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Resolution RS2019-1644 (as amended)

A resolution authorizing an economic and community development incentive grant to be made to The Industrial Development Board of The Metropolitan Government of Nashville and Davidson County (the “IDB”) for the benefit of Amazon, Inc.

WHEREAS, The Metropolitan Government of Nashville and Davidson County (“Metropolitan Government”) is vitally interested in the economic welfare of the citizens living within the area of the Metropolitan Government (such area, the “County”) and wishes to provide the leadership necessary to enhance this area's capabilities for growth and development; and,

WHEREAS, the provision of quality jobs to area citizens by local business is both necessary and vital to the economic well-being of the Metropolitan Government; and,

WHEREAS, pursuant to Tenn. Code Ann. § 5-9-101(26), the Metropolitan Government is authorized to use available funds to make grants for economic and community development purposes; and,

WHEREAS, pursuant to Chapter 2.210 of the Metropolitan Code, in order to encourage economic and community development within the County, the Metropolitan Government is authorized to make economic and community development incentive grants with respect to “qualified projects” and “qualified companies” (as such terms are defined in Section 2.210.010 of the Metropolitan Code) if the location of such qualified project or such qualified company’s applicable facility within the County is expected to result in the creation of at least five hundred additional jobs within the County during the first five years of operations or during the first five years of an expansion of operations; and,

WHEREAS, Chapter 2.210 of the Metropolitan Code provides that the actual amount and period of economic and community development incentive grants pursuant to such Chapter 2.210 shall be made by taking into account, among other things, the number of jobs created, the amount of revenue from all sources that is anticipated to be received by the Metropolitan Government with respect to the location of the qualified company and its operations in the County (or in the qualified project), and other economic and community development opportunities that the qualified company and/or the qualified project is expected to create; and,

WHEREAS, Amazon, Inc. (“Amazon”), an online retail and web services company with employees worldwide, has announced its decision to build an Operations Center of Excellence, a regional headquarters, in the County (the “Project”), and in connection therewith, Amazon reasonably expects to create over 5,000 new jobs in the County during the next five years; and,

WHEREAS, in its initial scope and configuration, the Project will eventually consist of approximately five hundred thousand square feet of office and associated space located at the intersection of Church Street and 10th Avenue North, Nashville, Tennessee; and,

WHEREAS, the Metropolitan Government has found that Amazon meets the criteria to be eligible to receive the benefits of an economic and community development incentive grant as authorized by Chapter 2.210.020(B) of the Metropolitan Code; and,

WHEREAS, the Metropolitan Government has found that Amazon’s location of the Project in the County and the related investment and growth in connection therewith will maintain and expand significant employment and other commercial opportunities for area citizens; and,

WHEREAS, in order to promote industry and develop trade and to create jobs and reduce unemployment and to further other public purposes of the Metropolitan Government from the investment and growth in connection with the Project and other economic and community development opportunities that Amazon is expected to create within the County, it is in the best interest of the Metropolitan Government to make an economic and community development incentive grant to the IDB for the benefit of Amazon in an amount calculated each “Grant Year” by multiplying the number of “Amazon Jobs” (as defined in Exhibit A hereto) by $500 for a period of seven years from the commencement of the Project; and,

WHEREAS, the Nashville Convention Center Authority (CCA) receives tax revenues from a variety of sources, including portions of a hotel/motel tax (authorized under Tenn. Code Ann. §7-4-110), hotel room occupancy fees (Tenn. Code Ann. §7-4-202), a rental car tax (Tenn. Code Ann. §67-4-1908), campus sales taxes (Tenn. Code Ann. §67-6-103), airport departure taxes (Tenn. Code Ann. §7-88-101), and sales taxes collected within a Tourism Development Zone surrounding and extending beyond the convention center (Tenn. Code Ann. §7-88-101), which zone includes the Nashville Yards project designated as the site of the Amazon, Inc. incentive proposal; and

WHEREAS, the project proposal submitted by Amazon, Inc. will generate significant increased inflow of revenue to the CCA from the increase in employees in the downtown area and the other anticipated businesses which will be part of the Nashville Yards development; and

WHEREAS, under the terms of this Resolution, the Metropolitan Government may be obligated to pay a cumulative seven-year total of $17,500,000, assuming creation of 5,000 new jobs for each grant year totaling $2,500,000 annually; and

WHEREAS, the Metropolitan Government will be required to pay up to $15,250,000 from the general fund in order to reimburse the Nashville Yards project for infrastructure items at its project site; and

WHEREAS, in fiscal year 2017, the CCA received over $92,365,781 in revenues generated by the tourism-related taxes and fees described above, and $102,539,865 in fiscal year 2018; and the CCA will receive substantial additional future revenues following completion of this Nashville Yards project, as well as others currently under construction; and

