ECD Hands Out Corporate Welfare to Company Moving to Cleveland, Tennessee

 

The Tennessee Department of Economic and Community Development will reportedly bestow corporate welfare upon a new business in Cleveland, near Chattanooga.

This, according to this week’s Cleveland Daily Banner.

The reported recipient of this money is called Triumph Sheets LLC, an affiliate of Schwarz Partners.

An unnamed representative of Schwarz Partners told The Tennessee Star Friday that no one at the company usually talks to the media.

No one at the Tennessee ECD returned The Star’s repeated requests for comment Friday.

“The Tennessee Department of Economic and Community Development will be providing grant funding through its FastTrack Infrastructure Development Program to assist the Industrial Development Board and the city of Cleveland with the costs of railroad infrastructure rehabilitation, Berry said,” according to The Cleveland Daily Banner.

“As a result, the Cleveland/Bradley County Industrial Development Board, along with Bradley County and the City of Cleveland, will apply for a FastTrack grant for $500,000 from the state’s TDECD to assist with the infrastructure needs of the project.”

In addition, according to the newspaper, “the state will provide $50,000 to offset training expenses, as well as some $2.5 million in job creation, enhanced jobs, industrial machinery and sales and use tax exemption credits.”

Schwarz Partners are based out of Indianapolis, according to The Daily Banner. Company officials manufacture and distribute corrugated paperboard products.

The new facility will reportedly create up to 83 jobs before December 2023 and generate millions of dollars in property tax revenue.

As The Star reported in February, corporations seem to play the Tennessee and Mississippi state governments against one another to get the best corporate welfare deals possible — at the expense of taxpayers in both states.

Companies wait for Tennessee and Mississippi to pony up their incentives. Company leaders can only accept one of those two deals, of course. Then they set up shop in the state that made the better offer. And sometimes these companies move from Tennessee to Mississippi and vice versa — even if they’re only moving as little as 20 miles away.

Then there’s the story of Electrolux.

Tennessee officials announced in 2011 that Electrolux would receive about $137 million in incentives to set up shop in Memphis where it was supposed to bring up to 2,000 jobs.

Former Republican Gov. Bill Haslam pledged $97 million in taxpayer money to the company, while Memphis and Shelby County officials offered an additional $20 million.

As of 2015, Electrolux Memphis had 910 hourly and salaried employees and 483 contract employees.

Members of the Beacon Center of Tennessee, a Nashville-based free market think tank, criticized the arrangement and called it “a prime subject” for their 2011 Tennessee Pork Report.

As The Tennessee Watchdog reported that year, some Shelby County commissioners said they had mixed feelings about government subsidizing big business — but they also said they had no other choice but to go along. If they had not, Electrolux would have built their factory elsewhere.

As The Star reported in March, Bloomberg.com called it “the worst such deal in Tennessee history” after Electrolux officials announced they would shut down their Memphis plant.

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Chris Butler is an investigative journalist at The Tennessee Star. Follow Chris on Facebook. Email tips to [email protected].
Photo “Cleveland, Tennessee” by JonesManagement. CC BY-SA 4.0.