Business and Economy NewsTracker

Norris Tweets Dig at Dems on Solyndra Setback

Everything under the sun seems to be open to squabbles over jobs between Republicans and Democrats in the Tennessee Legislature. Now it’s solar panels.

Senate Majority Leader Mark Norris tweeted Tuesday night, “Solyndra’s shadow as Dems plan to tour Bredesen’s solar farm.” Norris linked to a recent Nashville Business Journal article noting that solar businesses either seem to be starting up or fading away.

Solyndra, based in Fremont, Calif., specializes in rooftop solar power systems. The company received a loan of $535 million in 2009 as part of the federal stimulus package and has been lauded by the Obama administration as an example of the nation’s energy future.

But the company has shut down, laid off hundreds of workers and filed for Chapter 11 bankruptcy protection. The company also faces a federal investigation. The House Energy and Commerce oversight committee is scheduled to begin hearings on Solyndra on Wednesday, but Solyndra executives have postponed their appearance, citing the bankruptcy proceedings. A column posted Tuesday night on Politico called the Solyndra venture “corporate favoritism” and “Chicago-style deal-making.”

Norris picked up on the Solyndra news as a further dig at Democrats, who plan to make the West Tennessee Solar Farm with Haywood County Mayor Franklin Smith part of their jobs tour Sept. 19-24.

The Solar Farm is on the first day of the Democrats’ tour, right after a tour of the vacant West Tennessee megasite. The solar farm, near Interstate 40, is part of the Volunteer State Solar Initiative of former Gov. Phil Bredesen.

Norris responded to the Democrats’ jobs tour announcement early this month by calling it the “Obama Apology Tour.”

But in February, Republican Gov. Bill Haslam expressed his pleasure that the U.S. Department of Energy had cleared the path for the solar farm, citing Tennessee’s commitment to a clean energy future.

“It’s a tangible demonstration that jobs and investment in this fast-growing sector of our economy are welcome in Tennessee,” Haslam said in a formal statement at the time.

In the same announcement, Economic and Community Development Commissioner Bill Hagerty said, “We’ve seen billions of dollars in capital investment in the solar industry alone in Tennessee. Coupled with the investments we’re seeing in energy efficiency, sustainable transportation and other forms of clean energy, the clean energy sector has the potential to truly become a bright spot for Tennessee in terms of job growth.”

Haslam and U.S. Sen. Lamar Alexander recently visited another Bredesen-linked project, the ethanol-from-switchgrass process in Vonore, Tenn., after which both the governor and the senator expressed support for the business but limited interest in subsidies for it.

Business and Economy News

Southerland Holding Out Hope for NE TN Megasite

State Sen. Steve Southerland sounds enthusiastic about the possibility of Upper East Tennessee landing a TVA megasite like the ones taxpayers provided for Volkswagen and Hemlock Semiconductor.

But the Morristown Republican’s enthusiasm may be more a matter of a legislator cheerleading than an indication of any substantive action. Other officials, including some community leaders in the region itself, say they see no hint of a megasite headed to the area, for a variety of reasons.

State Economic and Community Development Commissioner Bill Hagerty said recently he had heard the subject come up in regard to Upper East Tennessee, but he downplayed the potential.

“In terms of a new large-scale megasite like West Tennessee, I think there is a lot of optimism we might be able to do that in other parts of the state, but there is nothing along that magnitude on the drawing board right now,” Hagerty said.

Alan Palmieri, mayor of Jefferson County, said he has heard the subject raised for his region — but only “for years and years and years.” Mayor Bill Brittain of Hamblen County, which includes Morristown, said this week he has not heard the matter come up.

But in talking to a reporter at a recent event in Morristown, Southerland made it sound like efforts are underway for landing a megasite.

“We’ve got sites in the area that could be a megasite,” Southerland said. “It has a good possibility, because our counties are working together. We know it has to be a joint, regional project.

“We approved three megasites. We’ve got one in West Tennessee, Middle Tennessee and then one in Chattanooga. But we have not received one for Upper East Tennessee. It’s our turn. We spent the money down there. If the people are willing to work together up here and we have somebody wanting to come this way we’re going to go for it.”

Megasites have been noteworthy for several reasons recently. Tennesseans have begun to see the fruits of preparing large tracts of land and infrastructure, with Volkswagen opening its manufacturing plant in Chattanooga and Hemlock making an impact in Montgomery County, including ties with Austin Peay State University.