WHEREAS, as of June 2018, the CCA held $124,392,777 in cash and cash equivalents of unrestricted funds in unencumbered surplus revenue (inclusive of sales taxes, other revenue streams dedicated to the convention center, and operating profits); and

WHEREAS, funds generated or received by the CCA may be applied to its operating expenses and/or to general CCA purposes; and

WHEREAS, the bylaws of the CCCA provide that among the “purposes” for which the Authority is organized are to operate within the meaning of and exercise all powers granted to it by state law, including the promotion of tourism and business opportunities through accommodating conventions or other means, and to do what is reasonable and necessary to promote and further develop tourism, convention and employment opportunities; and

WHEREAS, the CCA has previously defrayed expenses incurred by the Metropolitan Government by appropriating approximately $10,441,661 from CCA revenues to the general fund of the Metropolitan Government. Pursuant to a Memorandum of Understanding signed May 8th, 2018 between the CCA and the Metropolitan Government, the CCA appropriated portions of its receipts from hotel/motel tax revenues, hotel room occupancy tax revenues, and campus sales tax revenues; and

WHEREAS, the CCA further committed to appropriating between $1,500,000 and $3,000,000 annually between 2018 to 2027 to assist with funding the proposed transit improvement program (which failed at referendum in May 2018); and

WHEREAS, this appropriation of funds as a reimbursement by the CCA of expenses incurred by the Metropolitan Government has been construed as consistent with the operating expenses and/or purposes of the CCA; and

WHEREAS, it is therefore appropriate that the CCA be requested to voluntarily pay for the economic and community development incentive grant, using the same means as the Memorandum of Understanding between the Metropolitan Government and the CCA dated May 8th, 2018; and

WHEREAS, it is in the interest and welfare of the citizens of the Metropolitan Government to approve and execute the Economic and Community Development Incentive Grant Agreement with the Board and Amazon in the form attached hereto as Exhibit A (the “Agreement”).

NOW, THEREFORE BE IT RESOLVED BY THE METROPOLITAN COUNTY COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:

Section 1. That the Metropolitan Government shall make annual economic and community development incentive grant payments to the Board for the benefit of Amazon, or an Amazon Entity, during the seven year Grant Period (as defined in Exhibit A hereto).

Section 2. That the amount of the annual incentive grant payments authorized hereby be calculated by multiplying the number of Amazon Jobs (as defined in Exhibit A hereto) for each Grant Year (as defined in Exhibit A hereto) by five hundred dollars ($500.00), provided that the annual incentive grant payment shall not exceed two million five hundred thousand dollars ($2,500,000) in any given year, representing a maximum of five thousand Amazon Jobs. Any increase in this yearly payment amount must be approved by a resolution of the Metro Council.

Section 3. Notwithstanding anything to the contrary herein or within the Agreement, the Metropolitan Government's obligation to make any payments hereunder is contingent upon (a) the solicitation by the Metropolitan Government of a voluntary appropriation of funds from the Convention Center Authority (CCA) in an amount equivalent to the economic and community development incentive grant approved herein, using legal revenue sources consistent with the operating expenses and/or purposes of the CCA; and (b) the receipt of a response from the CCA to the solicitation by the Metropolitan Government for a voluntary appropriation, to be delivered by the CCA to the Metropolitan Council prior to the adoption of the Budget Ordinance of the Metropolitan Government of Nashville and Davidson County for Fiscal Year 2020.

Section 4. Notwithstanding anything to the contrary herein, the Metropolitan Government's obligation to make any payments hereunder is contingent upon the annual appropriation of funds for such purpose by the Metropolitan Council.

Section 5. That the Agreement by and among the Metropolitan Government, the Board and Amazon.com Services, Inc., the form of which is attached hereto as Exhibit A and incorporated herein by reference, is hereby approved, and the Mayor is authorized to execute the same; provided, however, that such Agreement must be approved as to legality by the Metropolitan Government Department of Law prior to being executed by the Metropolitan Government or the Board.

Section 6. That other than as provided at Section 4 of this Resolution, any material amendments, renewals, or extension of the terms of the Agreement must be approved by resolution of the Metropolitan Council.

Section 7. That this Resolution shall take effect from and after its passage, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.

Sponsor(s)

Tanaka Vercher, Freddie O'Connell

Related Documents

Legislative History

Referred toBudget and Finance Committee

IntroducedMarch 19, 2019

AdoptedMarch 19, 2019 - Roll Call Vote

ApprovedMarch 25, 2019

ByMayor Briley's signature

Requests for ADA accommodation should be directed to the Metropolitan Clerk at 615-862-6770.

Last Modified: 03/25/2019 11:27 AM