Tennessee Named Business State of the Year: By Dave Flessner, Chattanooga Times Free Press

January 6th, 2015

Tennessee was rated the best state for economic development again last year, the first state to win back-to-back honors as the State of the Year from Business Facilities magazine.

The business publication recognized the Volunteer State on Monday for its educational improvements, its automotive industry growth and its location and infrastructure.

"Tennessee is one of a handful of states that have clearly made economic development priority No. 1," said Jack Rogers, editor of the Tinton Falls, N.J.-based Business Facilities magazine. "With a powerhouse automotive cluster, world-class infrastructure and the nation's most improved education system, we could be looking at a State of the Year dynasty in the making."

Tennessee becomes the first state in the award's history to win back-to-back honors for economic development efforts and the first state to win the designation three times, winning in 2014, 2013 and 2009.

Last year, the state Department of Economic and Community Development worked on projects that are expected to generate more than 24,000 jobs -- the highest annual job total ever. The 2014 total surpasses the previous record set in 2013 when the state estimates new and expanded business investments announced that year would generate more than 23,000 jobs.

The biggest project announced in 2014 in Tennessee was the Volkswagen Group of America's Chattanooga expansion, creating 2,000 jobs with an investment of $900 million, including $600 million in Chattanooga. Other major projects were Under Armour's new Mount Juliet fulfillment center, creating 1,500 jobs with an investment of more than $100 million; SL Tennessee's Clinton expansion, creating 1,000 jobs with an $80.5 million investment, and Conduit Global's new Memphis call center, creating 1,000 jobs with an $8 million investment.

Bill Hagerty, the state's chief economic recruiter, said Tennessee has attracted more than $15 billion of business investment in the first four-year term of Tennessee Gov. Bill Haslam, R-Tenn., and the growth as accelerated each year. Hagerty, who is stepping down at the end of next week as head of the Department of Economic and Community Development, said he expects 2015 will be an even bigger year for new jobs and investments in the Volunteer State.

"Our historic wins validate the incredible momentum, fierce competitiveness and promising future that Tennessee possesses and emphasizes our intense focus on recruiting expanding and new companies," Hagerty said.

The gains came even as the staff of Hagerty's department was cut by more than 40 percent. The outgoing commissioner said he focused the department's resources on strategic areas of growth for Tennessee, including the automobile industry, logistics and music, among others. The department also created nine regional offices to better localize state support for recruitment activities.

Hagerty said Tennessee's central location and early success with Nissan has helped make the state a leader in the Southern automotive industry with three major auto assembly plants in the state -- Nissan in Smryna, GM in Spring Hill and VW in Chattanooga -- and more than 400 automotive supplier companies.

"These investments, especially in major new plants like Volkswagen, should generate far more jobs from suppliers to these new facilities," Hagerty said.

Business Facilities has named Tennessee the top state for "Automotive Manufacturing Strength" for four of the past five years.

"From an improvement standpoint, Tennessee has done very well and businesses we talked with are starting to recognize that," Hagerty said. "Businesses want to make sure that we are committed to delivering the workforce that they need, when they need it, and that's where the "Drive to 55" and the "Tennessee Promise" have really distinguished our state."

Haslam has set a goal of getting at least 55 percent of the adult population to earn some type of higher education degree and is offering free tuition to qualified high school graduates to attend a 2-year community college program.

We will continue doing all we can to make sure we offer an attractive business climate and skilled workforce to be the No.1 location in the Southeast for high quality jobs," Haslam said in a statement Monday.

Tennessee finished first in the "Education: Race to the Top" category by Business Facilities and was second in "Best Infrastructure."