A third megasite, in Haywood County in West Tennessee, has begun to get more attention from government officials, but it remains vacant.

Gov. Bill Haslam has taken some of the glimmer off the headline-grabbing practice of attracting large businesses to the state, pointing out that most of the job growth comes from existing businesses, not high-profile relocations.

Nevertheless, Haslam has repeatedly said that doesn’t mean the state has abandoned the big relocation approach. At an economic development meeting in Morristown, Haslam said the administration is still ready “to move heaven and earth” to get such investments.

Southerland picked up on that line.

“Just like he said, we’d move heaven and earth to get another Volkswagen here,” Southerland said. “When you look at Hamblen County, we’re like a hub for other counties bringing in automotive jobs.”

Taxpayer bill can reach hundreds of millions of dollars

State and local taxpayers typically can end up contributing hundreds of millions of dollars to the development of a megasite.

In the case of the Enterprise South industrial site that attracted Volkswagen to Hamilton County, the government’s bill, including tax breaks, was estimated in one report at $500 million. Volkswagen made an investment of $1 billion, roughly the amount Hemlock put into the megasite in Montgomery County.

Arrangements for the sites can involve help from federal, state and local governments. After that, the value of the investment is widely open to debate. Economic development officials routinely have said the kinds of businesses attracted by the megasites are giant winners for the locations. But increasingly, questions exist as to the return on the investment in attracting jobs, as states have become highly competitive.

Haslam has expressed surprise at what some companies want in return for creating jobs in Tennessee, although he has said his administration remains interested in attracting the types of investments made by Volkswagen and Hemlock.

“In this state, the funding for the megasites has been a combination of local government money and state government money, with some participation from TVA funding the certification process,” said Clint Brewer, spokesman for the Department of Economic and Community Development.

In Montgomery and Hamilton counties local governments handled the purchase of the land. For the Haywood County megasite, where local governments lack such resources, the state has purchased most of the land. Theoretically, private entities could have to assemble the property at a megasite.

“The local communities pay for the site’s due diligence and improvement, such as environmental reviews, infrastructure improvements, etc.,” said Mike Bradley, of the TVA news bureau in Knoxville, by e-mail Thursday. “This sometimes is done even after the site has been certified as a megasite. The effort is usually championed by a local economic developer.”

The Tennessee General Assembly this year passed legislation (SB1239) to allow the East Tennessee Regional Agribusiness Marketing Authority, or ETRAMA, to issue bonds.

The idea of economic development in the region is to enhance development along the I-81 corridor.

Two issues face the region on infrastructure for business development: hooking up a sewer system to accommodate large capacity and getting connectors in place for major rail lines in the region. Plans for the sewer line would involve trunk lines that would feed wastewater into a plant in Lowland, which is in Hamblen County.

The vacant megasite in Haywood County has 1,720 acres. Another vacant TVA megasite in Hopkinsville, Ky., has 2,100 acres. Those kinds of numbers may work against mountainous Upper East Tennessee.

“I was told years ago because of our geography it’s hard to collect 500 flat acres,” said Rep. Tony Shipley, R-Kingsport. “Maybe we don’t get a megasite. Maybe we get a mega-area.

“The same amount of money is being spent in Chattanooga, West Tennessee and the Nashville basin area. Maybe that same amount of money could come here, because we are distinctly different.”

Palmieri, the Jefferson County mayor, makes a similar observation.

“You look at the land, and you say, ‘Where are you going to locate this?’ Terrain would be part of the process because whatever you do, you’ve got to make it economically feasible. If you’re going to have to go in and take down mountains and blast and everything else, it’s going to add to the cost, which everybody wants to avoid.”

In another way, however, geography is a plus for the region. State and local government officials point to the fact the region is within driving distance of a large portion of the nation’s population.

Like Disney World theme park, talk of megasite ‘just conversation’

Palmieri has heard talk of a megasite but sees little in the way of real progress.

“I know various mayors have talked about it for many years. Various chambers (of commerce) have talked about it. Nothing has really developed outside the fact it’s just conversation,” he said.

“Where would you go? Who’s going to bring in something that massive today? It’s probably been put on the back burner, but it’s been going on for I guess probably the last 10-12 years.”

Southerland sees other factors.

“We know with the earthquake in Japan and the value of the U.S. dollar that Japan will be looking more at investing in the United States in automotive plants. And we’re hoping to get one of whatever comes this way,” Southerland said. “You’ve got to be prepared because when they come they’re going to be looking for somebody that’s already ready to go.”

