NASHVILLE, Tenn. - Like an indulgent parent, the state of Tennessee is helping Nissan North America move to a new home.
State and local governments here have ponied up $197 million in tax incentives and financial commitments to bring Nissan's 1,300 corporate employees to the Nashville area from suburban Los Angeles.
That includes $6 million from the state to pay Nissan's rent in a downtown Nashville office building while the company's $70 million headquarters is being built in the nearby city of Franklin, Tenn.
It also includes $63.7 million to cover such relocation costs as flying Nissan's employees and their spouses to Tennessee to hunt for houses.
After their visits, which start in January, employees will have two weeks to make their decisions.
Nissan will submit relocation-related expenses to the state for reimbursement during the move.
Some of the incentives are theoretical. For instance, more than $80 million is offered in job tax credits. But those credits for state and local taxes can be used only to offset what Nissan and the state assume will be Nissan's profits. The credits are spread out over 20 years at a maximum annual deduction, and that deduction expires at the end of each year, says Matt Kisber, commissioner of Tennessee's Department of Economic and Community Development.
"If they don't use it, they lose it," Kisber said. "Frankly, I hope they use they every penny of it, because that will mean that they're very profitable. And Nissan has a history of reinvesting its profits where it operates."
He said Nissan stipulated that it would pay its full share of taxes that fund local education.
Other incentives are standard commitments for large commercial projects, such as the construction of a highway off-ramp to the new Nissan site and a $13 million pledge by the city of Franklin to acquire the land for the Nissan building.
According to figures in a University of Tennessee cost-benefit analysis prepared for the state, the total package amounts to almost $155,000 per Nissan job.
"The relocation consultants we worked with say it's not unusual for a company to have $150,000 per employee in relocation costs," Kisber said.
"These incentives don't cause a company to relocate. But once a company has already made the decision, they might help sway you from one site to another."