June 23, 2017

Cover Story: A Mayor, A Mall & Mark; The Secret Heroes Behind ServiceMaster’s Decision to Stay

Memphis Business Journal

By Meagan Nichols

June 23, 2017

After Tennessee Gov. Bill Haslam initially met with representatives from ServiceMaster Global Holdings Inc. last year, he wasn’t confident that the company would stay in Memphis. “I can actually remember leaving being a little discouraged, thinking, ‘This is going to be difficult,’” Haslam said. In early 2016, Haslam and members of his economic development team made a trip to the Bluff City after a consultant from ServiceMaster contacted the governor’s office to say the company was looking for a new headquarters — and that the search could take them out of the state. With the company looking hard at locations in Dallas and Atlanta, the argument to stay in Memphis was far from an easy sell.

Against all odds, ServiceMaster announced June 3, 2016, it would relocate from its longtime East Memphis site to one of Downtown’s largest vacant buildings, the former Peabody Place mall.

The transformation of the retail space into Class A office is underway, and the company is now preparing for both a geographic change and an innovative future — real-time tech comes to home services.

ServiceMaster — with brands that include American Home Shield, AmeriSpec, Furniture Medic, Merry Maids, ServiceMaster Clean, ServiceMaster Restore and Terminix — was on the verge of taking 1,200 employees and $100 million in annual compensation and leaving Memphis.

But, a few key influencers, a large vacant Downtown building and an East Memphis dinner party kept the Bluff City in contention.

A visit from the capital

ServiceMaster’s headquarters was a subject of discussion within the company.

That was the message Haslam received, and it was powerful enough to cause the governor to gather a few members of his economic development team — which included Randy Boyd, then-commissioner of the Tennessee Department of Economic and Community Development (and current gubernatorial candidate) — to arrange a meeting with Robert Gillette, CEO of ServiceMaster.

Haslam told MBJ he could not remember with certainty where that first meeting with Gillette occurred — it might have been in a room at The Crescent Club — but he vividly remembered the weight of the exchange.

“[We] had an initial discussion about what they were looking for; what was important; what was needed to convince them to stay and grow in Memphis,” Haslam said. “For us, it was important. It has never been a secret, we have made Memphis’ economic development and job climate a priority. ServiceMaster was not only one of the larger employers, but one of the better-paying employers, as well.”

ServiceMaster’s leadership voiced concerns about Memphis that were familiar to economic development pros, questions around a lack of air service and where they would find a headquarters that would help them recruit talent.

Haslam said he made it clear he wanted the company to stay in Shelby County.

“ServiceMaster is an international brand, and Memphis is home to a lot of those international brands, from FedEx and AutoZone to International Paper,” Haslam said. “It was important for this city to keep that identity. … Memphis is an international business center.”

Shortly after the meeting, Haslam alerted Memphis’ legislative delegations, Memphis Mayor Jim Strickland, Shelby County Mayor Mark Luttrell and, at some point, he even pulled in State Senate Majority Leader Mark Norris (R-Collierville).

Strickland said it was mid-January 2016 when Haslam informed him about ServiceMaster potentially leaving.

“I was at Gov. Haslam’s announcement of his crime plan,” Strickland said. “[He] came up to me and said, ‘Man, that is really tough about ServiceMaster.’ And I thought, ‘I don’t even know what you are talking about.’ I had only been mayor for two weeks — maybe that’s the reason — and he had just met with ServiceMaster and they were very seriously thinking about moving out of town.”

After that encounter, Strickland spoke with Luttrell, representatives from the Greater Memphis Chamber and the Economic Development Growth Engine (EDGE) for Memphis & Shelby County and local business leaders to come up with a game plan to convince ServiceMaster to stay. Strickland described the strategy as a “full-court press.”

“[None of ServiceMaster’s] top leadership are from Memphis,” Strickland said. “There was no emotional tie to the city. They looked at the situation totally objectively.”