Palmieri said that for years there was talk that the people from Disney World were going to put a theme park in Cocke County.

“I heard that for 20 years,” he said. “That was a hot one there for awhile. It was going to be just a regular theme park, like a Disneyland or Dollywood. That was before Dolly owned Dollywood.”

But if the region were to get a large plant, Palmieri says the automotive or airline industries would make good sense. He said the area’s workforce, which has experience in production lines, would be good for a manufacturing base.

When asked why the airline industry would be a good fit, Palmieri said, “Everything they have is predominantly in a high-tax area. What they’re having to pay the workforce there is probably three or four times what they could have to pay a workforce here in Jefferson County or East Tennessee.

“Transportation-wise, with the Interstate and everything else, easy access in and out, I can see where they could save a lot of money, and it’d be much more profitable for their company.”

Aircraft maker Boeing has recently been involved in a dispute with the National Labor Relations Board over a plant it plans to build in South Carolina. Palmieri said Tennessee should get a look.

“If Boeing ever took a serious look, they could come in, acquire property and build buildings and have a workforce ready to go, and they would save money almost right off the bat,” he said. “South Carolina is more expensive. They have payroll taxes and everything else. I don’t understand that.

“I have family there. It’s a beautiful state. I can’t stand Steve Spurrier (the South Carolina football coach). But why would you go to South Carolina when Interstate access, transportation needs, centralization, taxes, everything is so much better right here in East Tennessee? I don’t understand that.”

Business and Economy Education

SCORE Conference Accents Connection Between Education, Economic Growth

They held an education summit in Nashville on Tuesday and Wednesday, and it turned into a jobs summit.

And that’s pretty much what organizers of the event had in mind all along.

The State Collaborative on Reforming Education, the organization founded by former Sen. Bill Frist, hosted the Southeast Regional Rural Education Summit at Lipscomb University, pulling together various interests in education — from the classroom to the philanthropic realm. It was notable for its emphasis on rural areas, where issues ranging from education to unemployment can be difficult and complex

But it was clear the event was not simply about educating kids in rural communities. It was about preparing them for the workforce and, in turn, boosting the economy in those rural areas.

“It’s making real this close connection between education and jobs,” said Jamie Woodson, the former state senator and president of SCORE.

“They’re so interrelated. It’s not just something we talk about theoretically. It really is a matter of economic viability for these communities around our state and the families that support those communities.”

To drive home that point, the event had a high-powered panel discussion Tuesday morning that included Kevin Huffman, the state’s commissioner of education, and Bill Hagerty, the state’s commissioner of economic and community development, along with Frist and Woodson. Huffman said the jobs of the future will be different from jobs in the past. Hagerty said the connection between jobs and education is very tight.

But the same angle was evident in a morning panel discussion Wednesday. Joe Barker, executive director of the Southwest Tennessee Development District, drove home the point of workforce development and in the process referred to a megasite in West Tennessee aimed at economic development.

Barker also referred to the REDI College Access Program. REDI stands for Regional Economic Development Initiative.

“The key part of this is to recognize we’re an economic development organization. We’re not an educational entity,” Barker said.

“We got involved in the College Access Program purely from an economic development sense.”

He spelled out some details of the large tract of land set aside as the Haywood County Megasite.

“It is a large, potentially very attractive industrial site for heavy manufacturing. It is the only certified megasite left in the state of Tennessee,” Barker said.

“Leaders came together to talk about what we could do as a region to enhance attracting jobs to that megasite, and at the end of the day it all went back to the quality of our workforce and our educational attainment levels.”

John Morgan, chancellor of the Tennessee Board of Regents, the largest higher education organization in the state, zeroed in on the high number of students who require some type of remedial education when they enter the state’s colleges. He focused on the community colleges in the Board of Regents system since they will be the institutions dealing most with remedial education.

“Roughly four out of five freshmen who come to our community colleges require some kind of remedial or developmental education,” Morgan said. “Of those, about three out of four will have math deficiencies.

“That’s kind of the big problem. But even when you look at reading, about one-third end up in developmental or remedial reading courses, and about half end up in writing courses. That’s troubling.”

Morgan pointed to the state’s Complete College Act, which is geared toward moving students more seamlessly toward college degrees.

“In an environment where completion is now the agenda, where our schools are incented in a very strong way through our outcome-based formula to focus on completion, obviously that represents a substantial challenge,” Morgan said.

