Metro Council unanimously approved a $175 million economic incentive for tech giant Oracle to build a campus on the east bank of the Cumberland River, bringing to fruition a project years in the making.
The Oracle project will bring 8,500 jobs with an average annual salary of $110,000. The company is committing to $1.2 billion in capital investment.
The project was approved despite 11th hour criticisms from Nashville’s progressive community, which said the arrival of Oracle will trigger more gentrification in the surrounding community and stress the city’s existing affordable housing problem.
Mayor John Cooper said passage of the Oracle deal will help kick off “Nashville’s next decade of prosperity.” The Oracle deal is believed to be the largest economic development project in Tennessee’s history in terms of jobs.
“Today’s Oracle vote demonstrates Metro’s commitment to make the right deals for Nashville,” Cooper said. This is the largest private investment and the largest job creation deal in our history – all with no expense in our budget and no new debt. Oracle’s $1.2 billion investment will create thousands of quality jobs and help our kids succeed in the digital economy.”
Under the terms of the deal, Oracle will pay the up front costs of building a bridge, green space, park land and environmental remediation around a long-closed landfill. The company will then be reimbursed by splitting half of the future property tax revenue generated at the property with the city up to $175 million.
The infrastructure expenses are interest-free, making it a better deal than if Metro used the tax collections to issue bonds to pay for the work.
Metro Councilwoman Gloria Hausser, who worked on economic development issues in Georgia earlier in her career, said it was the best deal for a local community she’d ever seen. Hausser heralded Oracle’s commitment to invest in education.
“I hope this becomes the standard that others may follow,” Hausser said. “I certainly see the fact that Oracle has chosen Nashville as big kudos for Nashville because it sets us up to attract more really high quality companies providing high quality jobs to our local citizens as well as those who choose to move here.”
Details of the infrastructure agreement were questioned by Councilman Freddie O’Connell and Councilman Bob Mendes, who asked Cooper’s administration what would happen if the infrastructure costs eclipse $175 million.
Cooper adviser Mike Jameson pointed out that Metro is under no obligation to raise the $175 million cap and has leverage over the company, because an array of future approvals, including zoning, greenways, and other aspects will require city approval.
In response to concerns over affordable housing, Metro Councilwoman Zulfat Suara proposed an amendment expressing the city’s intent to spend half of its portion of the property tax collections on affordable housing. That would amount to about $4.5 million annually once the project comes to fruition.
Councilmember Colby Sledge stressed that the amendment is merely an expression of the city’s intent and not binding. He said the hard work of making the Oracle agreement a successful one will come in the years ahead.
“That capital if left unfettered and unchecked increases inequity,” Sledge said. “We know this. We’ve seen the history in the last 25, 30 years of this country and this city, and most recently in the communities that we serve.”
Proponents of the Oracle deal said the arrival of the Texas-based firm positions Nashville to attract more technology jobs. In recent years, Nashville has passed economic development deals for Amazon and AllianceBernstein.
There’s also hope that the approval of Oracle’s campus will trigger more redevelopment along the east bank of the Cumberland River, including around the Tennessee Titans’ Nissan Stadium property and perhaps extending south to the scrap metal recycling plant owned by PSC Metals.
River North is a 100-plus acre mixed-use development district created by Monroe Investment partners which is controlled by Don Allen and Howard Schiller.
“My partner has been investing in the east bank of Nashville for 20+ years and I am truly excited to see his vision of River North become a reality,” Schiller said.
Monroe will continue to own a significant amount of property at River North after the transaction with Oracle closes.
“This is an exciting day for the State of TN and the City of Nashville”, Allen said. “we look forward to working cooperatively with Oracle and the City and State as River North continues its transformation into a vibrant mixed use environment.”