HCA Tax Breaks Breeze Through Metro Council



One of the largest incentives packages in Nashville's history passed the Metro Council last night with ease.

As expected, Mayor Karl Dean's deal for Nashville-based Hospital Corporation of America, which is projected to total around $66 million in tax breaks and cash grants, met little opposition. The health care giant has plans to move the headquarters of two of its divisions into two 20-story towers to be constructed in the long-vacant West End Summit property.

The mayor's offer, now approved by the council, includes a 100 percent property tax abatement of up to $3 million per year for 15 years — with a five-year extension available if the company continues to occupy the space — a $1 million one-time payment to cover relocation costs and an annual payment of $500 per employee.

I've got more on last night's vote over at The City Paper. An excerpt:

Councilman Josh Stites was the lone council member to vote against the deal. He welcomed the council to “look at the math” and urged them, in vain, to vote against the deal because it’s “not fair for every business owner who works hard to beat out a living in the city.”

The math, Stites argued, shows how economic incentives are awarded to a very small group of companies and result in a relatively small amount of the city’s jobs. Out of 8,900 for-profit companies in the city — a number Stites sourced to the Secretary of State’s office — only 12 are currently taking advantage of active incentives deals, meaning less than one percent of Davidson County for-profit companies have access to taxpayer-funded economic incentives.

Addressing the argument that the companies awarded with such deals provide the most jobs, Stites conceded that they do indeed provide jobs, but noted that out of 537,000 jobs in the county, according to a Chamber of Commerce study two years ago, the total number retained or created as a result of such deals is 14,000.

With that in mind, Stites is planning to file legislation next year that he said would broaden the access to incentives, if they’re going to exist.

Metro Finance Director Rich Riebeling addressed the council at the request of Councilwoman Edith Langster, a sponsor of the incentives package.

"This project will create jobs,” Riebeling said, “will create more revenue for the city than we're currently getting and it will take an area of the city that is underdeveloped now and turn it into, I think really, one of the more important developed areas in the city."

The deal has provoked further discussion of the mayor's focus on tax breaks and economic incentives as a primary strategy for economic and community development. The practice started in Nashville under Phil Bredesen's mayoral administration, but his successor, Bill Purcell, did not enter any such deals with companies during his eight years in office.

Stites has been a consistent opponent of the policy trend, but says that if the city is going to offer tax incentives for companies, it should make them available to all companies looking to expand, not just the largest, well-connected corporate entities. The idea is attracting support from others on the council, and since the policy of offering tax breaks and other incentives to lure companies to Nashville, or keep them here, doesn't look to be going away, it will be one to watch going forward.

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