Morgan said no matter how well Tennessee handles remedial education, real success will come only when students arrive at college prepared to learn.

“We can cry about that. We can whine about the lack of preparation if we choose to,” Morgan said. “But that’s not going to help us hit our numbers. It’s not going to help us achieve our outcomes.

“So what we have to do is figure out how we at our institutions can work with our high schools, with our middle schools, with our communities to lead to better success for students as they come to us.”

Morgan said there will always be a need for remedial and developmental courses for adult learners, pointing out that if he were to go back to college he would probably “test in” to needing some kind of help.

But the summit was still somewhat out of the ordinary for its focus on rural communities.

“There is a great deal of focus and data related to urban turnaround strategies,” Woodson said. “But we wanted to look at rural communities — and a third of Tennessee students are in schools in rural communities — which is particularly important. So we thought it would be smart and productive to focus on that.”

David Mansouri, director of advocacy and communications for SCORE, echoed that desire.

“A lot of the education reform going on nationally is focused on urban areas,” he said. “In talking to folks and learning from people across the state, there was a real need, not only convening about rural education but to talk about best practices, then bring folks together to replicate those practices.”

Woodson said the idea for the rural summit came from listening tours SCORE has conducted across the state, adding that those efforts will continue.

“This really resulted from those conversations,” she said.

Business and Economy News

Volkswagen Opens Chattanooga Plant

Volkswagen formally unveiled its automotive manufacturing plant Tuesday in Chattanooga. Company officials say the facility, built on one of the state’s taxpayer-financed economic development megasites, will boost its efforts to make a major impact on the national automotive market.

“The Chattanooga plant really does represent a very significant commitment toward our overall U.S. product strategy,” Jonathan Browning, president and CEO of Volkswagen Group of America Inc., told a huge room of people at an elaborate press conference at the plant. “This is a strategy we’ve talked about for some time. It’s a strategy that represents an investment of $4 billion into the U.S. market. It’s a key driver of our long-term success in the United States.”

Volkswagen is building the Passat, a midsize sedan, at the Chattanooga plant. Company officials said the car will get 43 miles per gallon on the highway and can provide nearly 800 miles on a single tank of gas. While Tuesday marked the grand opening, the plant has already assembled test cars and customer cars, and the first customer car rolled off the assembly line April 18.

Dignitaries at Tuesday’s event included Gov. Bill Haslam as well as the German ambassador to the United States, Klaus Scharioth. The plant currently has 1,700 workers and will have more than 2,000 employees when fully staffed, Frank Fischer, head of the Chattanooga plant, said.

The plant has been presented as a prime example of how the state can attract businesses with a huge capacity for hiring. Bill Hagerty, commissioner of the state Department of Economic and Community Development, said Tuesday he will travel next month to Germany to talk to Volkswagen officials and will visit other car manufacturers there for further recruitment.

Hagerty said recent reports that the State of Tennessee, under Haslam, will emphasize expansion of existing businesses rather than seeking to attract big businesses like Volkswagen, were somewhat misleading.

“It’s not a ‘rather than.’ It’s ‘in addition to,'” Hagerty said. “We actually are beefing up the department that does these large sort of home-run activities. We’ve still got four overseas offices.

“We are adding more resources at the local level on focusing on existing businesses, so it’s a resource addition on the recruitment side of our department altogether.”

When Fischer said Volkswagen hopes to expand its number of suppliers to the plant, Hagerty noticeably applauded.

Haslam was quick to give credit to former Gov. Phil Bredesen and Bredesen’s team of business recruiters for their work landing the Volkswagen plant that held its grand opening in Chattanooga on Tuesday.

“I must confess to you, I feel a little bit like someone who got to jump in and run the last mile of the marathon after other people had run the first 25,” Haslam said.

“I can’t help but acknowledge the contribution of my predecessor, Governor Bredesen, and his team who worked hard to make certain this happened.”

Haslam also gave credit to leaders in Chattanooga and Hamilton County for their work in attracting the German automaker to Tennessee. Deputy Gov. Claude Ramsey attended Tuesday’s opening and kept a low profile, but he was Hamilton County mayor before joining Haslam’s administration.

“Good things like this don’t just happen,” Haslam said. “You have to have people willing to stick out their necks and make the investment as local government both in buying the site and preparing it, and then the state to come in with additional infrastructure with the interchange back to the interstate.

“I get to be the lucky person who gets the baton at the last minute and runs across the finish line, but I do that in full knowledge that other people worked really, really hard to get us to this day.”

