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Tennessee Conservative News [By Paula Gomes] –
The City of Clarksville is reportedly getting a Costco after luring the corporation with an incentive package. Worth $21.5 million in sales tax revenue over the span of a decade, the deal has been crafted in such a way that Costco won’t see a penny until they meet three performance obligations first.
Costco must be in business for a full year before receiving their first incentive, generate a minimum of $172 million in annual sales revenue, and a minimum of $1.075 million in yearly sales tax revenue. If all these conditions are met, the corporation will receive incentives in six month intervals over ten years which will work out to $2.15 million annually from Montgomery County’s share of sales tax revenue, estimated to be $250 million.
The city and Clarksville-Montgomery County Schools will not be turning over their share of sales tax revenue, with Clarksville City Government annually receiving $1.65 million and the school district receiving $4.57 million.
According to the Economic Development Council, the money will be transferred from the county to the Industrial Development Board who will then pass it on to Costco.
Costco is intended to be the anchor tenant for Freedom Farms, a development of 220 acres, and the only business which will receive sales tax incentives. All local sales tax revenue generated from other businesses within the development will go the City of Clarksville and Montgomery County governments. Clarksville-Montgomery County School System will also get their share.
Retailers such as Barnes & Noble, REI, and Trader Joe’s are on the list as potential tenants, along with others. Around 600 apartments are also planned.
It is hoped that a Costco located in Clarksville will redirect the tens of thousands of people currently driving from the city and surrounding areas to go shop at Costco locations in Nashville and Hendersonville. A Clarksville location will also likely draw hundreds of thousands of customers from surrounding counties.
However, it’s not all good news. With so many potentially driving to Freedom Farms for Costco, traffic will increase substantially, putting pressure on already maxed out roads. Freedom Farms developer, Oldacre McDonald, is planning to take on some improvements as part of the project in an effort to alleviate any future traffic congestion.
The incentive package is still pending approval from the Montgomery County Commission.
Over all, Tennesseans, community advocates and lawmakers have raised questions over the past few years about how wise it is to prioritize corporate welfare over that of local businesses and residents.
At the state level, a large incentive is expected to cover about one third of Starbucks’ anticipated $100 million investment meant to create 2,000 jobs. Tennessee taxpayers will be on the hook for around $15,000 per job.
While the promised investment has drawn enthusiastic support for Governor Bill Lee, the move is being criticized from many different quarters.
Tennessee has a poor track record when it comes to clawing back grant monies from companies who have not held up their end of the bargain. Since the grants program inception in the 2010s, at least 70 companies have failed to deliver on their promise of job creation in exchange for government subsidies. This has cost taxpayers millions of dollars.
Sources (not linked above):
About the Author: Paula Gomes is a Tennessee resident and reporter for The Tennessee Conservative. You can reach Paula at paula@tennesseeconservativenews.com.
