RESOLUTION NO. RS2012-488

A resolution authorizing an economic and community development incentive grant to be made to the Industrial Development Board of The Metropolitan Government of Nashville and Davidson County for the benefit of HCA Health Services of Tennessee, Inc. and other affiliates of HCA Holdings, Inc., including Parallon Business Solutions, LLC, HealthTrust Purchasing Group, L.P., and Sarah Cannon Research Institute, LLC.

WHEREAS, the Metropolitan Government of Nashville and Davidson County (“Metropolitan Government”) is vitally interested in the economic welfare of the citizens living within the area of the Metropolitan Government (such area, the “County”) and wishes to provide the leadership necessary to enhance this area's capabilities for growth and development; and

WHEREAS, the provision of quality jobs to area citizens by local business is both necessary and vital to the economic well-being of the Metropolitan Government; and

WHEREAS, pursuant to Tenn. Code Ann. § 5-9-101(26), the Metropolitan Government is authorized to use available funds to make grants for economic and community development purposes; and

WHEREAS, pursuant to Chapter 2.210 of the Metropolitan Code, in order to encourage economic and community development within the County, the Metropolitan Government is authorized to make economic and community development incentive grants with respect to “qualified projects” and “qualified companies” (as such terms are defined in Section 2.210.010 of the Metropolitan Code) if the location of such qualified project or such qualified company’s applicable facility within the County is expected to result in the creation of at least five hundred additional jobs within the County during the first five years of operations or during the first five years of an expansion of operations; and

WHEREAS, Chapter 2.210 of the Metropolitan Code provides that the actual amount and period of economic and community development incentive grants pursuant to such Chapter 2.210 shall be made by taking into account, among other things, the number of jobs created, the amount of revenue from all sources that is anticipated to be received by the Metropolitan Government with respect to the location of the qualified company and its operations in the County (or in the qualified project), and other economic and community development opportunities that the qualified company and/or the qualified project is expected to create; and

WHEREAS, HCA Holdings, Inc., a publicly traded Delaware corporation (“HCA”), is the nation’s leading provider of healthcare services and is headquartered in Nashville, Tennessee; and

WHEREAS, HCA Health Services of Tennessee, Inc. (“HCA-Tennessee”) is an indirect wholly-owned subsidiary of HCA; and

WHEREAS, Parallon Business Solutions, LLC (“Parallon”), an indirect wholly-owned subsidiary of HCA, (1) is one of the nation’s leading and most comprehensive providers of business solutions for health care systems, (2) provides revenue cycle and business process expertise; workforce management solutions; supply chain services; information technology services; and the purchasing power of HealthTrust Purchasing Group, L.P. (“HPG”) to hundreds of hospitals nationwide, and (3) currently maintains its corporate headquarters in Williamson County, Tennessee; and

WHEREAS, HPG, an indirect partially-owned subsidiary of HCA, (1) owns and operates HealthTrust Purchasing Group, a group purchasing organization utilized by hospitals, ambulatory surgery centers, physician practices and other healthcare providers, (2) now conducts its operations in connection with Parallon, and (3) currently maintains its corporate headquarters in Williamson County, Tennessee; and

WHEREAS, Sarah Cannon Research Institute, LLC (“SCRI”), an indirect partially-owned subsidiary of HCA, (1) is a leading provider of oncology research and develops clinical pathways in oncology, (2) serves over 75,000 new oncology patients every year, participates in drug trials, and administers the first private drug development program in the United Kingdom, and (3) currently maintains its corporate headquarters in Nashville, Tennessee; and

WHEREAS, Parallon, HPG and SCRI each has announced its decision to relocate its headquarters and certain of its respective central business operations to an office facility to be developed by West End Summit Development, LLC (the “Project Developer”) and located in the County (as further described below, the “Project”); and

WHEREAS, in its initial scope and configuration, the Project will consist of (1) an approximately 3.93 acre parcel of land located at 1600 West End Avenue, Nashville, Tennessee, (2) office buildings and related common areas currently estimated to contain between 750,000 and 900,000 rentable square feet of space (excluding common areas) to be constructed on such land, and (3) multi-deck parking facilities and other improvements to be constructed on such land (but excluding any hotel if and when such hotel is ever constructed on such land); and

