2006 America's 50 Hottest Cities

SOURCE: Expansion Management — 01/26/06

Nashville Is Sweet Music For Expanding Companies

Successful companies know how to turn a negative into a positive. Organizations that try to attract expanding companies know how to do the same thing.

When the Country Music Association decided to take its annual awards show from Nashville, Tenn., to New York City last year, Music City officials did not sit around and lament the loss.

Instead, they viewed the situation as an opportunity for Nashville to gain exposure in the Big Apple. The Nashville Area Chamber Of Commerce organized a business recruiting mission tied to the awards show. About 250 site location consultants and business prospects were treated to a lunch that featured some of country music's biggest stars.

It was just one example of how the Nashville metro uses its assets — country music has been one of the city's biggest assets for decades — to attract relocating companies. And the metro has raised business attraction to an art form during the past three years.

During that time, eight $100 million-plus revenue corporations have moved to the Nashville metro, several 1 million square foot distribution center operations have begun operations and, at a time when many metros are hemorrhaging because manufacturing operations are shutting down, Nashville continues to pick up such operations. Plus, numerous 100- and 200-job expansion projects continue to flock to the metro.

"The fact that our economy is diversified has helped us keep good, steady growth," said Janet Miller, senior vice president for economic development for the Nashville Area Chamber of Commerce. "We haven't been on any wild swings. It is critically important to diversify because industries ebb and flow. We try to predict what is going to happen but none of us really knows."

During that time, eight $100 million-plus revenue corporations have moved to the Nashville metro, several 1 million square foot distribution center operations have begun operations and, at a time when many metros are hemorrhaging because manufacturing operations are shutting down, Nashville continues to pick up such operations.

The Nashville strategy has been successful, to say the least. That success has led prominent site location consultants to give the metro the No. 1 ranking in Expansion Management's eighth annual "America's 50 Hottest Cities" listing. It is the second consecutive year that the Middle Tennessee metro has been selected to the top spot.

Expansion Management surveyed more than 80 site location consultants in order to find out which cities their clients find most attractive when it comes to selecting an expansion or relocation site out of the nation's more than 360 metropolitan statistical areas. The consultants, whose identities remain confidential, were asked to take into consideration factors such as business climate, work force quality, operating costs, incentive programs and the ease of working with the local political and economic development establishment.

Top 10 Hottest Cites

  1. Nashville-Davidson-Murfreesboro, Tenn. MSA
  2. Phoenix-Mesa-Scottsdale, Ariz. MSA
  3. Atlanta-Sandy Springs-Marietta, Ga. MSA
  4. Dallas-Fort Worth-Arlington, Texas MSA
  5. San Antonio, Texas MSA
  6. Charlotte-Gastonia-Concord, N.C.-S.C.
  7. Memphis, Tenn.-Miss.-Ark. MSA
  8. Jacksonville, Fla. MSA
  9. Knoxville, Tenn. MSA
  10. Birmingham-Hoover, Ala. MSA

Success Breeds Success

When a company decides to relocate to the Nashville metro, officials quickly try to recruit its executives onto the team trying to attract the next investment.

"When we have success, we try to fold the leadership of that company — be it a 30- or 1,000-person operation — into our sales team," Miller said.

Jim Beard, president of Caterpillar Financial Services Corp., helped convince Bret Comolli, CEO of Asurion Corp., to relocate to Nashville three years ago. Comolli, in turn, helped convince Carlos Ghosn, CEO of Nissan, that Nashville was the right place for the automaker's North American headquarters facility.

Nissan announced in November that it will relocate the headquarters facility and 1,300 jobs from Los Angeles to Franklin in the Nashville metro. The relocation will begin later this year, with Nissan temporarily moving to downtown Nashville while it builds a permanent facility in the Cool Springs area of Franklin.

The automaker has a 25-year history in Tennessee, with plants in Smyrna and Decherd. Those two plants employ more than 8,000 workers. Nissan's plant in Canton, Miss., is less than 450 miles from Nashville.

Currently, Nissan employees are deciding whether to relocate to Nashville. The automaker hopes for a 50 percent retention rate, said Fred Standish, director of corporate communications for Nissan North America. Once in Nashville, the company will begin hiring to fill the vacant positions.

"Resumes started coming in the day after we made the announcement (Nov. 10)," Standish pointed out. "We're confident that we will find the work force we need in Nashville."

Standish said that employees that make the move from California will find a high degree of quality of life in Middle Tennessee.

Tom Jurkovich, director of the Office of Economic Development for the mayor of Nashville, said there are few cities in the country where one will find a number of attractive qualities in one location, including centrality of location, a solid transportation infrastructure and a high number of colleges and universities.

"We've achieved a quality of life that makes Nashville attractive to raise a family," he said. "This equates to a conducive environment to do business. There was time when we treated those concepts separately. But with the mobility of the work force, what businesses are looking for is an environment where they can attract talent that wants to have a quality setting to raise their families."