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@kartan, there is a lot of valid reasons to give an incentive such as a tax break to a large company, I will list a few: 1. Brand name corporation in your comm

@kartan, there is a lot of valid reasons to give an incentive such as a tax break to a large company, I will list a few: 1. Brand name corporation in your community, leading to new businesses propping up 2. Increase land-value in the area, leading to higher city taxes 3. Income, corporate and other taxes associated with the company's project & continuous operation 4. Long-term certainty. Most companies wont build a data center only to scrap the project in 2 years. 5. Economic multiplier. If we assume that each job is tied to $100,000 in income, taxes, benefits, etc and there are 2,300 jobs for 24months, we are looking at $345M-460M in 2 years. Run an economic multiplier and you may be reaching the billion mark 6. Plenty of city,state,federal projects run at a negative or neutral economic value. Having a business such as Google offering to bring business to your hometown will certainly make you listen to them and consider their offer. It becomes a matter of cost/benefit analysis and ensuring that the community accepting this transaction understands and has the option to complain about it. I agree that if everyone plays this game, we may reach a point where governments are fully subsidizing every business (there are already plenty of businesses subsidized by governments). It is a matter of finding the right balance.

tw04 8y ago
1. There are already dozens of datacenters in Minnesota. They aren't prompting other businesses to pop up because they are self-contained and self-serving. Furthermore there is no "brand recognition" they are giant unmarked warehouses that could be a datacenter or could just be another nameless storage facility. 2. Why would a datacenter increase land value? This isn't a corporate headquarters, it's a datacenter. 3. Taxes on what? That's what this package is, tax exemtpion. 4. Again, the datacenter employs "20 people" which is really like 4 FTEs and a bunch of cleaning staff. And likely part-time Security guards. 5. There won't be 2,000 jobs to build a datacenter, that's wildly exaggerated. And there's no way in hell that the average construction worker is making even half of the number you just stated. 6. If they were bringing actual jobs, and not a borderline-unmanned datacenter, sure. This isn't that.
- Gpetrium 8y ago
  I will bite your response with the hopes you try to keep an open mind to the response you get instead of a preconceived notion of how things work. 1. Data centers are a symbol to a much larger economic schema that impacts quality of service to the area, economic prosperity, among other areas. Minnesota can literally come to prospect business and say "Look, Google, X, Y and Z companies gave us a seal of approval that our state is tech driven, come join them in the future of technology in America" You would be surprised how 1 transaction with a big brand can help future business opportunities. 2. One data center alone does not increase land value, the combination of all the variables I list ++++ do. 3. Every employee that is paid is taxed, every equipment they purchase is taxed, every goods or services they need is taxed, land is taxed. Taxation is not just what income tax and corporate tax. 4. You shouldn't be comparing a data center to a headquarter, they are two distinct parts of a business and the economy. You will have 20 people + the contractors needed from time to time + folks that need to fly to the data center 70% of their time + other marketing, sales jobs to sell the data center services to the state economy. Is it on the same degree as a headquarter? Never, nor should it be seeing as such 5. You could divide the number of jobs by 30 and you could still break-even as a city/state without accounting for the other benefits I list (and the ones I didn't). You are also forgetting that there are other costs associated with the job that are not construction work and even within construction work, there are specialists that make more money. Always remember, just because your paycheck says you make $15 an hour, it doesn't mean that your cost is a lot higher. 6. Refer to the other points and try to think of the ones I didn't list (improved disaster readiness in the region, energy consumption cost and taxes/jobs associated with it, promises to set-up green initiatives, etc) I hope this has helped you see a different side of the equation.
  - abakker 8y ago
    This is a very good discussion, back and forth. I think it is worth asking who should be capturing the economic benefit here. A tax break for google in this case is allowing google to capture the economic benefit it creates for the public. Not giving it a tax break allows the public to capture that economic output. While I very much agree that this project will add value to the economy, if google is given a $15m tax incentive to create this property, it means that the public doesn't get it. Those justifications you lay out are real, but if you pay google for them in the form of a tax break it all balances out. It doesn't create value from nothing.
deleted 8y ago
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tw04 8y ago

1. There are already dozens of datacenters in Minnesota. They aren't prompting other businesses to pop up because they are self-contained and self-serving. Furthermore there is no "brand recognition" they are giant unmarked warehouses that could be a datacenter or could just be another nameless storage facility. 2. Why would a datacenter increase land value? This isn't a corporate headquarters, it's a datacenter. 3. Taxes on what? That's what this package is, tax exemtpion. 4. Again, the datacenter employs "20 people" which is really like 4 FTEs and a bunch of cleaning staff. And likely part-time Security guards. 5. There won't be 2,000 jobs to build a datacenter, that's wildly exaggerated. And there's no way in hell that the average construction worker is making even half of the number you just stated. 6. If they were bringing actual jobs, and not a borderline-unmanned datacenter, sure. This isn't that.

Gpetrium 8y ago
I will bite your response with the hopes you try to keep an open mind to the response you get instead of a preconceived notion of how things work. 1. Data centers are a symbol to a much larger economic schema that impacts quality of service to the area, economic prosperity, among other areas. Minnesota can literally come to prospect business and say "Look, Google, X, Y and Z companies gave us a seal of approval that our state is tech driven, come join them in the future of technology in America" You would be surprised how 1 transaction with a big brand can help future business opportunities. 2. One data center alone does not increase land value, the combination of all the variables I list ++++ do. 3. Every employee that is paid is taxed, every equipment they purchase is taxed, every goods or services they need is taxed, land is taxed. Taxation is not just what income tax and corporate tax. 4. You shouldn't be comparing a data center to a headquarter, they are two distinct parts of a business and the economy. You will have 20 people + the contractors needed from time to time + folks that need to fly to the data center 70% of their time + other marketing, sales jobs to sell the data center services to the state economy. Is it on the same degree as a headquarter? Never, nor should it be seeing as such 5. You could divide the number of jobs by 30 and you could still break-even as a city/state without accounting for the other benefits I list (and the ones I didn't). You are also forgetting that there are other costs associated with the job that are not construction work and even within construction work, there are specialists that make more money. Always remember, just because your paycheck says you make $15 an hour, it doesn't mean that your cost is a lot higher. 6. Refer to the other points and try to think of the ones I didn't list (improved disaster readiness in the region, energy consumption cost and taxes/jobs associated with it, promises to set-up green initiatives, etc) I hope this has helped you see a different side of the equation.
- abakker 8y ago
  This is a very good discussion, back and forth. I think it is worth asking who should be capturing the economic benefit here. A tax break for google in this case is allowing google to capture the economic benefit it creates for the public. Not giving it a tax break allows the public to capture that economic output. While I very much agree that this project will add value to the economy, if google is given a $15m tax incentive to create this property, it means that the public doesn't get it. Those justifications you lay out are real, but if you pay google for them in the form of a tax break it all balances out. It doesn't create value from nothing.

deleted 8y ago

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