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Amazon, unfazed by New York reversal, vows commitment to Nashville

Amazon officials, unfazed by the company’s reversal in New York, reaffirmed the company’s commitment to Nashville and defended the financial incentives it has sought from the city and state. 

Nashvillians should not be concerned that the company will pull back from its commitment of bringing a record 5,000 jobs to the city, Holly Sullivan, head of Amazon’s economic development team worldwide, and Jodi Seth, Amazon’s head of policy communications, said in a meeting with The Tennessean.

The interview came two weeks after Amazon announced it was no longer bringing an anticipated 25,000 jobs to Queens, a move both mourned and celebrated by New York officials and residents.

“New York was a unique situation,” Seth said.

“Unique doesn’t even describe it,” Sullivan added.

Amazon has attributed its decision to abandon its New York headquarters to political backlash from state and local politicians. The company said 70 percent of New Yorkers supported Amazon’s plans, citing polling data.

Nashville is not without its Amazon critics. At a town hall held in February, concerns about how the company’s large local presence could shape housing costs or exacerbate gentrification were raised among community activists and labor union leaders. A Seattle councilwoman warned residents about increased income inequality in Seattle that she associated with Amazon’s growth, and some attendees objected to the financial incentives reward to the company.

Sullivan said the company’s experience in New York would not alter its entry to Nashville, and Amazon will continue with its community outreach that included an event at Ryman Auditorium in February.

“Community engagement is something that is, quite frankly, in our DNA,” Sullivan said. “You are never going to locate in a community or neighborhood that you are going to have 100 percent support and, oftentimes, the most vocal are those against something. But, it’s also an education opportunity for us to learn, what are their priorities? They might, actually, once they get to know us realize that we might be aligned on some of those priorities.”

Although there has been some pushback to Amazon in Nashville, Sullivan said the overall reception from policymakers, business leaders and residents has been positive, which has been important to the company since it launched its headquarters search, Sullivan said. 

“We put in our original (request for proposal) that we want to locate in a community that wants us,” she said. 

When Amazon officials scoped out cities ahead of the headquarters decision, they spoke with Nashville residents — those on sidewalks or Uber and cab drivers — to gauge general interest.

“Everyone was excited about it,” she said. “That also made us feel it might be a good opportunity for us to mold into this neighborhood… Having your policymakers’ support is important, but also having the community support.”

Sullivan attributed the problems the company faced in New York largely to political timing. 

“There is a division within the Democratic party,” Sullivan said. “I think the timing of our announcement really just hit a very interesting time in our country. When having different conversations of political nature, it’s easy to make Amazon a target because we are a big company, because we have Jeff Bezos as a CEO. It was a perfect political storm we hit.”

At issue in New York was $3 billion in incentives committed to the company that would be deducted from Amazon’s tax payments. In Tennessee, state officials have committed about $65 million for capital expenditures based on the company creating 5,000 jobs and nearly $22 million in job tax credits offsetting state franchise and excise taxes. Metro Council is on track to approve about $15 million, or about $500 per job, over a seven year period.  

Angelos Angelou, an Austin-based site selector, urged caution to those protesting Amazon incentives in Nashville. While incentives should be used sparingly, they are most effective when used on large, anchor companies that attract other businesses that further build an ecosystem, he said. 

“These kind of deals you win once in a lifetime,” Angelou said. “The economic impact is going to far exceed this incentive package.”

The city and state incentive structure ensures that each entity has “skin in the game” for such a massive investment and jobs commitment, Sullivan said. She also emphasized that the incentives will be spread out over the next seven years and that they don’t account for the $1 billion from indirect impact that the company anticipates will come from Amazon’s Nashville center. 

“On the city council side, there are no incentives until after we create a job,” she said. “If the incentives are all post performance and the tax revenue is generated from it, that is what I think sells the incentives and makes the incentives worthwhile.”

Sullivan affirmed that the Nashville jobs expectation remains 5,000, even after New York lost its 25,000 Amazon jobs. The company foresees spreading those jobs across the company’s other 17 hubs at this point.

More jobs in Nashville “would be a consideration,” Sullivan said. “That is certainly not a decision we are prepared to make today.”

Amazon will locate its Operations Center of Excellence in the Nashville Yards site near the Gulch and expects to open the building in 2021.

The company was drawn to Nashville because of people with diverse skill sets moving into the city, its history as a logistics hub and the emerging tech sector, Sullivan said. Nashville was not a good fit for a headquarters, but company officials saw an opportunity for a smaller hub.

“If you look at the data, the types of people moving to Nashville, there is certainly a wave of diversity of the talent base and certainly an emergence of that tech talent,” Sullivan said. 

Sullivan said that there are no specific plans yet from Amazon to help address housing and gentrification issues that might accompany the company’s local growth. In each of the 20 cities chosen as finalists for the Amazon headquarters, affordable housing was a top issue. Historically, the company has focused more on addressing the homelessness that comes from that issue, Sullivan said. 

“We want to get in here and understand what the challenges are,” she said.

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Reach Jamie McGee at 615-259-8071 and on Twitter @JamieMcGee_.

IN DEPTH: The inside story of Nashville’s surprise Amazon win