Governor to Pull Back from Big Developments Soon-But Not Yet

Governor Phil Bredesen says it’s almost time for the state to back off from big industrial developments and the incentive packages that come with them.

In his budget hearing with the Economic and Community Development Department, Bredesen referred vaguely to two large deals the state is working on now. He said that after those it’s time to “slow down a little bit on the big ones.”

“We’re moving ahead aggressively with Volkswagen and all the halo stuff around that, we’ve got two other major projects we’re working on, there’s always a list of smaller projects, and I’m just saying we’ve got a lot in our pipeline, if we were able to bring all of that to fruition, we’d probably need to–even in good times we’d probably need to step back a little bit and absorb all it is we had.”

The state isn’t sharing any details about either of the large projects that are in the works, but there are indications that one involves the megasite in Clarksville.

The Clarksville-Montgomery County Industrial Development Board has approved a five-and-a-half million dollar incentive package for a development code-named “Project Washington.” Dow Corning Hemlock is openly considering the site for a new semiconductor plant that would employ 500 workers.

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Before the Volkswagen announcement, Tennessee had two megasites-large locations certified by the Tennessee Valley Authority as having the necessary infrastructure to handle a major industrial development. One is now officially taken for the Volkswagen plant, the other is the Clarksville site being considered by Dow Corning Hemlock. In the hearing, Finance Commissioner Dave Goetz made the point that when-not if-the Clarksville site is taken, that will leave the state without any megasites.

There are two possible locations for future megasites, but both require a good deal of work. ECD is in the process of putting together enough contiguous land for a megasite along interstate 40 in Haywood County (between Memphis and Jackson). The site still needs substantial infrastructure improvements to be certified as a megasite, the biggest obstacle being wastewater. ECD Commissioner Matt Kisber estimates the total cost of preparing the site around $125 million. That amount wouldn’t be borne entirely by the state, but the local component will be harder to find than it was in the more populous and affluent communities of Clarksville and Chattanooga. Haywood is one of the poorest counties in the nation. The state is trying to bring surrounding communities on board with the idea that the megasite would benefit the entire region. The city of Jackson has shown some interest in helping, the city of Memphis is more lukewarm.

The other site is Kate’s Landing Port, on the Mississippi River. The major stumbling block there is the lack of an industrial gas line. At one point, ECD was working with nearby local governments to create a municipal gas authority which could pay for the line with surcharges. But the price of industrial gas lines has gone up dramatically, to the point that the gas authority idea no longer makes business sense.