most prominent, the state used site development grants to create attractive development locations in rural areas.

Before the site development push, a lot of rural areas simply could not compete for economic development projects. “We couldn’t bring in a company because they didn’t have a site,” New says. “Now we are making sure that we have more product on the shelf.”

Manufacturing Firms Investing in Rural Tennessee

A collaborative effort by state and local legislators, educators, and others aimed at attracting business to rural areas has resulted in major investment and job creation.
  1. Tyson Foods

    Humboldt, TN

    Tyson Foods’ $300 million commitment in Humboldt, in an existing industrial park, promises to create more than 1,500 jobs.

  2. Williams Sausage

    Union City, TN

    Williams Sausage pledged 226 jobs in a Union City expansion worth $37 million, which is on a certified site.

  3. Nokian Tyres

    Dayton, TN

    Nokian Tyres picked a site in Dayton for its $360 million, 400-job tire manufacturing plant, citing the area’s “skilled workforce availability, logistical advantages, and a business-friendly administration.”

  4. Textile Corp. of America

    Bledsoe County, TN

    Textile Corp. of America announced a $27 million headquarters and manufacturing facility investment that will create 1,000 jobs in Pikeville, representing the biggest private investment ever in Bledsoe County.

  5. Hörmann LLC

    Sparta, TN

    In Sparta, White County, 200 manufacturing-related jobs will result from a $64 million expenditure promised by Hörmann LLC, a German company that makes building entry systems.

Between 2016 and 2018, state economic development officials awarded 58 site development grants totaling approximately $21.6 million across Tennessee, with the goal of improving industrial capacity in rural Tennessee. Meanwhile, more than 50 sites have been certified through the Select Tennessee Certified Sites program, and nearly a dozen companies have chosen sites from that list. Some $1.36 billion in private capital has been committed to certified sites since 2013, with job commitments of nearly 5,600.

One such project was Tyson Foods’ $300 million commitment in Humboldt, which promises to create more than 1,500 jobs. Doug Ramsey, Tyson’s group president of poultry, made the announcement last November. “The location is attractive to us because of the strong support we’ve received from state and local leaders, the existing industrial park, and availability of labor, as well as access to feed grains produced in the region.” Meanwhile, Williams Sausage pledged 226 jobs in a Union City expansion worth $37 million, again on a certified site.
White County, TN
TNECD’s Tourism Enhancement Grants have provided more than $2 million to local communities, helping them develop tourism attractions to drive local spending and economic activity.
Recent Successes
The state’s statistics indicate just how hard leaders have been working on rural development. According to New, more than 45 percent of the job commitments made in state-incentivized projects were in rural areas last year. It wasn’t that long ago that the number was under 30 percent. Here are a few more examples from the past year:
  • Nokian Tyres picked a site in Dayton for its $360 million, 400-job tire manufacturing plant. In making the announcement last May, company leaders cited the area’s “skilled workforce availability, logistical advantages, and a business-friendly administration.”
  • Textile Corp. of America announced a $27 million headquarters and manufacturing facility investment that will create 1,000 jobs in Pikeville. It’s the biggest private investment ever in Bledsoe County. Owner Ed Cagle was part of the announcement in July: “Millions of dollars of investment and the creation of a thousand jobs will be transformative to this county and region.”
  • And in Sparta, 200 manufacturing-related jobs will result from a $64 million expenditure promised by Hörmann LLC. The German company makes building entry systems, and in his October announcement the company’s president, Camron Rudd, said, “I am convinced that White County and the Upper Cumberland is the best place for Hörmann LLC to be.”
Carter County, TN
TNECD’s Tourism Enhancement Grant program acknowledges that not all rural communities are prime locations for industrial facilities. The program promotes a variety of local tourism programs in rural Tennessee communities.
Tourism and Retail Growth Too
But Tennessee’s rural focus is more than just bringing traditional economic development successes to less urban areas. It’s also a recognition that valuable dollars flow from tourism as well as retail growth. It’s an acknowledgement that some communities may not be a great fit for manufacturing, but have excellent tourism assets or an attractive downtown that just need a little boost.

Since 2016, state economic development officials have provided more than $2 million in tourism grants that have supported 58 projects. Meanwhile, the Main Street and Tennessee Downtowns programs are revitalizing retail districts, with grants that are approaching $1 million so far.

“In broadband, we have made a huge dent,” New continues. A 2016 study found that 13 percent of Tennessee residents, and 34 percent in rural areas, did not have access to broadband connections, so the Broadband Accessibility Act passed the next year. The legislation deregulated the broadband landscape to give providers more opportunities and provided funding to cover capital costs to build out broadband in unserved areas. New says the initial investment went quickly, and more dollars have been added.

The bottom line of the rural focus is the recognition that big economic development headlines are nice, but they’re not everything. It doesn’t take a big splash to make a big difference in rural areas, New observes. “Five jobs here may be the same as a hundred in Nashville or Chattanooga or Memphis.”
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