Power Poll Bullish on Nashville's Economy
But divisions underlie our economic development strategy
Power Poll is decidedly gung-ho with regards to Nashville's 12-month economic outlook. Over 70% of respondents to the September Power Poll survey rate themselves as "bullish" or "somewhat bullish." A paltry 9% rate themselves as "bearish" or "somewhat bearish."
Nearly 60% "definitely think" or think there is a "good chance" that the city will land a major-league corporate relocation or expansion here in the next year, along the lines of an Oracle or Amazon.
As to the performance of the city's overall economic development efforts, Power Poll members were sharply divided. Almost equal numbers rated the city's efforts positively as did those who rated it negatively. See our analysis below for more background on this issue, where we will explore the revolving door of Metro economic development officers, morphing relationships between the Nashville Area Chamber and Metro Council and/or mayor, and a debate within the city as to whether we should focus on building up small businesses or luring in big new ones.
Here are the specific questions and answers from the most recent Power Poll.
We are an economically confident city right now.
One could sense that in the Power Poll comments section. Melissa Hudson-Gant, the CEO at Big Brothers Big Sisters of Middle Tennessee, voiced what seemed an overriding sentiment: "As a nonprofit leader whose revenue is generated through individuals, corporate partners, and state/federal funding, I am optimistic about our region's economic outlook.... Our new corporations are proving to be good neighbors and committed to building community."
(Many, however, bemoaned the costs of growth—congestion, traffic, lack of affordable housing—and the inability of the city to keep up with the demands on infrastructure. That said, we were asking about economic development, not other public policy considerations.)
One would think, with such a go-go track record in recent years, and such a rosy Power Poll outlook, that we would give our local team (the Chamber and Metro economic development officials) high marks. But Power Poll members are split – 38% give it a positive rating, 39% a negative, and 17% are in between those poles.
Metro's office of economic development has always been small, but critically important, acting as a bridge between the mayor's office and the business community and Chamber of Commerce. It was usually a one-man show. Rather than hire its own staffers to fill in the blanks, Metro has relied on the Chamber of Commerce to augment its efforts and made annual funding contributions of varying amounts. Generally speaking, the Chamber performed as asked. Going back to the 1990s, the city's big, splashy, important growth initiatives were Chamber-driven. Anyone remember the first Partnership 2000? Big businesses in Nashville dug deep (as did many medium- and small-sized businesses), contributing millions to the Chamber's economic development efforts. It wasn't Metro taxpayers financing our economic development to any great degree. It was the private sector and the Chamber.
If the Chamber and Metro's economic development office tag-teamed the daily assault on potential businesses relocating here, there have certainly been other important actors who remain important today. They include the state's own economic development office, the mayor of Nashville, and TVA.
Take the mayor. When Phil Bredesen was mayor, he was intimately involved in bringing the Titans and Dell to Nashville. A CEO who is relocating to Nashville always wants to meet the city's mayor to take his temperature. So, it is critical that a mayor wear an economic development sales hat if there is to be progress on the economic growth front.
As to the state's office of Economic and Community Development, most would argue that it has been a highly effective machine. More often than not, it has filled its top commissioner position with some veritable hosses with serious business cred. Until recently, the commissioner was the gregarious Bobby Rolfe, who held the top role for three years before turning the department over to entrepreneur Stuart McWhorter, son of the late health care scion. Lest anyone forget, our current junior U.S. senator, Bill Hagerty, occupied the commissioner position from 2011 to 2014.
As Joe Hall, owner of Hall Strategies, mentioned in the Power Poll comments section, "The state has been the driving force for the relocations of the big names you're talking about." He is referring to Amazon, Oracle, and AllianceBernstein. In this, Hall is largely correct, and the Republican Haslam and Lee administrations have been at the forefront of landing big fish, often, they would argue, while facing headwinds from Metro officials as they sought help in sealing the deals.
Finally, less known but very important, is TVA’s contributions. Going back to the very days of its founding, TVA was assigned an economic development role that has stayed critical and relevant.
Adding to the complicated picture of so many players is that Nashville Mayor John Cooper takes a decidedly different approach to economic development from those at the state level. Cooper is not aiming for the big fish by offering relocation incentives. His approach has raised eyebrows among more traditional businesspeople and flat-out angered others.
