Starbucks has long been associated with its home city of Seattle, Washington.
But the coffee giant is expanding its corporate footprint elsewhere as Seattle becomes a less friendly environment for their work.
Starbucks revealed in an April 21 press release that it will invest $100 million to expand in Nashville, Tennessee.
The project will employ 2,000 people as Starbucks looks to grow in the southeastern United States. The employees based in Nashville will work “closely with the company’s global headquarters in Seattle.”
Tennessee Republican Gov. Bill Lee celebrated the move, noting that his state “is known nationwide for its strong values and fiscally conservative approach to business.”
“We are proud to add Starbucks to the strong roster of brands that place their trust in our business climate and skilled workforce,” he continued.
“As Starbucks continues to shape their brand and expand their operations, we’re grateful that they have chosen to build a future here, creating up to 2,000 quality jobs for Tennesseans.”
Starbucks CEO Brian Niccol likewise said in the release that “Nashville gives us an opportunity to support that growth with great talent and proximity to our growing number of coffeehouses and suppliers across the Southeast.”
But the boon for Tennessee comes as a bust for Washington.
KCPQ-TV, an outlet based in Seattle, reported that Washington could lose as much as $750 million in annual tax revenue from Starbucks planning to expand in Nashville instead.
Adam Sichko of the Puget Sound Business Journal told the outlet that the addition of 2,000 people is one of the five largest job announcements in Nashville history.
“The average salary for these 2,000 jobs is $125,000 a year, which’s well above the median household income,” he said.
“A company makes an initial move and they grow in the second stage and it grows in the third stage and so these companies are certainly mobile and they are flocking to where some of the more affordable business costs are,” Sichko continued, predicting that Starbucks would keep expanding in Nashville.
The decision to grow in Tennessee rather than their home state is likely encouraged by drastic differences in taxes, Ryan Frost of the Washington Policy Center told KCPQ.
The company will save $12,000 per year for every employee they add in Nashville rather than Seattle.
“Seattle has such a higher tax burden than Nashville does,” Frost remarked.
KCPQ noted that the decision from Starbucks comes amid years of decline for Washington.
The state was ranked 6th in the nation for businesses in 2014 by the Tax Foundation, but is now ranked 45th.
Beyond those broader trends, Seattle Mayor Kate Wilson, a 43-year-old socialist who was elected as mayor last year, has openly antagonized the major employer in her city.
She remarked shortly after her election during a workers rally that “I am not buying Starbucks and you should not too.”
But earlier this month, Wilson deflected blame for the decision to expand in Nashville, saying that “they’ve been in talks for forever.”
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