It’s been quite a year for Nashville.
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Over the course of the past 12 months, city officials secured deals with some of the biggest companies in the U.S., including Amazon, AllianceBernstein, EY, SmileDirectClub, Mitsubishi and Pilot.com, culminating, in total, close to 10,000 new jobs.
And there’s no slowdown in sight: Ralph Schulz, the president and CEO of the Nashville Area Chamber of Commerce, told FOX Business there are currently about 121 businesses in the pipeline, either looking to expand in or relocate to the Nashville area.
“There’s no question that the move of AllianceBernstein to Nashville has prompted exploration by other New York financial firms,” Schulz said. He declined to provide names of the companies because they signed nondisclosures.
This week, Mitsubishi -- the Japanese automaker -- shifted its North American headquarters to Tennessee, about 20 miles outside of Nashville, from California, bringing close to 200 jobs with it.
"That was a big win for us," Tennessee Economic and Community Development Commissioner Bob Rolfe told FOX Business on Thursday. "Because we cover headquarter jobs. Those are the high-quality jobs, the C-Suite comes to your state."
The same day they announced the news about Mitsubishi -- after courting the company the week prior in Japan -- Rolfe said they had another piece of news: Pilot.com, a newer tech startup previously based in San Francisco, had also said that it would open an administration headquarters, creating 500 jobs.
Plus, Starr Investment Holdings, multibillion-dollar private equity firm based in New York, is planning to open an office in Nashville this summer, a person with knowledge of the matter confirmed to FOX Business. The company invests in "privately-held technology-enabled services" with a focus on health care and financial services, according to its website. It's unclear what the exact timeline for the new office is, or how many new jobs it could create.
Of course, as Rolfe pointed out, success builds on success.
“It’s not like there’s this mass exodus,” he said. “But I think people have observed – when you look at Amazon and EY and AllianceBernstein and some of these larger projects – that they made the decision to come to Tennessee. I think other companies are asking why. What do they see? What is so attractive about Tennessee?”
Just last May, AllianceBernstein, a New York-based global investment management firm owned by French insurance conglomerate AXA, announced that it was moving its headquarters to Nashville, expecting to bring with it 1,050 jobs and a $70 million investment. Almost six months later, Amazon announced that it was bringing a new operations hub to Nashville, as well as 5,000 jobs and a $230 million investment – the biggest in Tennessee history.
City officials maintain that the flock of businesses moving to Tennessee was years in the making, part of a campaign to position the city as the new (and more affordable) Austin or Denver.
“Really what it comes down to, the basics for a business to be located in Nashville are strong,” Schulz said.
He elaborated to say that Nashville has a business-friendly tax structure, a strong geographic location, quality infrastructure in the city and a relatively stable political climate in the state. In 2018, U.S. News and World Reports ranked Nashville as one of the top 20 places to live in the country, with a solid job market, a decent quality of life and a big enough workforce to accommodate the growing job market.
Rolfe did note, however, that the 2017 Tax Cuts and Jobs Act (which placed a $10,000 cap on state and local deductions) raised new questions for businesses about whether they should relocate to a more business-friendly state.
"It has driven, I think, a lot of good conversations for companies who are trying to lower their costs," he said.
Tennessee, meanwhile, boasts no income tax, one of nine states that does so, as well as lower property taxes, compared to states like New York and California (it does, however, levy a 6 percent hall tax on investment interests and dividends).
“It really creates an enormous windfall for companies that are considering leaving the Northeast and the West Coast,” he said. “That’s not saying everybody is in a hurry to exit these higher state and locally taxed areas, but we are seeing more conversation.”
Schulz and Rolfe mostly dismissed concerns about potential side effects of the growing corporate presence in Nashville, like gentrification or increased income inequality that have affected other growing hubs like Seattle and San Francisco. So far, Rolfe said, there has not been a massive swing in property values. According to U.S. News, Nashville remains relatively affordable, compared to other major U.S. cities, although the housing market has become increasingly competitive. The median home price has also started to gradually rise.
"Nashville's been growing at this pace for a while," Schulz said. "The personality of the city doesn't change. People are drawn to the personality of the city. They want to be a part of it, not change it."