More Questions Raised About Google's Sweetheart Deal In North Carolina

from the sweeter-and-sweeter dept

Recently, we pointed to a story suggesting that Google, like Microsoft in its early days, still has a thing or two to learn about dealing with politicians. Basically, the company used some pretty heavy-handed tactics when lobbying the state of North Carolina for tax incentives to build a new data center there. The company almost pulled out of the project after language in the initial bill clarified that the bill was intended to help Google. Now it’s been revealed that the economy study performed to justify the bill was never completed. The critical question, which the study never addressed, is whether it makes sense for the state to offer three decades worth of tax breaks, with an estimated value of $250 million. All that they determined was that a $5 million job creation grant could lead to $45 million in state revenue. The real issue is not the tax breaks themselves; states frequently give companies incentives to locate there. But if Google is trying to ram through beneficial legislation in a manner that will anger many politicians and damage its “do no evil” reputation, the move could come back to haunt it.

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Comments on “More Questions Raised About Google's Sweetheart Deal In North Carolina”

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Caleb says:

Re: Why NC?

Because Google isn’t building in the RTP. Google is building in Lenoir – the foothills of Appalachia (hear the banjos?). Average income of less than $30k per household. Not only that, but, according to local papers, the local gov’t actually may have gone door-to-door in order to acquire the land needed for the site. “It’s for the good of the local economy…” Well, at least they didn’t use the Souter decision and declare eminent domain.

Of course with the excellent state of IT education provided by Lenoir-Rhyne college, it is easy to see why Google chose this location over those available in the RTP. UNC, Duke; what are they?

Mattb says:

Re: Re: Re: Why NC?

That is the most stupidest comment I have seen in awhile. Do you know this town? Do you know what they think of people? Or are you making generalization’s about people living in small towns or people living in the South? Most people I know in NC love when outsiders come in and give them jobs, either directly or indirectly. I have never heard of college graduates equated with “faggots”, not usre where you dredged that up from.

Terry Sanders says:

Just what you thought...

Look, we all know some people got some mighty big payoffs here; where Google really screwed up, was in not knowing who to pay off. They missed some, and who do you think want screaming to the press.

Just human nature.

The big problem now is that oother companies are now asking for similar benefits, and some political tyoes are hiding in their basements or running for cover.

Let’s sell tickets and watch this unfold. Anyone for the movie rights 😉

pracheer gupta (user link) says:

Wrong Wrong Wrong

well first of all everyone knows that google will be earning tremendously more and they do have the capacity to pay the actual amount.
Now my question is: is GOOGLE not going against the society by not giving society (through government) its due credit. Isnt it wrong that only a few handful people earn too much at the cost ( and maybe exploitation of others ).
Another point if things like these continues then the other firms who pay usual taxes will become less competitive in the long run. Is this again not wrong??
If u see the recent controversies in india relating special economic zones than u might get an idea of what the future might hold if policies like this continue!

dorpus says:

Re: Re:

My personal experience says that the rent for a 1BR apt inside of RTP costs 4 digits, the same as what I paid in the Valley. People drove like maniacs and had hostile competitive attitudes exactly like the Valley. Both places had vast hordes of scowling Vietnamese immigrants who never open doors for women, the whites who are overly proud of their suburban homes 2 hours away, and overrated local cultures that consisted largely of amateur rock bands making terrible noises at book stores on Friday night.

Mike Rundle (user link) says:

Re: Re: Re:

What RTP are you talking about? My first apartment in RTP was 2 bedrooms and $500 per month, and before we bought our house, we had a 3 bedroom apartment at 1600 sq ft for less than $800 per month. I have no clue what you are talking about with regards to “scowling Vietnamese immigrants” since the majority of immigrants in this area come from highly-regarded universities in India and have high-paying tech jobs in the Park.

dorpus says:

Re: Re: Re: Re:

What RTP are you talking about? My first apartment in RTP was 2 bedrooms and $500 per month, and before we bought our house, we had a 3 bedroom apartment at 1600 sq ft for less than $800 per month.

Yup, people in Silicon Valley liked to brag about similar rates for their rent too — they didn’t like to tell you about how many roommates they had, whether the lease was legal, or how small their room was.

I have no clue what you are talking about with regards to “scowling Vietnamese immigrants” since the majority of immigrants in this area come from highly-regarded universities in India and have high-paying tech jobs in the Park.

Yup, the whites in NC live in their bubble and say that foreigners are “extremely rare” in NC. Just as white folk in Silicon Valley lived in their segregated communities 2 hours from the Valley, and were damn proud of it.

Mike Rundle (user link) says:

Re: Stymie

I’m currently sitting in my 3000 sq. ft home in Raleigh and it was less than $400k, so no, the cost of living here in the Raleigh/Durham/RTP area is not comparable to Silicon Valley. However, companies like IBM, Nortel, Cisco, Sony Ericsson, and many others are here with sprawling corporate campuses and 10s of thousands of employees, so the tech economy here is extremely strong.

Also, like another commenter said, the Google datacenter is going nowhere near RTP but way out in the Western part of this state where most people are farmers or have other low-wage jobs. The state of NC gave insane tax breaks to huge companies in the 70s to attract them to the RTP area and now it’s booming, so I see no problem with our state government doing the same for Google to get them here.

Amerin says:

I still dont understatnd

How does Google use heavy handed tactics, what are these tactics? none of these articles say what they did, just that they did “it”

In the big picture, the money the state will make, from home sales taxes, car taxes, gas taxes, State income taxes, on all of the 300 to 600 or so new jobs this new site will make, plus all the businesses that will sell goods and services to those people, not to mention Google as a business. Sure, Google might be getting some long term tax breaks, but the local governments will still make out. If you have ever had to work with/for any government agency as a business, they never give anything for Free, it always a HUGE red tape nightmare. All of this media hype over this, just seems like more BASH Google cause they are a big target and are on top of their game, so lets knock them down.


Smaller_guy says:

My company is right now looking for data center space, and is in the process of buying a couple of hundred servers. I figure we are paying over $100K in sales taxes alone (which will be waived for Google in this sweet deal).

It is frustrating to realize that only little people pay taxes (yeah, big surprise), and big boys get away with passing special laws that exempt them from taxes for 30 years. Isn’t there a constitutional provision against passing laws to benefit just one person (or legal entity?) – or is that provision just to prevent *punishment* of just one person or entity?

data says:

It is a Datacenter

Has anyone looked at the energy prices in Lenoir? Is there a hydro plant nearby or is there a nuclear plant near by? Many recent articles have pointed at the cost and availability of power as locations for major datacenter projects. Afterall, it is sooner to be a resource we don’t have enough of than Operations IT staff to run the datacenter.

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