KINGSPORT - The state of Tennessee had to put "an ante on the table" - an economic development incentive package coupled with a work force education component - to help make Eastman Chemical Co.'s Project Reinvest a reality, Gov. Phil Bredesen said Thursday.
"I think anything you can do ... to preserve a company which is vital to the economy of Northeast Tennessee, which is rewarding investment and the creation of stability and I think, ultimately new jobs, is worth the state being a partner in that investment," Bredesen told reporters after Eastman Chairman Brian Ferguson announced the company's $1.3 billion effort to upgrade its Kingsport operation over the next five years with the help of $100 million in state tax credits, plus $1 million in state dollars to launch a job training partnership between Eastman and Northeast State Technical Community College.
Bredesen admitted other states are "more aggressive" using economic development incentives.
"We have a sensible approach to this that is competitive with other states and allows this company to make this investment here and not have to go elsewhere," the governor said. "I would say in general Tennessee is in the middle to slightly below the middle of the pack in terms of tax incentives. We certainly are nowhere near as aggressive as typically Mississippi or Kentucky are in what they do. I always felt it was something where you need to put an ante on the table to not be rejected for consideration at the outset but that ultimately the more important thing was to talk about the work force."
Bredesen said he could not compare the incentives offered to Eastman with the deal the state gave Nissan to relocate its corporate headquarters from Southern California to Middle Tennessee in 2005.
But, he noted, tax incentives are "standard procedure" in economic development.
"You cannot like them, but that's the reality if you want to have these kinds of investments in your community," Bredesen said. "The state has got to step up in some fashion because that's the way the world is today. ... This is an investment in the longevity of the company. ... The frosting on the cake is talking about growing it in the future."
Bredesen said Eastman's decision will also cause relocating companies - in the nation and those moving abroad - to take notice.
"I think this will really turn people's heads when you say a major Fortune 500 company like this is making that kind of commitment to this area," he said. "I think it will have a big halo effect. It's exactly the kind of thing you're trying to achieve with these investments."