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

from the sweeter-and-sweeter dept

Thu, Feb 15th 2007 6:18pm — Joseph Weisenthal

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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25 Comments

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Anonymous Coward, 15 Feb 2007 @ 6:38pm

Google Sucks.
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dorpus, 15 Feb 2007 @ 7:09pm

Why NC?
NC's wages and cost of living, in the RTP area where all the tech companies are located, are on par with Silicon Valley. NC has a vast array of other tech industries, including less volatile industries than IT, so I don't know why NC would go out of their way to attract Google.
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Terry Sanders, 15 Feb 2007 @ 8:56pm

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 ;-)
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pracheer gupta, 15 Feb 2007 @ 9:53pm

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!
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Caleb, 15 Feb 2007 @ 10:00pm

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?
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dorpus, 15 Feb 2007 @ 10:20pm

Re: Re: Why NC?
Who are they benefiting? People in places like that hate outsiders, especially college graduates who are equated with "faggots".
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John Doe, 15 Feb 2007 @ 10:21pm

The politicians are idiots in NC!
It is not Google's fault that the government body in NC are idiots!
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Stymie, 15 Feb 2007 @ 11:55pm

The idea that cost of living in RTP is on par with Silicon Valley is humorous. A 3000 square foot house around RTP ranges from $400,000-$600,000 (just looked it up). A house of that size in Palo Alto, Cupertino or nearby would cost at least 5x as much if not more. In fact, a 1000 square foot shack would cost more.
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dorpus, 16 Feb 2007 @ 12:10am

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.
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NC Native, 16 Feb 2007 @ 3:48am

Re: Re: by Duphus
Hey Duphus,

I've heard other people on this site accuse you of being an idiot. Now I know they were right.

You obviously know little about NC and I'm sure our state is better off without you.
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dorpus, 16 Feb 2007 @ 4:06am

Re: Re: Re: by Duphus
I've lived in NC before. I've lived in any number of places where the natives who lived there all their lives insisted that something can't happen, but it was constantly happening around me.
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Amerin, 16 Feb 2007 @ 5:23am

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.

Whatever...
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Mattb, 16 Feb 2007 @ 5:27am

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.
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Educated, 16 Feb 2007 @ 5:53am

Re: Re: Re: Why NC?
As a small town NC native who is educated, and still lives in a small town by the way, I have to say that "faggots" comment is so out of touch with reality it is funny.

There are red-neck homophobes everywhere, not just here.

Idiot...
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rax262, 16 Feb 2007 @ 6:38am

Google traffic
I think the move to Lenoir is problematic on several levels. I think that Google will run into many of the same problems that prompted Lowe's to move its headquarters from nearby North Wilkesboro. For starters it's over an hour away from Charlotte, the nearest international airport.
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AC, 16 Feb 2007 @ 7:51am

Re: Re: Re: Re: Why NC?
That is the most stupidest comment

Look whos talking?

Idiot
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Smaller_guy, 16 Feb 2007 @ 8:50am

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?
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Mike Rundle, 16 Feb 2007 @ 9:32am

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.
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Mike Rundle, 16 Feb 2007 @ 9:35am

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.
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dorpus, 16 Feb 2007 @ 9:45am

Re: Re: Re: Re: Why NC?
The most stupidest? Really? Thanks! I always try to be the most stupidest person alive, as you can see by reading everything I write. By the way I always make up my information in my head.
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dorpus, 16 Feb 2007 @ 12:27pm

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.
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Anonymous Coward, 16 Feb 2007 @ 12:58pm

Re: Wrong Wrong Wrong
You presume that what is good for the government is necessarily good for those being governed. Frankly, corporate welfare is no more deplorable than social welfare. Neither is good for the freedom of citizens.
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data, 16 Feb 2007 @ 1:36pm

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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CC, 4 Mar 2007 @ 8:42am

Re: Just what you thought...
Payoffs? Was this just a guess or do you have any info...rumors?
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CC, 4 Mar 2007 @ 8:45am

Re:
economic discrimination? Anyway I can get info on your company's situation? And yeah...I AM writing a book :)
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