The Volkswagen plant represents a $1 billion investment by the company, and the plant sits on one of the state’s three megasites geared toward economic development.

Only a day before, Haslam presided over the first meeting of the West Tennessee megasite board, which hopes to attract a large business to a site in Haywood County. The state’s other megasite is in Montgomery County, where Hemlock Semiconductor operates a solar plant, another $1 billion investment that has already led to further expansion.

State and local taxpayers have contributed hundreds of millions of dollars in incentives toward luring Volkswagen to Tennessee, with one estimate in 2008 putting the figure above $500 million. The land at the Enterprise South site in Chattanooga was purchased for a reported $81 million, and a reported $43 million went for connections to highways and roads.

Volkswagen has a presence at 30 locations across the United States.

Browning said the Passat will play a major role for the company.

“The Passat produced here in Chattanooga will be a key enabler of our growth and will allow us to compete very much in the core of the midsize sedan segment here in the U.S., the largest single car segment in the U.S.,” Browning said.

“You could say the future for Volkswagen begins here in Chattanooga.”

The Passat is expected to be one of two high-volume vehicles the company makes in this country, the other being the Jetta.

The plant’s opening comes after Volkswagen announced in July 2008 that it was choosing Chattanooga from nearly 400 potential sites, with the aim of making 150,000 midsize sedans each year.

Construction of the plant began in February 2009. The first robots for making cars were in place by February 2010. The company is emphasizing attention to having an environmentally friendly plant. Among the techniques toward that end is collecting rainwater from the roof for use inside the plant cooling welding guns. Fischer said the plant will use 35 percent less energy than a standard automotive plant.

Much was made Tuesday of promises being kept, both by Volkswagen and by state and local governments. Much was also made of the potential for attracting suppliers for the plant, which can greatly enhance the economic impact of the facility.

“If you talk to their management team, to a person, they say Tennessee has delivered on what they said they would. Of course, we feel the same way,” Haslam said. “They said they would have a $1 billion plant and have it open in three years, and they did it.”

Haslam said his two daughters, Leigh and Annie, as well as daughter-in-law Hannah, have Volkswagens. When asked why there are so many Volkswagens in the family, Haslam said simply, “It’s what my daughters wanted.”

Browning said one of the things that stood out to Volkswagen officials has been the enthusiasm and attitude of the local people, whether they were public officials or residents. He explained that last September when Volkswagen was launching a new Jetta and had 650-700 Jettas in Atlanta for a dealers’ meeting, the company wanted the dealers to see the Chattanooga plant. Dealers drove the Jettas from Atlanta to Chattanooga. A local radio station picked up on it, and it led to a reaction.

“Spontaneously, local residents came out, standing on bridges on overpasses over the highway with ‘Welcome Volkswagen’ signs, showing a true sense of enthusiasm about Volkswagen coming to the local area,” Browning said. “That’s a perfect example, not just from the official level but also the individual level. The community is very enthusiastic about Volkswagen coming to the area.”

Ramsey said the plant is a success story.

“It just tells me the right things are happening,” Ramsey said. “It can happen again. It just takes time and patience.

“It means the future is very bright here.”

Business and Economy Environment and Natural Resources Featured Tax and Budget Transparency and Elections

Political Movement on Megasite

Gov. Bill Haslam presided over the first meeting of the governing body of the Haywood County megasite Monday in Jackson, but it was Deputy Gov. Claude Ramsey who offered the most pointed advice to the new board.

He spoke from experience.

“You will have a lot of highs and lows,” said Ramsey, who was Hamilton County mayor as Chattanooga pursued the Volkswagen plant that ultimately brought a $1 billion investment to the megasite there.

“This is a very patient process that a lot of people will be impatient about. It’s hard work. There will be times people will say that nothing is happening. I’ve been called a lot of funny names. There will be those days when it’s a little bit slow.”

But the message was perseverance, and Ramsey encouraged West Tennessee leaders to weather the down times as the site seeks a client like Volkswagen or Hemlock Semiconductor, which made its own $1 billion investment at a megasite in Montgomery County and has already announced a substantial additional investment there.

After the meeting, Ramsey visited the Haywood County site, accompanied by Rep. Jimmy Eldridge, R-Jackson, and Rep. Curtis Halford, R-Dyer, as well as other officials working on the project. The group included Haywood County Mayor Franklin Smith, whom the board elected chairman at its meeting on Monday. Haslam did not visit the site Monday but has been to the location on more than one occasion.

Haywood County is the last of the state’s three TVA megasites, designed to attract major business relocations, an issue that not only plays a role in the state’s economic future but has become a political football in its own right.

Haslam recently announced that the state will move away from the emphasis on attracting huge business re-locations and concentrate on feeding the growth of existing businesses in the state. But Haslam told board members Monday that the significance of the West Tennessee site has not diminished.

“I can assure you there are few things we care as much about as the proper development of the megasite,” Haslam told the group at a conference room at the McKeller-Sipes Airport in Jackson.

“I said back when I was campaigning, and I’ll say it again now, I think it is one of the best assets we have for the state when we look at economic development. We do not have a lot of pieces of property like this that are available.”

The site sits near Stanton, north of exit 42 on Interstate 40. At this point, the project remains only a conceptual plan. The site was originally certified to meet the potential needs of an automotive manufacturer. There is no indication that an auto maker will move into the site, but state officials hope a business will locate there that can attract numerous suppliers, as an automotive manufacturer would.

“We’re not pinning all of our hopes for job development on the megasite. We have some prospects right now in this part of the state we’re working hard to hopefully bring here,” Haslam said after the meeting. “But this is a great long-term project.”

Board members were briefed on where progress on the site stands now. It is in a vastly rural area, which creates challenges for infrastructure. Authorities told the board Monday the location would need 3 million gallons of water a day and that three wells are being dug into the Memphis aquifer to meet that need. Each well would draw 1.5 million gallons, and the board was given assurances Monday the amount of water would be adequate to meet the need. Waste water services will also be necessary.

The site will need a water treatment system, which will be on the property, and Highway 222, which runs through the middle of the site, will need to be re-routed. The board was told that while no specific funds were put into the budget just passed by the Legislature that flexibility is in place to make funding available if a client is found for the site. The state already has $34.7 million set aside in the Department of Economic Development for use on the Haywood County project.

The site includes 3,800 acres, with the core site comprised of 1,700 acres.

Democrats had criticized Haslam and other Republicans during the legislative session that ended Saturday for not putting more funds into the megasite at a time when the state is desperate for jobs. Several lawmakers from West Tennessee, including Democrats from the House and Senate, attended the meeting Monday in Jackson. But there seemed to be agreement and optimism among lawmakers from both parties that the project is on the right track.

Nevertheless, it still figures to be at least two years before a big business could be up and running at the site, the board was told Monday.

Rep. Craig Fitzhugh, D-Ripley, the House Democratic leader, Sen. Lowe Finney, D-Jackson, chairman of the Senate Democratic Caucus, and Rep. Johnny Shaw, D-Bolivar, had been critical of Haslam’s lack of attention to the megasite in his budget earlier this year. But all three attended the board meeting Monday and appeared upbeat about the project.

Smith’s selection as chairman was noteworthy in that he has been an integral player in seeking support for the megasite and made a campaign ad for Haslam in last year’s gubernatorial race, although Smith is a Democrat.

“We’ve been patient. I’ve been working on this almost seven years,” Smith said after the board meeting in Jackson. “Patience is something we’ve got.

“What people need to understand is this is a state project. There is statewide support for this project. I want folks to understand this is not a Haywood County project. It will benefit everybody in West Tennessee.”


Haslam Sees More Money For Haywood Co. Megasite, Just Not Yet

In a classic chicken-and-egg debate, Democrats and Republicans on Capitol Hill are at odds over funding for the Haywood County megasite, a large tract of land slated for industrial development meant to attract a large employer to rural, economically depressed West Tennessee.

Democrats are asking where the funding is for the project. Republicans are asking where the project is for the funds.

Democrats brought up the issue in a press conference on Monday that emphasized the importance of job creation, asking why Gov. Bill Haslam didn’t include money for the West Tennessee megasite in his budget proposal.

Haslam expressed his dismay this week that Democrats have taken such an approach.

“I’m kind of disappointed in the partisan nature of the way they handled that,” Haslam said. “We actually sat down and had that discussion with them.

“They understand there is already a lot of money set aside. I’ve said more will follow once we have a plan for how the money that’s already there is used. We’ve had all those conversations in private, and they walked away saying, ‘OK, we understand it, and we agree.'”

The state has put aside $34.7 million as a start for the infrastructure that will be required at the site. But in order to get the site ready for a business, much more money is expected to be needed. One estimate for the total is $65 million.

Democrats included the megasite issue as part of their public show of frustration about how the legislative session has gone, noting a perceived lack of attention to unemployment thus far.

Haslam took exception to the Democrats’ presentation.

“I was disappointed in their tone,” Haslam said. “It was more of a partisan statement than anything else.

“I think the point is this: In Tennessee, we’re out proactively working to bring jobs to Tennessee, and we’re going to continue to do that. We’ll do that by setting the right environment and being aggressive about going out and recruiting businesses.”

Democrats derided the administration’s deployment last week of a roving fleet of three refurbished, stimulus-fueled vehicles known as “career coaches” to match-make Tennessee’s jobless with jobs. Sen. Lowe Finney, D-Jackson, chairman of the Senate Democratic Caucus, referred to the coaches as “RVs.”

Rep. Craig Fitzhugh, D-Ripley, the Democratic leader in the House, said in a formal statement, “They’re telling rural West Tennessee how to apply for jobs, yet the governor didn’t include the West Tennessee megasite in his budget. It doesn’t make sense.”

The megasites have become mega-factors in economic development for the state. Barely any political discussion about the impact of government-enticed jobs in Tennessee is held without mention of the state landing major businesses at two other megasites in recent years.

One is the much celebrated Volkswagen plant in Chattanooga. The other is the Hemlock Semiconductor site in Clarksville. Each was a $1 billion investment by the company, and each was hailed as a major coup for the state in economic development. The idea behind the sites is to have necessary infrastructure in place on the front end, making a site ready for a business looking to locate. The megasites alone do not accomplish the goal. The state offers substantial incentives to attract the businesses.

The enticements can include tax breaks, job training and infrastructure worth hundreds of millions of dollars. Incentives can even extend to job credits for nearby suppliers of the major companies or, in the case of Hemlock, tax credits for customers of the company. The efforts can involve creativity, such as establishing a job training link between Hemlock and Austin Peay State University in Clarksville.

The megasites are viewed as powerful long-term job engines that will sustain smaller businesses involved or peripherally connected with production at the major plant. The success of the two other megasites — one in East Tennessee, the other in Middle Tennessee — has made the lack of a tenant at the Haywood County site stand out all the more.

Haslam officials say they are expecting to bring principal figures together in the next two weeks to address the West Tennessee site.

The Haywood County site is in a rural area, making infrastructure needs especially significant. The site sits just north of Interstate 40 near Exit 42.

While most state officials see the megasite as a golden opportunity, not everyone has been on board with the concept. Residents of the area expressed concerns early in the process about being overwhelmed by the state development.

At the Capitol, sorting through the politics of the issue is not easy. But it is no coincidence and not very surprising that Democrats most interested in the issue — and some who happen to be in leadership positions in their caucus — are from West Tennessee.

Area Democrats have run for office on the job-development potential at the megasite. Haslam did too. In fact, one of the noteworthy events of Haslam’s run for governor last year was the use of Haywood County Mayor Franklin Smith, a Democrat, in a Haslam television ad, saying Haslam used his influence to help protect funds for the megasite.

“I don’t care if he is a Whig or a Mugwump,” Smith said in the campaign spot. He was supporting Haslam.

Haslam and other Republicans would clearly like the site to succeed. Should a major company locate there, it could be a major success story in their stated goal of creating jobs in the state. Haslam has warned, however, that Tennesseans should not expect many “home runs” like the recent megasite successes. He has said the state may need more “singles and doubles.”

The state bought the land for the West Tennessee site for $40 million. The entire site is 3,800 acres, and the core area for activity is 1,780 acres.

“You can’t get anyone in there until you’ve got your infrastructure in place,” House Speaker Emeritus Jimmy Naifeh of Covington said this week. “We figured there would be some $30 million-$35 million in the budget for the megasite this year.”

When Haslam presented his budget in the State of the State address on March 14, there was no funding for the megasite.

Naifeh was going to speak to the Brownsville-Haywood County Chamber of Commerce before the governor’s speech and asked for a meeting with Haslam, thinking there was going to be money in the budget for the site. He talked with Deputy Gov. Claude Ramsey. He learned the State Building Commission hasn’t even had the issue before it to approve use of the $35 million.

“They use different reasons as to why they haven’t,” Naifeh said.

The Building Commission has the power of approval over release of the funds. The commission has seven members — the governor, speaker of the Senate, speaker of the House, commissioner of Finance and Administration, the secretary of state, comptroller and treasurer. Democrats note that the West Tennessee megasite was not on the agenda of the Building Commission released Monday.

