A new Tennessee law that takes effect in July will ban “community benefits agreements” for companies that have received state economic incentives. It arrives seven years after the state’s first such agreement — a contract between Nashville Soccer Holdings and the nonprofit Stand Up Nashville that ensured community investments as Major League Soccer expanded to Nashville.
The agreements, often known as CBAs, are binding contracts that corporations work out with neighboring residents to address local concerns. There’s no exact blueprint for a CBA, but they can include things like a wage floor, promises to protect the environment or commitments to build affordable housing.
CBAs restricted
Tennessee’s new law isn’t a blanket ban on all CBAs — but it is for companies that will receive future incentives or tax breaks from the state.
“We have so many corporations in the state — like Ford, like Tyson, like Nissan, like FedEx, International Paper — and if they want to, they bring a host of jobs and other benefits to the state,” said State Sen. Raumesh Akbari, who opposed the legislation, during a Senate hearing in March. “If they want to make the decision they feel is best for their private company and their stakeholders and their shareholders [such as sign a community benefits agreement], they will not be allowed to do that.”
Many companies have received economic incentives from the state: General Motors received a $35 million economic development training grant for its electric vehicle facility at their Spring Hill plant. Oracle was granted a $65 million grant in 2021 for its new Nashville campus. The Tennessee Titans were issued a $500 million one-time state contribution for its new stadium.
And, there’s Ford — which is in the process of constructing its $5.6 billion mega-campus, BlueOval City, in West Tennessee. In 2021, the legislature approved a $900 million incentive package.
The manufacturing plant, which will include electric vehicle and battery manufacturing facilities, as well as a railyard connection and wastewater treatment plant, will sit on 3,300 acres of farmland. It’s situated near the small towns of Stanton, and Mason a majority Black town, which was in the news several years ago over its finances.
Page Walley, the state senator who represents the region around BlueOval City, said early on that he had reservations. However, he ultimately supported the new law, citing the investments Ford was making in the community without the requirements of a binding community benefits agreement.
“They [Ford] have been extraordinarily active in engaging with communities to build parks, to expand the Boys and Girls Clubs, to vitalize neighborhoods, to prepare workforces,” Walley said. “But they’re doing it voluntarily out of their own initiative, through their foundation.”
‘It will take more dollars’
Walley’s opinion is at odds with some neighboring residents. As the plant nears completion, a coalition of labor and faith leaders has formed. The group, called Blue Oval Good Neighbors, has been urging Ford to commit to a CBA.
“I think many times people believe that in small towns, people will just accept chump change or crumbs,” said Rachel Wilson, a member of Blue Oval Good Neighbors. “They [Ford] have received billions of dollars for this plan. And they’re investing back less than 1% back into the community. And so, for Ford to address all that we are concerned about, it will take more dollars.”
Wilson grew up in Fayette County, just south of the new plant. Early on, she says she was excited about Ford coming to the area and the economic opportunity it would bring her community. Her feelings began to shift when she saw the impact it would have on her neighbors.
“A huge benefit of living in a rural area is lower cost of living, but with such a big development coming, rent and housing prices have went up,” Wilson said. “You want to see the area you live in grow, but you don’t want it to grow in a way that the whole community just changes.”
Blue Oval Good Neighbors has been asking for a CBA that would:
- ensure local hiring;
- establish a minimum wage of $30 per hour;
- establish a community oversight board;
- provide “replacement land” to Black farmers who have lost or sold their land;
- develop affordable housing and provide other supports to offset to the increased cost of living;
- invest in community centers;
- document the region’s Black agricultural history through a cultural preservation project, and;
- provide environmental and water protections.
Instead of committing to the CBA, Ford has launched its “Good Neighbor Plan” — a pledged $9 million dollar investment into the community. It includes things like investments into community centers, playgrounds and farmers markets; rental assistance for families experiencing “temporary hardship”; after-school programs and a childcare facility; literacy programs; restoration of a historic schoolhouse in Stanton; and various environmental commitments — like a stream restoration project, litter cleanup campaigns and groundwater monitoring wells.
“We have worked diligently to hear directly from residents, community leaders and government officials who have been elected to represent the communities near BlueOval City,” a Ford spokesperson told WPLN News. “Residents can see that their feedback has been incorporated in the Good Neighbor Plan, which is a $9 million investment into the communities around BlueOval City. What we hear most from residents is that they want to speak for themselves. Ford has been contacted by many groups that say they speak on behalf of residents, many of which are not from the area. It would not be feasible for us to engage with every third-party group that purports to speak on behalf of residents.”
