State approves $30M for Starbucks’ Nashville location

Tennessee officials approved $30 million Wednesday for Starbucks Corporation’s planned Southeast headquarters in downtown Nashville despite opposition from a conservative group and questions about the company’s treatment of coffee shop workers.

The State Funding Board, composed of constitutional officers and Gov. Bill Lee’s finance commissioner, OK’d the grant for the $121 billion Seattle-based coffee shop company. The move comes after Starbucks announced it would invest $100 million in a new office and hire up to 2,000 people over the next few years to expand in response to greater demand.

Pamela Furr of Americans for Prosperity-Tennessee opposed the grant, telling the board that economic success didn’t take place “because government officials picked winners and losers.”

“If Tennessee is already one of the best places in America to do business, why are taxpayers being asked to subsidize one of the largest corporations in the world, a corporation by the way that is cutting jobs and closing stores,” Furr asked the board.

By giving incentives to one company, the state causes disadvantages for other businesses, Furr said. She added that companies such as Ultium Cells and Oracle promised “transformational growth” when they received similar grants, but those have fallen short of projections so far.

Economic and Community Development Commissioner Stuart McWhorter assured the board that the state will use its “clawback” policy to make Starbucks return the money if it fails to meet the investment and hiring projections.

McWhorter told the board that Starbucks, which has more than 41,000 coffee houses, will pay employees at the corporate office an average of $125,000 annually, a total of $250 million in yearly payroll.

Yet Starbucks Workers United, made up of the company’s baristas, has been negotiating with the company for better pay and working conditions, amid accusations that Starbucks committed 600 labor violations nationally dealing with pay, staffing and anti-labor activities.

The Service Employees International Union rallied Tuesday in front of the Metro Courthouse to raise awareness of the company’s alleged violations. Workers say their pay of roughly $16 an hour is too low and that the company schedules them for less than 20 hours a week, which doesn’t allow them to qualify for benefits.And 22 members of the Metro Council signed a letter to Starbucks CEO Brad Niccol urging the company to settle a contract with the union.

After Wednesday’s vote, McWhorter said he isn’t concerned about the union’s complaints.

“I can walk in my shoes every day being concerned about everything or I can try to be optimistic and hope that we provide a great business opportunity and climate for businesses that are investing, in this case, over $100 million of their money,” McWhorter said.

The state has $113 million in its FastTrack grant balance and commitments of $535 million.

During the company’s announcement at Union and Peabody in Nashville, Jeff Hite, chief economic development officers for the Nashville Chamber of Commerce said, “Starbucks’ decision to locate here is a result of the region’s international reputation, skilled workforce, quality of life and business-friendly climate – along with Nashville’s unmatched creative energy and vibrant cultural vibe that continue to inspire innovation and attract talent from across the globe.”