Amazon to add 5,000 jobs in Nashville

Amazon.com Inc. plans to make Nashville the home of a new operations hub, the company announced today.

Amazon expects to employ 5,000 people in a forthcoming downtown skyscraper within seven years. At that headcount, Amazon will become downtown's largest private employer — two-and-a-half times the size of Bridgestone and HCA Healthcare Inc. (NYSE: HCA), which currently are tied for that designation. Amazon said its average Nashville job will pay $150,000 a year; for perspective, that's almost 50 percent more than the median household income in Williamson County, the region's suburban corporate headquarters hub.

In its Nov. 13 announcement, Amazon said it will invest $230 million in its forthcoming Nashville office and occupy 1 million square feet of space. In its own news release, Gov. Bill Haslam's office said the jobs will be headed to Nashville Yards, a 15-acre mixed-use development at the site of the former LifeWay Christian Resources campus. According to the state, the so-called Operations Center of Excellence "will house the tech and management functions of Amazon’s Retail Operations division, including customer fulfillment, customer service, transportation and supply chain, amongst others."

In a news conference today, Haslam described the Nashville presence as the executive offices for Amazon's sprawling logistics business. Amazon has four distribution facilities in Greater Nashville, employing about 3,000 people. The company is in the process of opening a fifth facility immediately north of downtown, involving roughly 500 more jobs.

"This is the largest jobs announcement in the history of the state of Tennessee," Haslam said.

Amazon announced that it's poised to receive as much as $102 million of incentives from the state and Metro Nashville tied to its office expansion. Here's how that breaks down:

New operations center is home for 1/4 of WBT workforce

• $65 million cash grant from the state, which will require approval from the General Assembly when it reconvenes next year
• $15 million cash grant from Nashville (the city's standard jobs incentive of $500 per job, per year, for a seven-year period). Metro Council approval is required.
• State tax credits valued at $21.7 million, which will offset franchise and excise taxes that Amazon will owe

Seattle-based Amazon also confirmed plans for additional corporate headquarters in Crystal City, Virginia, and Long Island City, New York.

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The announcements cap Amazon's continent-wide "HQ2" sweepstakes, in which the company received 238 bids for a stated $5 billion "second corporate headquarters" that would have involved 50,000 jobs. At the beginning of this year, Amazon named Nashville one of 20 finalists for that operation.

The announcement also punctuated a year of attention-grabbing recruitments for Nashville. To underscore that point, at 9:30 a.m. Tuesday, Ernst & Young announced a 600-job expansion on Music Row in a press conference at the State Capitol. One hour later, Haslam and others returned to the same stage to make the Amazon announcement. In May, global money manager AllianceBernstein (NYSE: AB) revealed plans to move its headquarters from Manhattan to downtown Nashville.

"Look at AllianceBernstein. Look at EY. Look at Amazon. Every single one of these is seismic," said Ralph Schulz, president and CEO of the Nashville Area Chamber of Commerce, which compiled the region's HQ2 bid. That bid has not yet been made public.

For a business community that typically cheers economic development deals, the scope of HQ2 — as Amazon originally described it — sparked an unusual amount of conflicted feelings. Many CEOs expressed fear that the region couldn't swallow such a mammoth addition of jobs. Others said they didn't want to even try, given how tough it already is to find enough talented employees. In seven of the past 13 months, the region has boasted the lowest unemployment rate of the nation's 51 large metro areas.

"Amazon wouldn't have picked Nashville for this operation if it didn't see the workforce out there," Schulz said. "We have a strong creative workforce, and a lot of in-migration of young talented people."

In that sense, relief mixed with happiness at Amazon's announcement of what is a huge jolt of jobs and yet also far smaller than what could have come.

"Everything about it is the right shape," Schulz said. "I don't have any doubt that Nashville could have absorbed 50,000 jobs over 20 years. But everything about this makes you smile. We feel like it's a pretty perfect outcome."

Amazon plans to start hiring for the Nashville office in 2019. Haslam said the company will temporarily operate from a WeWork co-working space.