A conversation with. Matthew Kisber, Commissioner, Tennessee Department of Economic and Community Development
"Companies are looking at Tennessee because our state can give them incomparable access to foreign and domestic markets. We're at the hub of seven major interstates and 75 percent of the U.S. population is accessible by ground within 24 hours."
A. During this past session of the Tennessee legislature, we gained a number of new tools and significant amounts of funding to implement industry-specific incentives. We have seen projects in the automotive and corporate headquarters sector, aligning closely with Governor Phil Bredesen's strategy of creating higher skilled, better paying jobs in Tennessee.
Governor Bredesen worked with members of the General Assembly to create regional "megasite" authorities, designed to allow communities to work together to create and market large, "shovel-ready" industrial sites of over 1,000 acres. Counties and cities can take advantage of the cost-sharing benefits and a regional approach to governance to help fund the creation of infrastructure such as roads and utility access.
New incentives have helped to add to our list of corporate headquarters like International Paper, Nissan N.A., and ServiceMaster. This tiered relocation incentive tax credit gives corporate headquarters the ability to help defray some relocation costs. The quantified multiplier effect results in a return on these investments very quickly. Nissan, for example, was the subject of an economic impact study showing that for every $1.00 of incentives offered by the state and local governments on a one-time basis, $2.50 in new personal income was generated each year along with an indirect jobs multiplier of 10 to one. As a result of the state's multifaceted approach, we can aggressively pursue automotive, chemical, and manufacturing companies, corporate headquarters, distribution, logistics, and back office firms.
Other incentives include the Rural Economic Distress Jobs Tax Credit, based on unemployment and income levels of the county. This new incentive gives the state broad leeway to extend tax credits for jobs created in counties with low job growth and high unemployment.
We've retailored our incentives for new companies and existing industry, expanding the industrial machinery tax credit so firms can receive tax credits based on capital investment, even if new jobs aren't created. We restructured our FastTrack job training program for easier access and simpler cost reimbursement for companies training newly hired employees.
Q. What are your most active industries?
A. Our state is based on regional economies: Memphis has had remarkable success recruiting medical device firms, bio-science companies, distribution centers, and corporate headquarters; Nashville has succeeded with corporate headquarters, technology companies, and healthcare; the East Tennessee and the Chattanooga area for call centers, manufacturing, steel, metals, and energy turbines. In the Tri-Cities area, East Tennessee State [has a] medical school and has just added a pharmacy school. They are trying to develop a niche of rural healthcare and pharmacology innovation to medical discovery.
Q. When companies explore Tennessee, what amenities are they seeking?
A. Companies are looking at Tennessee because our state can give them incomparable access to foreign and domestic markets. We're at the hub of seven major interstates and 75 percent of the U.S. population is accessible by ground within 24 hours. We also have the world's busiest cargo airport in Memphis and our proximity to hubs for FedEx and UPS are important for companies with time-sensitive delivery windows.
In healthcare, Nashville is home to 40 percent of the investor-owned hospitals in the U.S. Medical research is a strong and growing presence, and Oak Ridge has just been named a national bio-fuels research center by the U.S. Department of Energy. We're producing vehicles with three auto assembly plants and more than 900 supplier firms, as well as the next generation of fuels to power them. We have the right location and the right skills in Tennessee.
Q. What about foreign direct investment and exports?
A. In foreign investment, Japanese firms have made Tennessee a major investment center with 162 Japanese companies and more than $10 billion in capital investment. In addition, 72 Canadian companies and 350 European companies call Tennessee home. We're opening a foreign trade office in Beijing and Governor Bredesen is leading a trade mission to China later this year. The U.S.-China Business Council calls Tennessee the United States' fastest-growing Chinese exporter, rising from $200 million to $1.8 billion in the last five years. We've always had strong sales of agricultural products, but we're seeing growth in transportation, industrial machinery, medical devices, and chemicals.