Last week, Cooper announced his third economic development chief in just about as many years. She is LaTanya Channel, who formerly worked at the Small Business Administration. At the time of her hiring, Cooper also renamed the office. It is now the "Mayor's Office of Economic Growth and Small Business Development," as opposed to the "Mayor's Office of Economic and Community Development." Words matter.
Since she is so new (not just to the job but to Nashville), we know less about Channel than we do about her predecessor, Courtney Pogue, who lasted 14 months in his post. Pogue made it his mission to set the city's sights on small business stability and growth, being guided by his philosophy that neighborhood wellness, public safety, affordable housing, and so many other pressing urban issues will not be helped by the Amazons and Oracles of the world, but by small businesses instead. After all, it is small businesses that are distributed and rooted throughout our urban grid.
This neighborhood-centric attitude is also Cooper's philosophy and presumably Channel's as well. We all know that Cooper has a deep antipathy to granting tax breaks and other incentives to large corporations relocating here. Or to companies expanding here. It is what got him elected to begin with.
Meanwhile, any discussion of the economic development playing field of course includes the aforementioned Chamber of Commerce. The Chamber has been presided over for many years by community kingpin Ralph Schulz, who has demonstrated a willingness to leap into public squabbles on behalf of his membership. Witness his spearheading the multi-billion transit referendum under former Mayor Megan Barry. At the last minute Schultz took command of the campaign but it ultimately failed. And witness his critical comments about public education in Nashville in recent years. That earned him a stern rebuke from Metro Council. This year, Metro Council cut the $175,000 status quo contract with the Chamber to $76,300. (Meanwhile, it's worth noting, as Power Poll member Jim Schmitz of Elliot Davis Business Solutions pointed out in Comments, that $76,300, or even $175,000, "doesn't come close" to covering the costs to the Chamber of providing economic development efforts to Metro; the real costs have been significantly borne by the business community.)
For all of these reasons and more, it's clear why some Power Pollers think our economic development efforts are good, and some think they are not. The fact is, to be blunt, those tasked with bringing businesses here, or helping existing businesses grow, are different people with very different ideas and roles. It is fair to characterize the state's ECD office as Republican and very plugged in to Nashville's elite business circles. The state's ECD office is also operating at a time when Nashville is the state's economic jewel. The state's ECD office has also found it problematic in communicating with a mayor's office that has no desire to offer perks or incentives.
At the same time, it is fair to characterize Metro's own economic development office as not being guided by big business relocations. Our city's economic development office is not on a first-name basis with the city's top businesspeople and its wealthier classes. Our city's approach under Cooper is instead grounded in how capitalism can drive better neighborhoods, higher standards of living for the poor, improved health outcomes among the sick, and similar metrics.
Which is not to say that either party here is wrong. Everyone just appears to be on different planets. This is a simplification, but one goes big, and one goes small.
In an interview with Ralph Schulz, he described the situation as not being problematic or fraught with tension. "Economic development is a team sport and at different moments in time, different members of the team take on different roles. So if there's an emphasis on small business development by one member of the team, then other members of the team will increase their emphasis on larger targets."
In conclusion, perhaps we shouldn't be dealing with an "either-or" argument. Both parties can be right. We just need some balance and we don't necessarily have it right now. Janet Miller, the CEO of Colliers Nashville who formerly served for 21 years as the Chief Economic Development Officer at the Chamber, had some wise words on the matter. "I am all about small business. I chair the Entrepreneur Center for gosh sakes. But I think we need a balanced approach that includes several strategies, including big business recruitment, business expansion support, workforce development, and yes, entrepreneurial/small business support. We should have multiple components in our plan, not a plan that sets a narrow focus on small business. I mean, the philanthropic engine of Nashville is still fueled by large corporations like Nissan, Bridgestone, Amazon, and others. They are extraordinary additions to our community."
About Power Poll: Power Poll asks questions of the most powerful, influential people in U.S. cities. It is not a scientific survey. But because the people responding to the surveys comprise the leadership structure of their cities, the results afford a fascinating glimpse into the thoughts, opinions, and beliefs of those in a position to make change. Power Poll is distinctly nonpartisan.