The Other Tango

At least this time, I can report that Loudon County Economic Development President, Pat Phillips, told the truth. Looks like other counties are also looking to give away their citizens property taxes.

I received the headlines above from a former Lenoir City resident who now lives down toward middle Tennessee but still keeps up with local activities.

The Rutherford County Industrial Development Board voted last week to give the secret Project Tango, even bigger tax breaks than Loudon County did. They voted to give a 100%, 20 year tax break but they didn't vote to give away the extra million dollars like we did.

Anyway, I guess it's helpful to see we're not alone when it comes to government giveaways. Misery loves company.

See Story Below.

Tax break OK'd for 'Project Tango'

Company could bring up to 1,150 jobs to Rutherford

MURFREESBORO Rutherford County's Industrial Development Board showed it was ready to do some two-steppin' Wednesday if it means hundreds of jobs for the county.

Board members approved two "aggressive" tax break plans designed to lure an anonymous company, called Project Tango, with a promise to bring either 325 or 1,150 jobs to a warehousing and distribution operation here.

The American company is considering locations in Murfreesboro and La Vergne, as well as other sites in Middle and East Tennessee and in different states, for a large sort facility that would bring 1,150 jobs or smaller non-sort facility that would create 325 jobs, according to information presented to the board by Rutherford County Chamber of Commerce President Paul Latture.

All jobs are to be full time and pay an average of $16.25 per hour, according to Latture, who said the company plans to make a decision within two months and buy property by Oct. 1.

"We felt where we all stand economically, nationally as well as locally, we (should) try to do everything we can do to put ourselves at a competitive advantage," Latture said.

The board approved a 20-year 100 percent tax break totaling $15.8 million with the understanding the company will invest $87.5 million in a building and bring a total payroll of $48.5 million. Its total economic impact is calculated at $133.9 million by Younger & Associates, the firm that conducts the board's benefit/cost analyses.

"A 20-year abatement is unusual," board member Rob Lyons said, "but given the current economic conditions and the fact that the company will be making a decision among multiple sites, perhaps we needed to be a little more aggressive than we normally would to try to land the project."

On the non-sort facility proposal, board members OK'd a 15-year tax break totaling $4.9 million based on a proposed company capital investment of $51.5 million, $13.7 million in wages and total economic impact of $82.6 million.

Latture told the board the proposals meet the Rutherford County Commission's required 3-to-1 return on benefits to cost.

Chamber of Commerce officials are required to keep the company's name secret under a non-disclosure agreement, Latture said. Queried by board members about the company, Latture would say only that it is a "recognizable" and fast-growing company.

Nearly every board member noted that this type of agreement is new to Rutherford County.

"It's very aggressive. I think it's a sign of the times," said board member Ed Davenport. "I think the economy that we're in probably requires aggressive action that we haven't been required to do before."

IDB Chairman Jim Baker pointed out that a few years ago the board probably wouldn't have approved such tax breaks for a company, but with the county's unemployment rate at 9.6 percent the board must take action to compete with other counties and put people back to work.

"A few years ago everybody in the county who wanted a job had a job. That isn't the case now," Baker said. "There's a lot of good people out there who need work, but the jobs aren't there. I think this project, if we get it, it'll open up quite a few jobs for people in the county to get."

Board members could recall only one instance in which a company received a 20-year plan from the IDB and that was Nissan in 1982 when it opened the Smyrna plant. But it made payments in lieu of taxes instead of receiving a 100 percent break, Baker said.

IDB member David Waldron noted that Nissan helped end a recession for Rutherford County when it started construction in 1982 and the impact was immediate.

"We're moving in the right direction if we incur these jobs," Waldron said.

Before votes were taken on both measures, Lyons, who is Murfreesboro's city manager, called for the contract to be amended to ensure the tax agreement could be adjusted if the company were to fail to meet employment requirements.

The votes were 5-0-1 and 6-0 on the measures, with new member Jimmy Evans passing on the non-sort facility vote. Evans, who was a few minutes late to the meeting, said afterward he misunderstood the first motion but supports the tax abatement.