WHEREAS, in connection with the development and construction of the Project, (1) title to the Project will be conveyed to, and held by, the Industrial Development Board of The Metropolitan Government of Nashville and Davidson County (the “Board”), (2) the Board and the Project Developer will enter into a lease agreement pursuant to which the Board will lease the Project to the Project Developer, and (3) the Project Developer and HCA-Tennessee (or one or more other subsidiaries of HCA) will enter into one or more sublease agreements pursuant to which the Project Developer will sublease approximately 475,000-500,000 rentable square feet of office space within the Project to HCA-Tennessee (or one or more other subsidiaries of HCA) (such subleases, collectively, the “HCA Sublease”); and

WHEREAS, HCA anticipates that the occupancy of a portion of the Project by Company Entities (as defined in Exhibit A hereto) will result in the creation of more than 500 Incremental Company Entity Positions (as defined in Exhibit A hereto) during the first five years of the completion of the Project; and

WHEREAS, the Metropolitan Government has found that (1) the Project meets the criteria of a “qualified project” under Section 2.210.010 of the Metropolitan Code, (2) HCA-Tennessee and any Company Entities that occupy the Project meet the criteria of a “qualified company” under Section 2.210.010 of the Metropolitan Code, and (3) the Project, HCA-Tennessee and any Company Entities that occupy the Project meet the criteria to be eligible to receive the benefits of an economic and community development incentive grant as authorized by Sections 2.210.020(A) and (B) of the Metropolitan Code; and

WHEREAS, the Metropolitan Government has found that the development and construction of the Project within the County, the related investment and growth in connection therewith, the relocation of the respective headquarters of Parallon, HPG and SCRI to the Project, and the employment growth in the County as a result of the foregoing will significantly expand employment and other commercial opportunities for area citizens; and

WHEREAS, in order to promote industry and develop trade and to create jobs and reduce unemployment and to further other public purposes of the Metropolitan Government, and after taking into account, among other things, the amount of revenue from all sources that is anticipated to be received by the Metropolitan Government from the development and construction of the Project within the County, the related investment and growth in connection therewith, the relocation of the respective headquarters of Parallon, HPG and SCRI to the Project and other economic and community development opportunities that HCA-Tennessee and any Company Entities that occupy the Project are expected to create within the County as a result of the development and construction of the Project, the Metropolitan Government has found that it is in the best interest of the Metropolitan Government to make an economic and community development incentive grant to HCA-Tennessee in an amount calculated by multiplying the number of Incremental Company Entity Positions as of the last day of each “Grant Year” (as defined in Exhibit A hereto) by $500 for a period of seven years; and

WHEREAS, it is in the interest and welfare of the citizens of the Metropolitan Government to approve and execute the Economic and Community Development Incentive Grant Agreement with the Board and HCA-Tennessee in the form attached hereto as Exhibit A.

NOW, THEREFORE BE IT RESOLVED BY THE METROPOLITAN COUNTY COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:

Section 1. That the Metropolitan Government shall make annual economic and community development incentive grant payments to the Board for the benefit of HCA-Tennessee and other Company Entities (as defined in Exhibit A hereto), including Parallon, HPG and SCRI, that occupy portions of the Project during the seven year Grant Period (as defined in Exhibit A hereto).

Section 2. That the amount of the annual incentive grant payments authorized hereby be calculated by multiplying the number of Incremental Company Entity Positions (as defined in Exhibit A hereto) for each Grant Year (as defined in Exhibit A hereto) by $500.

Section 3. Notwithstanding anything to the contrary herein, the Metropolitan Government's obligation to make any payments hereunder is contingent upon the annual appropriation of funds for such purpose by the Metropolitan Council.

Section 4. That the Agreement by and among the Metropolitan Government, the Board and HCA-Tennessee, the form of which is attached hereto as Exhibit A and incorporated herein by reference, is hereby approved, and the Mayor is authorized to execute the same; provided, however, that (a) the form of such Agreement will be modified, as necessary, to reflect the identity of the HCA subsidiaries which will be parties to the HCA Sublease and the Agreement (and, if applicable, other similar changes), and (b) must be approved as to legality by the Metropolitan Government Department of Law prior to being executed by the Metropolitan Government or the Board.

Section 5. That other than as provided at Section 4 of this Resolution, any material amendments, renewals, or extension of the terms of the Agreement must be approved by resolution of the Metropolitan Council.

Section 6. That this Resolution shall take effect from and after its passage, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.

Sponsored by: Edith Taylor Langster, Lonnell Matthews

LEGISLATIVE HISTORY
Referred to:	Rules & Confirmations Committee
Introduced:	November 20, 2012
Deferred:	November 20, 2012
Adopted:	December 4, 2012 - Roll Call Vote
Approved:	December 5, 2012
By: