Pipeline for new projects as big as ever in Tennessee

With both domestic and foreign-based businesses looking to locate new plants and investment in America, Tennessee is poised for bigger growth in 2017, according to the state's top economic recruiter.

Bob Rolfe, a former investment banker and business owner who took over as commissioner of Tennessee's Department of Economic and Community Development last month, told community leaders in Southeast Tennessee Thursday that his agency is working to capture more of the global growth he expects this year.

"The pipeline in Tennessee right now for new projects is probably as grand as it has ever been," Rolfe said after talking with city and county mayors and economic development specialists at the Tennessee Aquarium. "We're seeing manufacturing companies making the decision to redeploy capital back in the U.S. and bring some of these jobs back on shore with the concept that they are going to build it here and sell it here. That is so exciting for all of us."

The state has set a goal of attracting at least 25,000 jobs in 2017, up from the 21,063 announced last year by projects recruited to Tennessee by the state.

While more American firms are looking at Tennessee, the Volunteer State is also trying to play more on the global stage with international offices in South Korea, the United Kingdom, Japan, China, Germany, Italy and Benelux.

"There is a direct correlation between having suits and boots on the ground and capital coming to Tennessee," Rolfe said.

Allen Borden, deputy commissioner for the Department of Economic and Community Development, said the state is looking at soon adding other recruitment offices in France and Spain.

"If you are not in the global game of economic development, you're not in the game at all," Borden said.

Last year, nearly 20 percent of the new business investments in Tennessee were from foreign-based companies, including additions in Chattanooga by the German-owned Volks- wagen, the Spanish-based Gestamp and the China's Yanfeng and the expansion in Charleston, Tenn., of the German-owned Wacker polysilicon plant.

"We expect this number to continue to go up," Borden said. "The U.S. marketplace is the largest in the world and these international companies that want a piece of the U.S. market know that they are going to have to come to the United States and invest here, open up factories here and hire people here to be able to play in this space."

Rolfe said his department's budget likely is to be flat in the year ahead, but he said major projects are still getting the support of the state with tax breaks, fast track incentives and special grants. Such incentives, Rolfe said, are essential to landing some projects "because it has become very, very competitive to attract new industry."

"We would not be considered for a lot of projects without the strong support we have from the governor and our Legislature," Rolfe said. "When companies look to the Southeast to locate new plants and hire new workers, they look to the economic incentives, no matter how great our quality of life is here in Tennessee."

Last month, the Florida Legislature voted to kill Enterprise Florida, the agency Gov. Rick Scott used to provide tax breaks to recruit businesses in the Sunshine state.

"That's one less competitor for us," Rolfe said. "I guess they're going to be selling sunshine, but at the end of the day I can assure you that Georgia, Alabama and South Carolina and other states in our region are still enormous competitors for us."

The state could lose some of those incentives if Congress adopts the proposed budget from the Trump White House, which proposes to eliminate the Appalachian Regional Commission and the Neighborhood Reinvestment Corp.., among 19 agencies eliminated in the administration spending plan.

"We're staying the course for now and hopeful that for at least for foreseeable future it will be business as usual," Rolfe said.

During his visit to Chattanooga Thursday, Rolfe and leaders of his 100-employee ECD staff handed out giant copies of state checks to Polk County, which received $50,000 to help develop its tourism industry around the Ocoee River, and $550,000 in grants to Rhea County for both tourism and industrial site development.

One of the biggest of 18 Site Development Grants announced last month for rural counties across Tennessee went to Rhea County to help pay for an access road to the Rail Hub South Industrial Development north of La-Z-Boy's biggest plant in Rhea County. The $500,000 state grant has been matched with $2.5 million of land acquisition funds from the city of Dayton to acquire 330 acres to establish a 260-acre site-ready industrial park along the rail line north of Dayton.

Dennis Tumlin, executive director of the Rhea County Economic and Tourism Council, said the new industrial park will be one of only about 100 in the entire country with more than 100 acres of vacant developed property served by a rail line and near a 4-lane highway.

"We're so close to the Chattanooga workforce that that site works with the Chattanooga regional partnership (among area counties)," Tumlin said. "It will take the entire region to sell this site because it should be a regional asset with people from many counties working at this site and getting trained at area schools and universities."

Dayton Mayor Gary Louallen said the city has made some of its biggest capital investments in developing the new industrial park to help bring more business to the city.

"When we hired Dennis, I said we need inventory," Louallen said. "He and I are used car salesmen and we didn't have any cars on the lot. So now we have the product now, we are getting some interest in the site, and we feel really good about it."

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.