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VOL. 41 | NO. 39 | Friday, September 29, 2017

Rutherford County positions itself for the next big score

By Sam Stockard

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Rutherford County and Murfreesboro officials say the community is well-positioned to land major employers that would boost wages and shift the economy from blue collar to white, even boosting home prices. But recruiting such employers is highly competitive.

“Sometimes it’s like water backing up,” says Larry Sims, owner of Sims Realtors and Auctioneers in Murfreesboro. “Something happens and it just breaks loose, and all of a sudden it just goes through the roof. And that could be happening here. The demand could be just out there and just stacking up.”

Marketing and recruiting are a key part of his business as well, Sims adds, but he points out that sometimes the market determines where jobs go.

Rutherford County plays second fiddle, to a degree, to Williamson County where the average household income is about $90,000-plus compared to about $56,000 in Rutherford.

Williamson County attracted the Nissan corporate headquarters from California nearly a decade ago, even though many Rutherford officials felt it would be a natural fit in Rutherford since Nissan’s manufacturing plant is located in Smyrna.

Destination Rutherford Chairman Bill Jones, who heads the county’s jobs initiative, agrees Rutherford could be hamstrung by the fact it is viewed as a blue-collar community, even though Middle Tennessee State University and State Farm’s regional office are two of its most valuable assets.

“It is true that you do build momentum, and corporations will go where other corporate headquarters are. But everybody started off trying to get something like that, and I do think, Williamson County, for example, got a presence of corporate headquarters and stuff like that, so it would seem natural that other corporations would look at that,” Jones says, noting competition is fierce for such opportunities.

“It doesn’t mean we can’t recruit them or can’t have success against them.”

Destination Rutherford’s recruiting focus is on jobs that would raise the average wage in Rutherford County, roughly $45,000.

It’s in the second year of a $4.3 million five-year campaign to bring in 10,000 new jobs and create 9,519 more secondary jobs. Yet its projected hourly rate for those positions is $17.30, which equates to nearly $36,000 a year.

Rutherford County Mayor Ernest Burgess, a Destination Rutherford campaign founder because of the county’s consistent donations to the jobs initiative, expressed surprise that the wage goal would be in that range.

“I would be more encouraged if at least some fairly significant part of those numbers were in the upper tier of salaries so it would sort of raise the bar a bit,” Burgess explains.

The mayor points out, nevertheless, economic recruiters have had some recent successes in Schwan Cosmetics and M-TEK (Kasai) opening corporate operations.

Japan-based M-TEK made a $13.4 million capital investment to bring in 250 jobs, 150 of them new positions, with an average wage of $60,000 at a site across from Murfreesboro Medical Clinic off Thompson Lane in the city’s Gateway area. The automotive parts manufacturer netted a $3.6 million land donation from the city along with a $34,791 personal property tax break over 10 years approved by the Industrial Development Board.

When Nissan started its battery manufacturing facility in October 2009 for the all-electric LEAF, using $2.5 billion in bonds issued by the county IDB, employees were to make $53,500 in the first three years and $69,500 in years four through 30.

Nissan is selling its battery subsidiary, Automotive Energy Supply Corp., along with the Smyrna and Sunderland, England [United Kingdom] battery operations to GSR Capital, a Chinese holding company, in a deal reported to be worth $1 billion. Officials aren’t sure yet how the sale will affect the bond package approved for the Nissan battery facility.

Because of the ripple effect on jobs created within the automotive industry, large numbers are connected to the supply chain.

Most of the jobs created through tax breaks approved by the Industrial Development Board over the last eight to 10 years have fallen in the mid-$30,000 to mid-$40,000 range.

For example, NHK Seating located in Murfreesboro in October 2011, creating 120 jobs with a capital investment of $37.4 million, taking advantage of a 10-year tax break of $1.94 million. At the time, its average pay was to be $36,500.

The Amazon Fulfillment Center got a 20-year property tax break to create 1,150 jobs with an $87.5 million investment. The pay and benefit package was estimated at $42,249.

Making the pitch

Amid constant shifts in the world economy, Rutherford County keeps pushing its benefits, such as a cost-of-living index at 96.9, and Murfreesboro as the fastest-growing city in Tennessee and 10th fastest growing in the nation.

Destination Rutherford’s marketing materials show 2,045 jobs created in 2016 with $401 million in capital investments from five relocations and 11 existing company expansions.

So far in 2017, the county has connected on 11 advanced manufacturing deals and six distribution/logistics projects with a $183.6 million capital investment and 1,281 jobs, according to Destination Rutherford.

Recruiting pitches are being made to 41 companies, 68 percent of them advanced manufacturing, 10 percent distribution and logistics and 17 percent of them Class A office/back office. If all of those were to come through, they’d yield $1.7 billion in capital investments and 11,922 jobs.

Patience is key

Haynes Bros. Lumber owner Terry Haynes, another campaign founder of Destination Rutherford, acknowledges economic recruiters haven’t hit that “big motherlode.”

But he says Destination Rutherford is a “big plus” for the county, adding he believes the market will force employers to start paying higher wages and salaries. Haynes recalls a time – not too long ago – when Murfreesboro residents had to travel to Nashville to see a specialized physician or to shop, and points to Saint Thomas Hospital and numerous restaurant and retail opportunities along Medical Center Parkway as crucial components of the local economy.

“It’s moving in the right direction,” Haynes says of the jobs market. “I think if people just hang on. … It’s a lot different than it was three to five years ago.”

Destination Rutherford Chairman Jones agrees, pointing out just a few years ago Murfreesboro and Rutherford County had no sites for a corporation to locate, even if it wanted to come there. Class A office space is available now, along with property, which gives the county a recruiting lift.

The city of Murfreesboro, for instance, owns property along Medical Center Parkway it has been marketing for at least a decade but hasn’t been able to attract a major corporation.

The purchase of some 200 acres in the mid-1990s and construction of Medical Center Parkway about a decade ago took “courage” on the part of the Murfreesboro City Council, Jones points out.

“Certainly, you go back many years, government and business and all of us had to decide: we’re going to make a commitment to this, and if we’re going to attract these types of things we’ve got to have some place for them to come,” Jones says.

The stage is set for better-paying jobs if economic recruiters keep making the pitch, Jones adds.

Mayor Burgess, a former executive with NHC Corp., acknowledges corporate people typically like to live where they’re comfortable – in a metropolitan area.

But he notes Rutherford County is a “big community” and growing, with more than 300,000 residents. He also says he believes the county is on the verge of breaking the dam on high-paying jobs.

“I think all the components are in place for that to happen,” he says.

Sam Stockard is a Nashville-based reporter for the Nashville Ledger. He can be reached at [email protected].

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