Amazon is coming to Nashville.
We had hoped for 50,000 new Tennessee jobs and the company's second headquarters, but we won't turn down the 5,000 new regular paychecks we'll get in a lesser flourish.
The online retail giant announced Tuesday that it will invest more than $230 million to establish a new Operations Center of Excellence in downtown Nashville. That means 5,000 new jobs - the single largest jobs commitment made by a company in Tennessee's history.
"This is a game changer for Tennessee," Gov. Bill Haslam said of Amazon's decision. "Amazon has spent the past year searching the nation for the best possible locations to expand and it chose Tennessee because of our business-friendly policies, low taxes and skilled workforce."
The big winners were New York City and Washington, D.C., where infrastructure was better and the talent pool was larger, Haslam acknowledged to the Associated Press. Amazon received 238 proposals from cities all over the country and Nashville made the short list of 20. It didn't make the final cut for a headquarters, however, when it became apparent to all that accommodating 50,000 new jobs would present issues. Nashville - despite its recent growth spurt - would have been stretched to provide the infrastructure and talent pool that Amazon needed, Haslam said.
But not even the smaller investment will come free to us taxpayers. A growing policy question is whether city and state governments should be bidding - with taxpayer money - for corporate giants like Amazon and Volkswagen to come to town.
In Amazon's case, the decision to put a new Operations Center of Excellence in Nashville was sweetened by state and city gifts totaling as much as $102 million. The state and city call the gifts "performance-based incentives" that depend on 5,000 jobs being created over seven years with an average wage of over $150,000.
Included in the incentives tally are cash grants of up to $15 million from Nashville and up to $65 million from the state. Additionally Amazon will get a $21.7 million job tax credit to offset state franchise and excise taxes for seven years.
Pundits and government watchdog groups are often happy to spew plenty of political anger over corporate power - and particularly that of Amazon, which they argue has helped shutter plenty of bricks and mortar businesses. Yet Amazon is very popular out in real-people land: Polling has shown it to be the second most trusted institution in America after the military.
Those same pundits and government watchdog groups - such as Tennessee's Beacon Center in Nashville - also are often happy to label state and city "incentives" to lure Amazon and other companies as "bribery" or "corporate welfare" on our tab.
Beacon Center spokesman Mark Cunningham said Nashville was passed over for Amazon's second headquarters, yet city and state officials "still got scammed into giving the company more than $100 million in taxpayer giveaways for a consolation prize."
Cunningham said Amazon and the government "played taxpayers and it is time for us to speak up against this type of corporate welfare. While we welcome new businesses and the jobs they create to our state, forcing middle-class Tennesseans and small businesses to give their hard-earned dollars to a multibillion dollar business is both unfair and immoral."
We can see and understand that strident outrage.
But we also know there are at least two sides to every argument.
If you're one of the 5,000 folks who lands a job, you're happy to see the fruits of your taxes. And since the state and city have made the incentives largely conditional, Amazon has to earn them with real investment in jobs.
Even if you're a Nashville and Tennessee taxpayer who doesn't go to work for Amazon, you must consider the long-term payoff for the city and the state - and yourself as a taxpayer: State economists say each of the 5,000 new Amazon jobs is estimated to create an additional 1.6 support jobs - to total 13,000-plus. In turn, those new jobs will bring in an estimated incremental tax revenue of more than $1 billion over the next 10 years.
Just think what Nashville and Tennessee might have gotten had the city and state already made the needed investments in transit and education systems to keep us in the running for the headquarters. Instead, Nashville voters and taxpayers in May dealt a resounding defeat to a multibillion-dollar Nashville transit ballot measure. Meanwhile, our state, despite regular small budget increases, continues to underfund K-12 education.
There's no such thing as a free lunch. The act of paying taxes is in itself an investment.
Put another way, we'll spend $102 million on Amazon over seven years to make $1 billion from it over the next decade.
Looking at how Volkswagen changed Chattanooga (we spent about $800 million in taxpayer dollars in the past 10 years to foster 12,400 direct and ripple-effect new jobs - perhaps up to 22,000 in coming years with recently announced new VW investments), it's hard to argue with the math of banking on jobs.