Nashville's prize of a new Amazon Operation Center of Excellence, announced November 13, was greeted with jubilation by the state of Tennessee. However, as good as the news may be, the creation of 5,000 new jobs in the near future is not without concerns that center around the need to house and move those workers. The city, however, has gained some experience in that realm over the past few years. Today, with a booming economy and a population growth in the neighborhood of 100 people a day, it welcomes the opportunity to show how well—and how quickly—it can respond to the challenge.
A Happy 'Middle Ground' for Nashville
Although Nashville was once on the short list of possible site's for Amazon's HQ2 with the potential for creating 50,000 new jobs, local officials concede that 5,000 is a much more manageable number for a city that currently only has about 70,000 workers in its downtown area. Even the prospect of 5,000 new jobs is somewhat daunting in terms of growth, stability and quality of life.
The Amazon center represents the largest economic boon the state has ever experienced. Amazon officials, by all reports, were impressed with Nashville's ability to attract new residents to the area, citing the city's ability to provide services to match the growth. Even though Amazon ultimately passed on the opportunity to locate its East Coast hub in Tennessee, it was impressed by the city's ability to attract and retain new residents, according to Jay Carney, senior vice president of the Seattle-based giant.
Amazon expects to recruit from current residents as well as hire from outside the state. The company will receive performance-based incentives that amount to approximately $13,000 per job, based on estimated staffing needs that total 5,000 new employees. Planned operations center on customer fulfillment, supply chain and transportation, with salaries for management and tech-oriented positions expected to average $150,000 annually, noted Carney.
Amazon will receive an initial $65,000 cash grant from Tennessee and an additional $15 million in cash from Metro Nashville over the next seven years, along with a nearly $22 million job tax credit from the state.
Nashville Yards—Challenge and Promise
The site of the new Amazon center will be the forward-thinking project known as Nashville Yards, a vast multi-use complex west of Nashville's downtown and near Interstate 40. With more than four million square feet of "new building space," the revitalization project will include hotels, restaurants, shops, apartments, a music venue and other entertainment facilities. Project architect Joe Bucher with the firm of Gresham, Smith and Partners architect calls the undertaking a gateway project. He notes that the site, with a history as rail center and home to brick, lumber and marble yards, was traditionally industrial.
The future Nashville Yards will focus on green space, pedestrian plazas, bike paths, multi-level gathering spaces and landscaped gardens, Bucher adds.
Nashville Mayor David Briley notes that the new Amazon center, with staffing expected to begin in 2019, will create some major challenges for the city. Nashville has already begun work on traffic improvements to facilitate the added load on the downtown area. But Briley emphasizes that one third of the new Amazon employees are expected to walk or bike to work, a novel projection and a major incentive to make the area as people-friendly as possible.
The mayor and Amazon representatives both confirm that joint efforts are planned to address the looming housing and transportation issues that accompany a corporate installation of this magnitude. Additionally, they agree that Nashville's can-do attitude, available talent pool, and quality of life are among the primary reasons the city was picked.
The Ripple Effect on Housing.
Concern about escalating prices in an area already facing high demand and higher housing prices is a valid one, according to Daren Blomquist, senior vice president at Attom Data Solutions. The national property information company notes that Nashville is already a prime growth market; the saving grace is that Amazon growth will be over a period of years, rather than immediate.
A local broker also notes that, while the Amazon announcement is currently in the news, other companies will also add 1,600 jobs to the booming Nashville economy in the near future. Erin Krueger explains that downtown workers typically want to keep their commute short, opting to live within a 20-minute radius of downtown. He notes that quality of life is "a big deal," adding that housing within a 30-minute drive of downtown is likely to experience the biggest boost.
Currently, there are an abundance of close-in apartments for rent, and the the inventory of available homes for sale is also up. However, the outlook could change with an influx of speculators and investors. Today, the median home price in Davidson County is $265,000.
Right now, Nashville real estate professionals are adopting a wait-and-see attitude, but they know that change is in store for greater Nashville.
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