Nashville, one of America’s fastest growing cities, is about to get a lot bigger.
Online shopping giant Amazon announced in mid-November that it had chosen Nashville for its Operations Center of Excellence. Amazon plans to invest $230 million in the new site, which will focus on management, logistics and software development for the company. The site will bring an estimated 5,000 new jobs to Nashville with salaries averaging $150,000, according to the Tennessean.
Professor Emeritus in the Vanderbilt Department of Economics Malcolm Getz says Nashville’s international airport and recent population growth make Nashville a good fit for the new hub.
“That means there’s a diverse population so that Amazon should be able to attract workers from around the country with various ethnic backgrounds, immigrants from Europe or wherever they’re able to recruit talent,” Getz said. “Nashville should be a welcoming city.”
The new operations center will be located in Nashville Yards, a commercial site located on Broadway near the Frist Art Museum.
According to the Tennessean, the state of Tennessee and the city of Nashville together offered Amazon around $102 million in incentives, which include cash grants worth about $13,000 per job and additional tax credits. This type of bidding for company sites has become commonplace in recent years.
“It is now standard practice for businesses to expect that cities and state governments will make significant subsidies available,” Getz said. “Then all the cities will respond, and Amazon will typically choose the site that they would have chosen if no cities offered subsidies. They simply choose the site which maximizes profit and pocket the subsidies.”
Amazon’s decision may bring some negative consequences for Nashville. The 5,000 new jobs are expected to add to the influx of newcomers, which the city is already struggling to accommodate. What’s more, Amazon’s high projected salaries may hurt other businesses in the area.
“All the employers within a few miles of downtown will have to increase their salaries in order to maintain the standard of living for their workers,” Getz said. “That will put pressure on other businesses in Nashville to decide whether Nashville will continue to be an attractive place for them to do business. Some may move away because it becomes too costly.”
Some Vanderbilt students question whether Amazon’s move will benefit them, particularly when it comes to Nashville’s already high housing prices.
Junior Keaton Butowsky, an economics major and Vice President of Professional Activities for Delta Sigma Pi, Vanderbilt’s Professional Business Fraternity, predicts students might struggle to find affordable off-campus housing because landlords will have more demand for their apartments.
“They might be thinking, “Why are we going to rent to a student that will only be here for nine months if we can give the same apartment to a young professional that just got out of college and is planning on being here for a few years?” Butowsky said.
Senior Shawn Kim feels uneasy about the increase in gentrification that may result from the new hub.
“There’s already a lot of gentrification that’s happening across Nashville,” Kim said, “and a lot of people can’t find affordable housing. The income for the rest of Nashville isn’t going up, but the housing and standard of living is.”
Nevertheless, Amazon’s decision signals positive development for the city as well.
“[Amazon executives] are highly educated people, thoughtful people, community-minded people often, and I certainly hope they’ll be supporting a higher level of spending on public schools and on our park systems and our public libraries—all those types of amenities ought to show progress,” Getz said.
According to the Tennessean, Nashville’s many universities are already planning to add new programs to accommodate the incoming Amazon employees, including specialized job training. Vanderbilt administrators are excited about this development.
“We are proud to welcome our new neighbors and look forward to working with the Amazon team to unlock new opportunities and find creative ways to benefit our shared community,” Chancellor Nicholas Zeppos told the Tennessean in a November article.
The Vanderbilt admissions office anticipates that Amazon’s decision will make Vanderbilt more attractive to prospective students who want to live in a thriving commercial city.
“From the admissions perspective, the recent Amazon announcement only adds to the already positive messaging about Nashville which we incorporate into our everyday marketing of Vanderbilt,” Director of Admissions John Gaines said.
Kim believes the new Amazon site will also help students looking for jobs in the business sector, especially since finding business jobs in Nashville is usually more difficult than it is in major business hubs like New York or Chicago.
Overall, students are excited about what Amazon’s decision spells out for the future of Nashville.
“It’s pretty nice to see that the city that we all fell in love with, other people are falling in love with it as well,” said Butowsky. “You’re going to have more restaurants, more retail, more cool apartment buildings, more neighborhoods springing up, more exciting things to do in Nashville.”