Clarksville-Montgomery County IDB

The Spark

The Clarksville-Montgomery County Industrial Development Board oversees one of Tennessee’s largest industrial parks: approximately 40 businesses employing 15,000 workers. For years, those businesses reported the same problem that employers across this report describe. They could not recruit or retain workers because their employees could not find or afford child care, particularly during second-shift and nontraditional hours. The IDB had the tools to attract manufacturers, logistics companies, and office tenants to the park. The question was whether those same economic development tools could be applied to a different kind of infrastructure: child care. Executive Director Josh Ward believed they could. To his knowledge, no IDB in the country had ever tried it.

The Solution

The IDB issued a Request for Proposal for a child care operator to build and run a facility within the industrial park. The Youth Academy, a Clarksville-based child care provider, submitted the winning proposal and committed to providing 800 full-time child care slots. Half of those slots are offered at a 15% discount to industrial park employees and active-duty military personnel. The facility operates from 5 a.m. to midnight, covering first and second shifts, and offers programs from infant care through a Tennessee Department of Education-certified private kindergarten, plus before- and after-school care and summer camp for school-age children.

To make the project financially viable, the IDB used two economic development tools that have been standard in Tennessee since the 1980s but had never been applied to child care. First, the IDB leased a parcel of land to The Youth Academy for $1 per year, with ownership transferring after a decade. That parcel, rezoned to commercial use, is now valued at $8 to $10 million. Second, the IDB granted a 10-year Payment In Lieu of Taxes (PILOT), abating approximately 75% of the property tax burden during the startup period. The Youth Academy made a multimillion-dollar private investment to construct the facility.

The PILOT includes built-in accountability. If The Youth Academy does not comply with its commitments on operating hours, discount rates, and capacity, the tax benefits are revoked. And the deal generates public revenue from the start: even during the PILOT period, The Youth Academy pays roughly $55,000 annually in property taxes on a parcel that previously generated zero. After the PILOT expires, annual tax payments to Montgomery County increase to approximately $216,895. The project also created 130 new child care jobs in the community.

The Results

The facility held its ribbon cutting in August 2024 and is believed to be the first public-private partnership between an industrial development board and a child care operator in the United States. Stuart McWhorter, then-Commissioner of the Tennessee Department of Economic and Community Development, described it as a model for other counties looking to step out of the box. Hope Patonis, owner of The Youth Academy, was direct about what made it possible: the PILOT and land contribution were the difference between a viable project and one that could not have been built, given the slim operating margins that define the child care industry.

The broader implications extend well beyond Montgomery County. Every IDB in Tennessee has access to the same PILOT and land incentive tools. The innovation here was not a new program or a new law. It was recognizing that child care is workforce infrastructure and that workforce infrastructure is economic development. That reframing opens a path for industrial parks, business districts, and economic development authorities statewide to use tools they already have to solve a problem they have been treating as someone else’s responsibility.