Nashville reverses course, releases original Amazon incentives. Here's what Music City offered to lure HQ2

Sandy Mazza
The Tennessean
Gov. Bill Haslam, Amazon's Holly Sullivan, Nashville Mayor David Briley and Tennessee Economic Development Commissioner Bob Rolfe gather for a photograph after a news conference Nov. 13, 2018, in Nashville.

Nashville's initial lure for Amazon's second headquarters was an annual $500-per-job grant and 50 percent off property taxes for 15 years, according to the original incentive offer released by Metro officials Thursday afternoon.

For 10,000 workers, that would have amounted to a $5 million-a-year payment and a total 15-year cost of $75 million, according to the letter signed by then-Mayor Megan Barry.

In addition, the city pledged a host of other incentives — including fully funding any needed connection to a planned mass transit system.

Nashville was named a finalist for Amazon's much-coveted HQ2 in January, after 238 U.S. cities contended for the business with cash grants and tax breaks. 

The tech giant said the new facility would bring 50,000 workers to the winning city. If those were added at once, that would have cost Nashville $25 million a year and, ultimately, $375 million over 15 years, under the original offer. 

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Instead, Amazon announced this month that it will split the offices between New York City and Arlington, Virginia.

Earlier this month, Mayor David Briley's office declined to release the original HQ2 offer, signed by Barry in September 2017.

But after repeated requests from the community, Briley "decided in this instance to provide it," according to a statement released to the media. 

Amazon will get millions in incentives for smaller operations center

Instead of the headquarters, Nashville won a smaller operations center that will employ 5,000 workers with an average annual wage of $150,000.

The city offered the same $500-per-job grant but over a shorter period of time — seven years, rather than 15 — under an incentive package totaling as much as $15 million.  Metro council members still must sign off on the payment. 

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The state will also pay $65 million cash and extend $21.7 million in tax breaks. In return, Amazon promised a $230 investment that will add up to $1 billion over 10 years. 

The Tennessee Valley Authority and the Tennessee Department of Economic and Community Development have not yet responded to a request for the original HQ2 offer.

In addition to the cash grant, Nashville promised "50 percent off of any real or personal property taxes owed by Amazon through a payment-in-lieu-of-taxes (PILOT) agreement."

Some local governments offer companies a 100 percent abatement on their property taxes. Also, Tennessee law allows PILOT agreements to stretch up to 20 years, plus up to three years for construction — and longer if approved by state officials. Most PILOT agreements in Tennessee run between 10 and 15 years. 

Barry administration promised connections to mass transit system 

Further, Barry's administration promised to fully fund the cost of building transportation connections to a new citywide mass transit system. 

At the time, the city was planning a $5.4 billion transit plan for Nashville. 

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Barry resigned in March in the wake of a scandal involving an extramarital affair with a member of her security detail and a related felony theft charge. Then voters in May rejected the transit referendum to fund 26 miles of new light rail and bus routes. 

"The city would fully fund the cost of any needed connections from the selected project location to the mass transit system that the city is developing," Barry wrote. "The infrastructure investments to be funded by the city also could include items such as sidewalks, greenways, roadways, and parks that would support Amazon's second headquarters."

The Nashville Area Chamber of Commerce also sent a 40-page glossy book pitch to Amazon celebrating the city's rapid growth, low taxes and other perks. 

Reporter Mike Reicher contributed to this report.