Tax Deal Goes Up for Vote: But Web Company Won’t Announce Before January Whether It Will Build 200-Employee Site
By Jim DuPlessis, The State, Columbia, S.C.
Dec. 18–GOOGLE AND RICHLAND COUNTY
Richland County Council will vote tonight on property tax breaks for a potential 200-job, $600 million Google data center near Blythewood, but the Silicon Valley company won’t announce before January whether it will build one.
The vote comes three months after Google paid $13.1 million for a 466-acre site along I-77. Local officials have dreamed the 80-mile stretch of highway connecting Columbia to Charlotte would become a magnet for high-paying jobs since it opened 26 years ago today.
Richland County Council already has given preliminary approval to allow the company to pay a set fee in lieu of property taxes. County Council chairman Joseph McEachern said the incentives have “an excellent chance of passing” on third reading tonight with support from him and other members.
And McEachern said he does not expect to wait long for a Google decision. “We should know something prior to our first meeting in January,” which will be held Jan. 8.
McEachern said the company will provide more benefits to the county in taxes than costs, such as those for police, ambulances, schools and other services. The main benefits will occur from jobs and pay.
He expects the company will hire at least 200 workers at the site, with perhaps 50 others being Google employees transferring from other locations.
Pay throughout the site will be about $60,000 a year — an average for every job from entry-level workers to the site’s manager. Pay for hourly workers will be an average of $45,000 to $60,000 a year, McEachern said.
Matt Dunne, a Google spokesman, said the company is “delighted” Richland County is voting on the tax incentives. The company also is negotiating tax breaks with the S.C. Department of Commerce for the Blythewood site, Dunne said.
A Richland County data center would be Google’s second in the state and third in the Carolinas. It announced in April it was building a data center near Mount Holly in Berkeley County. In March, it announced plans for one in Lenoir, N.C., about 75 miles northwest of Charlotte.
In Berkeley County, state officials negotiated $4.8 million in grants that the company can spend on training, roads or other infrastructure. The company can start getting the money after it reaches certain job and investment thresholds. No final agreement has been signed.
Also, the Legislature extended to data centers a sales tax exemption for electricity that has applied to manufacturers for decades. That tax break would apply automatically to Richland County if Google proceeds there.
In Lenoir, N.C., state and local officials agreed to provide tax cuts of $260 million over 30 years. But the N.C. Department of Commerce said Google’s investment and jobs would add $1.1 billion to the state’s economy over the next 12 years and generate a net state benefit of $37 million.
But will state and local tax breaks make a difference for a company spending $2 billion a year worldwide for land, buildings and equipment?
“Everything goes into the mix when you make a decision where to invest,” Dunne said. “At the end of the day, the balance sheet is very important.”
A study released in October by AngelouEconomics says Google, Microsoft, Yahoo and others are building shelf-loads of data centers. Each typically covers 250,000 square feet and pays skilled employees an average of $65,000 a year.
The consulting firm, hired by a Columbia, Mo., economic development agency, said companies pick sites based on the cost of power, labor availability, real estate costs and disaster risk, according to published reports.
Construction at the two other Carolinas sites is under way.
Limited testing is expected to begin by July at Mount Holly, 20 miles from Charleston, and the servers will go online by the end of 2008, Dunne said.
Dunne would not say how many people would be employed at the site when it started operating, but the full investment and jobs will occur over five years from the announcement.
A similar timetable would follow for Blythewood, if Google decides to build there.
The decision whether to build in the Midlands is one familiar to owners of desktop computers.
Google has improved its computers’ response time to clicks and its efficiency in storing the information users seek, but that hasn’t kept pace with demands from its users. Now, it is searching for ways to handle the disc-space hogs of digital video files.
“The leaps in the technology are quite dramatic,” Dunne said. “In a couple years, we might find a superior technology for generating our data center capacity.”
Google spent $553 million from July through September on capital expenditures, much of it to build data centers. Company officials told analysts during an Oct. 18 conference call that the company was planning for investments to continue at that pace to meet demand from increased use.
“We’re quite comfortable (in) that investment,” said Jonathan Rosenberg, Google’s senior vice president of product management.
“Those data centers do more than just search,” he said. “They do advertising. They host apps. They do Google Earth and maps.”
Reach DuPlessis at (803) 771-8305.
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