Tennessee political observers are questioning whether former commissioner of Tennessee Economic and Community Development (TECD), and current Republican candidate for governor, Randy Boyd used his previous office as a platform to prepare a gubernatorial campaign by directing state grants to local officials and businesses who might, and in many cases have, support his run for governor.
One example cited by those observers involves State Senate candidate Shane Reeves.
In July 2016 Randy Boyd, then-commissioner of TECD, approved a $1 million “Fast Track Economic Development Fund” grant for Murfreesboro based TwelveStone Health Partners, whose founder and and CEO Shane Reeves is a candidate for the Republican nomination in the 14th District State Senate special election prompted by the resignation of State Senator Jim Tracy (R-Shelbyville).
Soon after Boyd left his state position to run for governor, the Reeves Family PAC, which lists Shane Reeves as the sole officer, donated $5,000 in April, 2017 to the Randy Boyd gubernatorial campaign. Reeves also personally endorsed Boyd during a campaign stop in Murfreesboro that same month.
Randy Boyd resigned as commissioner of TECD in January 2017 and announced his candidacy for the Republican nomination for governor in March.
In October, the Randy Boyd for Governor campaign announced that “50 of the 95 county mayors in the state, and 109 mayors across Tennessee, have now publicly endorsed the Knoxville businessman, former state economic and community commissioner.”
Reeves confirmed to The Tennessee Star in an emailed statement on Sunday that TwelveStone Health Partners received the grant, though he did not confirm the amount of the grant — the $1 million reported in TECD documents.
“Yes, TwelveStone Health Partners received a workforce development grant from the Rutherford IDB via TECD,” Reeves told The Star.
“As part of it, I committed to adding up to 200 jobs in Rutherford County and across the state of Tennessee over the next 5 to 7 years. All of these jobs combined would add around $8 million annually in payroll dollars. I am very thankful for economic development teams in both Rutherford county and the state of Tennessee that are so committed to recruiting new companies to our great state and to helping existing companies expand,” Reeves continued, adding:
TwelveStone Health Partners is a pharmacy that specializes in providing pharmaceutical products and services to our regions sickest and most vulnerable patients. I am truly blessed to be the CEO of this company and to be surrounded by such an amazing team of clinicians and operators.
As an aside, I’m fairly certain that if you study the business background of Donald Trump that you will find that he has worked with a number of cities, counties, and states (And their economic development department) to develop his real estate empire and provide thousands of jobs. I look forward to following in his footsteps as a public servant with significant business background.
A search of the TECD website indicates (see results to the left) that the $1 million grant had a “landed date” of February 16, 2016, for the purpose of “Recruitment” and that 200 jobs were promised as part of the grant.
The grant category was described as “ED: FastTrack Economic Develpment Fund: Provides additional grant support for companies expanding or locating in Tennessee with reimbursable grants made to local industrial development boards.”
A TECD document (see below) shows that a $1 million “ED” grant, ID #5761, was approved on July 7, 2016 by TECD with the IDB Rutherford County as the grantee/location and “TwelveStone Health Partners, Inc.” as the “Industry” with a “Commit Year” of 2017.
Five months earlier, in February 2016, Reeves, Boyd, and Gov. Bill Haslam announced that TwelveStone Health Partners was investing $14.9 million to build a new corporate headquarters in Murfreesboro in a statement released by TECD:
Tennessee Gov. Bill Haslam and Economic and Community Development Commissioner Randy Boyd along with TwelveStone Health Partners officials announced today the company will build a new corporate headquarters, expanding its Murfreesboro operations.
The headquarters will consolidate the company’s corporate, logistics, billing and service divisions. TwelveStone, formerly Reeves-Sain Family of Medical Services, will invest $14.9 million and create 200 new jobs.
“We appreciate TwelveStone Health Partners for its ongoing commitment to Tennessee and creating 200 new jobs,” Haslam said. “The momentum of Tennessee’s healthcare industry is strengthened not only when companies locate in our state, but also when they decide to expand and grow here. We congratulate TwelveStone on today’s announcement and thank the company for bringing us one step closer toward making Tennessee the No. 1 location in the Southeast for high quality jobs.”
At the time the promise of 200 new jobs was made in February 2016, TwelveStone Health Partners was a newly formed organization. According to its website archived from February 18, 2016, the company already employed a management team of 19 people.
No mention was made in the media at the time–or at any point by any other media outlet until this report in The Star— of the $1 million TwelveRivers Health Partners was scheduled to receive from the TECD, whose commissioner at the time was Boyd, as a reimbursable grant.
The Industrial Development Board of Rutherford County, which received the grant from TECD and paid the “reimbursal grant” funds to TwelveStone Health Partners, apparently some time in 2017, responded immediately to inquiries from The Star on Friday.
“I represent the Industrial Development Board of Rutherford County, Tennessee. Chairman Jones forwarded your inquiry to me for response. The Board makes it a policy not to comment on inquiries, but I do have records responsive to your request. I would be happy to make them available,” G. Sumner R. Bouldin, Jr., a partner in the Murfreesboro law firm of Bouldin Reed & Bragg, PLC, told The Star.
“[We] will send to you the document that is most pertinent to your inquiry,” Bouldin added.
“There are a few others, but we cannot redact the bank account and EIN information in time to get them to you by the close of business today,” he noted.
The Star anticipates receiving those additional documents from the Industrial Development Board of Rutherford County shortly.
You can see the document, the original grant application submitted to TECD by TwelveStone Health Partners, provided to The Star by the Industrial Development Board of Rutherford County below:
[pdf-embedder url=”https://tennesseestar.com/wp-content/uploads/2017/11/FastTrack-App-12-Stone.pdf” title=”FastTrack App 12 Stone”]
The use of proceeds in that original application was for “construction,” not “workforce development.” Specifically, the $1.6 million requested in that grant ($600,000 more than was finally approved by TECD) was to be used for “building improvements” and “building retrofit” expenses incurred as part of that new headquarters construction.
According to the Tennessee Economic and Community Development Department (TECD) website, FastTrack Economic Development Fund grants should be “only used in exceptional cases where the impact of the company on a given community is significant.”
The Star asked the Boyd campaign how Mr. Boyd determined, while serving as the commissioner of the TECD in 2016 that giving the $1 million “Fast Track Economic Development Fund” grant fit the requirement of an “exceptional cases where the impact of the company on a given community is significant,” but did not receive a response.
In September 2017, TwelveStone Health Partners submitted a “baseline report,” signed by the company’s Chief Operating Officer, to TECD that the company employed 122 workers, 78 below the 200 promised in the grant application. The baseline report referenced TECD grant number 50637, not the grant ID number 5761 referenced in the Third Quarter 2016 report shown earlier in this story.
You can see that baseline report here below:
[pdf-embedder url=”https://tennesseestar.com/wp-content/uploads/2017/11/baseline-report-twelvestone-health-partners.pdf” title=”baseline report – twelvestone health partners”]