“The position the administration has now is that until that gets approved by the Building Commission, why do we need to put some more money in there? Well, the commissioner of F&A is the one that sets the agenda on the Building Commission,” Naifeh said.

Naifeh noted that West Tennessee members of the Legislature supported efforts to establish the megasites in East and Middle Tennessee.

Lt. Gov. Ron Ramsey has said when there is a request put forth for the funds the commission will review it and act, saying he anticipates any money needed will be released “expeditiously.”

Bill Hagerty, Haslam’s commissioner of economic and community development, said Tuesday a lot has to be done before anyone starts building a plant. He prefaced his observation with what has become the standard line among Republicans on the Hill.

“Jobs aren’t created through legislation on Capitol Hill. Jobs are created out here in the economy. That’s where we’re focusing our effort,” Hagerty said. “Second, on the megasite itself, we’ve got $34.7 million in right now for that project. They’re working through engineering studies right now. They can’t start digging until they complete the engineering work.”

House Minority Leader Fitzhugh, who like Naifeh is from near the megasite, pointed to a time element in the issue.

“The longer we wait, the longer it’s going to take for the money to get in the pipeline and have the infrastructure done,” Fitzhugh said, adding that the $65-million estimate is less than some had anticipated.

“Another $30 million-$35 million, we could have this thing ready to go in 12 to 18 months, and we could start employing people.”

Republicans have stuck to their line about government’s role. Haslam has said repeatedly that jobs cannot be legislated. Ramsey has said that government does not create jobs.

“It’s amazing that we watch Barack Obama spend over a trillion dollars of our grandkids’ money to create jobs. Yet not one job was created,” Ron Ramsey said this week. “Again, the government does not create jobs. Businesses create jobs.

“I’m a small businessman myself. I’ve said many times that what I want out of government is absolutely nothing. Just leave me alone.”

But Democrats who want to see the Haywood megasite succeed see hypocrisy in Republican statements that jobs cannot be created through legislation.

“In this case, it takes some infrastructure money, and that comes directly from the state,” Fitzhugh said. “Now that’s pretty close to legislating jobs.”

Press Releases

Haslam Pledges Continued Support for Haywood County Megasite

Press Release from Bill Haslam for Governor, Sept. 22, 2010:

Looks Forward to Helping Local Officials Bring Jobs to the Area

BROWNSVILLE – Republican gubernatorial nominee and Knoxville Mayor Bill Haslam today visited a group of local elected officials and economic development professionals in Brownsville to receive an update on the progress of the TVA Megasite being developed there.

Mayor Haslam was an early supporter of the Haywood County Megasite and has made frequent visits to Brownsville over the past two years in order to learn more about the progress being made as well as the challenges that remain and how he can help now and also later, hopefully, as governor.

Today is Mayor Haslam’s second day in a row in West Tennessee focusing on rural economic development. He spoke yesterday with a group of local officials in Jackson about the unique challenges facing rural areas and discussed strategies for bringing jobs to West Tennessee.

“Bill Haslam understands the importance of this project to West Tennessee and to the state, and we truly appreciate his support,” Haywood County Mayor Franklin Smith said.

“He has been a strong supporter of the Megasite from the beginning, and there’s no better person to help us complete it and bring jobs to West Tennessee than Bill,” added Smith.

Mayor Haslam highlighted his plan to create a leadership position within the Department of Economic and Community Development devoted solely to small town, rural and agriculture issues as well as his regional approach to economic development, which will involve leveraging the unique assets of each region for job creation.

“The Haywood County Megasite is a significant asset to the region and to the state,” said Haslam. “The folks here have done a great job creating this opportunity and moving the project along, and I just want to make sure they know that they will have the full support of the governor’s office if I’m elected.”

“As governor, I will work hard to bring jobs to West Tennessee,” continued Haslam. “And working with the folks on the ground, the Megasite will be an opportunity to do just that.”

Mayor Haslam is the two-term Republican Mayor of Knoxville, reelected in 2007 with 87 percent of the vote. A hardworking public servant, Haslam led Knoxville to become one of the top ten metropolitan areas for business and expansion, while reducing the city’s debt, tripling the rainy day fund, reducing the number of city employees to the lowest amount in 15 years and bringing property taxes to the lowest rate in 50 years. An executive leader with a proven record of success, he helped grow his family’s small business from 800 employees into one of Tennessee’s largest companies with 14,000 employees.