Questions raised about Starbucks tax incentive

(The Center Square) – The Tennessee State Funding Board greenlighted a $30 million Fast Track Grant to Starbucks for a new regional corporate office expected to employ 2,000 people over the next five years amid questions about previous grants. The coffee company headquartered in Seattle announced in March that it was opening a Nashville office at a cost of $100 million. The state's $30 million grant puts taxpayers on the hook for nearly one-third of the cost. The grant is corporate welfare, according to Pamela Furr, grassroots director for Americans for Prosperity's Tennessee Chapter, who spoke against the funding at the board's meeting. "If Tennessee is already one of the best places 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 said. "Government should not be in the business of selectively rewarding customers with taxpayer dollars because when government props up one company, it inevitably disadvantages another one." Starbucks closed at $106.50 on the Nasdaq on Wednesday. The company has a market capitalization estimated at $121 billion, with most recent quarterly revenue of $9.53 billion. Fast Track Grants are given to companies to help offset the cost of expanding or moving into the state. The two companies that received the largest Fast Track Grants announced layoffs within five years of receiving them. Ultium Cells, which was granted a $78 million for its Spring Hill electric battery plant in 2021, temporarily laid off 700 workers in January. The company announced in March that it would reopen in the second quarter of 2026. The state awarded Oracle America a $65 million Fast Track Grant in 2021. The company announced massive layoffs in the spring, but the impact on its Nashville operations is unknown. State Rep. Aftyn Behn, D-Nashville, asked the Tennessee Department of Economic and Community Development to release Oracle's latest performance report, which is late, she said. "Tennessee cut a $65 million check to one of the richest corporations on the planet, and Oracle can't even be bothered to file its paperwork on time," Behn said in an April 2 release. "Now they're laying off workers to pour more money into data centers while their stock price goes up." Furr also cited Ultium and Oracle in her presentation to the State Funding Board. "Both cases have fallen short of the projections used to justify these subsidies," Furr said. The state included an accountability agreement with Starbucks that Stuart McWhorter, commissioner of the Department of Economic and Community Development, said would be fully enforced. Furr questioned whether there is transparency and accountability when the projections are not met. "Taxpayers deserve to know if clawback provisions are being enforced," Furr said. "Has Tennessee recovered any taxpayer dollars, and if not, why not?" The move to Tennessee is raising questions about its effect on the Seattle corporate office. A regulatory finding in the state of Washington shows that Starbucks is laying off 252 employees at its corporate office, a week after it announced 61 layoffs. The Center Square was unsuccessful prior to publication getting comment from Starbucks. It's unclear whether the moves are related to cost-cutting efforts by Starbucks' CEO Brian Niccol, according to a previous report by The Center Square. The State Funding Board also approved a Fast Track Grant of just over $1 million for LEV Manufacturing, Inc., which is planning a 100,000-square-foot production and distribution facility in Algood. The project will bring 288 new jobs within the next five years, according to filings with the state.