Haslam Administration Considered Tennessee Tower Giveaway

Haslam Administration Considered Tennessee Tower Giveaway

By Phil Williams. CREATED Feb 13, 2014

NASHVILLE, Tenn. -- Critics call it an example of "corporate welfare -- on steroids."

The proposal, designed to lure a big corporation to Tennessee, is contained in confidential documents leaked to NewsChannel 5 Investigates. As part of that effort, the documents show that the Haslam administration considered giving away a major state office building.

For months, NewsChannel 5 had asked the Haslam administration for those documents. And for months, they refused.

It turns out, they provide dramatic evidence about what happens to the public's money -- evidence that's kept secret from the public.

"To have these corporations come to the state of Tennessee and negotiate in secret, it's just crazy," said Ben Cunningham, president of the Nashville Tea Party.

Such economic development proposals are some of the most closely guarded secrets of state government, hiding exactly what the state gives big corporations to set up shop in Tennessee.

After we showed him the highly confidential documents from one such push that the public was never supposed to see, Cunningham exclaimed, "Holy mackerel!"

"Oh, my gosh!" echoed Democrat Rep. Sherry Jones of Nashville.

Cunningham added, "Phil, if you told me this, I wouldn't believe it. I swear I wouldn't."

In a script for Gov. Bill Haslam to read on camera -- prepared in 2011 by his Department of Economic and Community Development -- a most unusual offer was drafted to try to entice retail giant Sears to relocate its corporate headquarters to Tennessee.

The Sears effort was dubbed "Project Neptune."

"We're so committed to making your new home in Tennessee that we are prepared to offer you one of the premiere buildings in Nashville's thriving downtown," the script read.

"Our state office building, the Tennessee Tower, can be an instantaneous and immediate home for Project Neptune's corporate headquarters. This highly visible and historic building offers over 600,000 square feet of prime office space -- located conveniently across from Legislative Plaza and a stone's throw away from my office in the state Capitol."

The Tennessee Tower is the iconic building that longtime Nashvillians may remember for its annual holiday messages.

"Are they going to give away the Capitol, too?" Cunningham asked.

"They're going to offer them the Tennessee Tower, one of the major, probably the major, state office building -- here you can have it. This is owned by the taxpayers by you and me. This is not owned by Bill Haslam."

VIEW THE 'PROJECT NEPTUNE' DOCUMENTS

Jones also reacted strongly.

"It is just totally outrageous that this administration thinks it can come in and start giving away state buildings," she added.

A Haslam spokesperson claimed the idea of giving away the Tennessee Tower never really got serious consideration and that the governor never delivered those words drafted for him by his economic development team.

But the administration refused to release the video that the governor did record for Sears, saying it's confidential.

Cunningham was skeptical of the official story.

"They're not going to put this in writing and write out a script for the governor unless they've done a lot of groundwork," the Nashville Tea Party president added.

While the Haslam administration emphatically denied that offer of the Tennessee Tower ever made its way to Sears, no one disputes that the rest of the confidential proposal -- including possible incentives of more than half a billion dollars -- was on the table.

The Project Neptune proposal lays out all the possible incentives available to Sears if it brought 6,100 jobs, including a "super job tax credit," "franchise tax savings," a "standard job tax credit," an "industrial machinery credit," "sales and use tax credit," a "headquarters relocation credit," plus "training incentives" and "infrastructure incentives."

Total potential value of the state package under a "high scenario" was $588.8 million dollars. 

"This is $600 million -- that is a very significant part of the annual budget of the state of Tennessee," Cunningham noted.

We did the math, and that $588 million is almost $100,000 per job. The "low scenario" was $477.6 million, which is $78,000 per job.

"The numbers are just outrageous," Jones said.

While the Haslam administration's corporate recruitment efforts recently earned headlines for being best in the nation, the Senate Finance Committee was asking just last week whether a sudden downturn in corporate tax collections may be tied to those sorts of corporate giveaways.

"That really is the problem with the whole scenario," Cunningham said. "It is politicians giving away our money to make them look good."

And critics say the fact that they at least considered giving away the Tennessee Tower to Sears suggests a certain mindset.

"The feeling that you get is that there is nothing off limits, there's nothing that we wouldn't give to these corporations," the Nashville Tea Party president concluded.

The Haslam administration refused to provide anyone to go on camera and explain what we see in these documents.

Not only do the documents provide the first hint of how big these state tax breaks might be, they also show how Tennessee counties and cities compete against each other to see who could offer the biggest local tax breaks.

So why should these documents be confidential?

The argument is that Tennessee is competing against other states, so we don't want to give away our hand.

But Sears' representative on this deal was the big real estate giant Jones Lang Lasalle --  and they were playing various states off against each other. So they knew what was on the table.

That explains why Sears ended up staying in Illinois.

Back to NC5 Investigates: Tennessee's Secret Deals
NewsChannel 5 Investigates

 

Phil Williams

Phil Williams

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Phil Williams is chief investigative reporter for NewsChannel 5's nationally award-winning investigative team.