But, without a legally binding deal, Wilson says the commitments lack accountability.
“They can easily back out and say, ‘Hey, we’re gonna pull out of Tennessee altogether,’ ” Wilson said. “But everything — all the impact of them coming — will still be here.”
With the new law set to take effect July 1, Blue Oval Good Neighbors is continuing to pursue negotiations with Ford. Because Ford received their economic incentives before the law change, Ford can still sign a CBA without impacting those dollars. However, any future incentives Ford may receive from Tennessee would be subject to the law.
It could be a long road ahead. And even if residents are able to get an agreement on the table, the work wouldn’t stop there.
Tennessee’s first CBA
Take Tennessee’s first community benefits agreement: it was signed in 2018, as part of the effort to bring Major League Soccer to Nashville. While the stadium did receive economic incentives from the city, it did not from the state — meaning it would not have been banned under the new law.
Community group Stand Up Nashville led negotiations. Its executive director is Odessa Kelly, who says that managing the execution of the agreement has been stressful.
“It was a city effort to get this CBA passed. But it seems like it’s standing just on the shoulders of Stand Up Nashville, you know, to enforce this,” Kelly said. “We never envisioned that it would just be a couple of local organizers who are having to fight against skillfully trained lawyers every day to ensure that this is happening.”
The CBA was wide in scope: there were hiring and wage requirements; the development of affordable housing and retail space; community soccer programs; an on-site childcare facility.
An advisory committee meets monthly to keep tabs on the terms, and the public can attend meetings on a quarterly basis.
Kelly has some lingering concerns — including about the leasing manager for the housing. At a CBA community meeting in April, members said people who applied for the housing had issues. Some felt it was difficult to apply, while others never heard back.
Committee members said they were working to improve the application process, and had heard from applicants that “things had gotten better.”
Kelly is also worried about the execution of “micro-unit” retail spaces for artisans and small local businesses. The CBA requires that a 4,000-square-foot space is dedicated to these units.
“Soccer is the most diverse sport on earth and we wanted to ensure that it didn’t become a place where all the commerce around it was just honky-tonks,” Kelly said. “We wanted to create a space where Black and brown community members and vendors and business owners had a space to be.”
At the April meeting, the advisory committee said they were struggling with a clause in the CBA that required that the retail space wouldn’t compete with the flea market vendors at the neighboring Fairgrounds Nashville. The committee is now working with the Arts and Business Council to envision a concept for the space that doesn’t violate that clause.
Kelly says these resulting plans are different than the original vision for the space. She says it’s because the wording of the CBA “wasn’t perfect.” If given the chance to construct a CBA again, she says, “we’d do it a lot better.”
Despite these concerns, Kelly says the CBA is on track and that Nashville SC is holding up its end of the deal.
The CBA has required the club to approach some operations differently.
“Most venues in Nashville or stadiums in Nashville arenas don’t have the same requirements that we do,” said Nashville SC Chief Business Officer Lindsey Paola. “It’s not a burden, it’s just thinking about things from a different angle.”
Many of those differences have to do with hiring and wages. The CBA established a wage floor of $15.50 per hour (it has since been raised to $20-23), plus a hiring and workforce development program that helps jobs go to those most in need. Nashville SC directly hires the employees that work at the stadium, rather than outsourcing to another company.
Kelly and Paola both agree the program has been a major win.
“It’s a good wage for a part-time job and we get to employ lots of people,” Paola says. “I love being able to walk into the stadium and it’s the same people every time and they all know my name and I know their names and we all say, ‘Hi.’ You wouldn’t necessarily have that if you outsourced all of your part-time staff.”
At the end of the day, Kelly says, without the CBA, Nashville might not have the team at all, citing some elected officials who she believes wouldn’t have voted in favor without it.
“Historically, stadiums, they deplete the resources of a city. They don’t add to it,” Kelly says. “So, Geodis is an example of — just because of the community benefits agreement — we can justify that stadium being a public good.”
Out in West Tennessee, that’s not the case. Three years into construction, Ford’s BlueOval City will progress regardless of a community benefits agreement. But that doesn’t mean residents will stop trying to secure one.
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