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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. Fu

by 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.
  - hayd 8y ago
    Maybe, it could also mean that Google go to another state who will offer a tax incentive, and the state loses out. Or, as AOC would say: saves $15m.
    - hexane360 8y ago
      "the state loses out" assumes that the public makes money off the deal. If not, just spend the $15m on programs that actually benefit them.
  - asdfasgasdgasdg 8y ago
    > 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. Only under the assumption that $15M is the exact maximum amount that the city would pay for the listed benefits (i.e. the exact break even number). Probably it is worth more than that to the city (or else they probably wouldn't do the deal), so the reality is that Google is capturing some of the surplus value, and the city is capturing some.
    - abakker 8y ago
      >Google is promising to bring 50 full-time positions to the area. The company also projects that it will create 2,300 jobs during the 18–24 month construction window—a far shorter period than the 20 years of tax relief they're requesting. After construction wraps, with 18 remaining years of tax abatement, there will be a $270,000 tax shortfall for every full-time position created. I read that paragraph from the article to read that after the 20 year term google is looking for this tax relief, the town will be net negative 270K for each of the 50 employees Google creates. If that is not what that paragraph means, then I agree with you, but, my interpretation is that for the state to break even, google has to generate an additional 270K of economic return to the state per each person at the google data center. I find that number to be unlikely.
notatoad 8y ago
>There won't be 2,000 jobs to build a datacenter, that's wildly exaggerated There could be, they probably didn't pull that number completely out of nowhere. But there certainly won't be 2000 jobs for the duration of the construction. or 2000 new jobs. I'm guessing it just creative counting, like if a crew of four people comes out to plant a couple trees by the front door, works for 4 hours total, and has no other involvement in the project, that's 4 jobs.
buttcoinslol 8y ago
> 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. Most union tradespeople make at least $35/hr in MN, a handful make over $40. My company pays the union about $75/hr for a journeyman electrician, which is their full rate with benefits included. Most (or all?) the labor on this project will be union labor, a GC isn't going to take a chance on a non-union sub with 600 million on the line.
- pooloo1 8y ago
  > 2. Why would a datacenter increase land value? This isn't a corporate headquarters, it's a datacenter. Data centers require backbones to provide their services. Becker sits outside the range of most ISP's, in addition to no fiber connection; Monticello being the closest with fiber. I suspect there will be a substantial contract for laying fiber here, thus further increasing value of the land.
  - supernovae 8y ago
    Centurylink is already passing through there. They already have 1gb internet for 65.00/month there. That's cheaper than what I pay here in Austin.
    - pooloo1 8y ago
      They dont have GB internet there, I have family there. =P

by tw04 8y ago

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.
- hayd 8y ago
  Maybe, it could also mean that Google go to another state who will offer a tax incentive, and the state loses out. Or, as AOC would say: saves $15m.
  - hexane360 8y ago
    "the state loses out" assumes that the public makes money off the deal. If not, just spend the $15m on programs that actually benefit them.
- asdfasgasdgasdg 8y ago
  > 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. Only under the assumption that $15M is the exact maximum amount that the city would pay for the listed benefits (i.e. the exact break even number). Probably it is worth more than that to the city (or else they probably wouldn't do the deal), so the reality is that Google is capturing some of the surplus value, and the city is capturing some.
  - abakker 8y ago
    >Google is promising to bring 50 full-time positions to the area. The company also projects that it will create 2,300 jobs during the 18–24 month construction window—a far shorter period than the 20 years of tax relief they're requesting. After construction wraps, with 18 remaining years of tax abatement, there will be a $270,000 tax shortfall for every full-time position created. I read that paragraph from the article to read that after the 20 year term google is looking for this tax relief, the town will be net negative 270K for each of the 50 employees Google creates. If that is not what that paragraph means, then I agree with you, but, my interpretation is that for the state to break even, google has to generate an additional 270K of economic return to the state per each person at the google data center. I find that number to be unlikely.

notatoad 8y ago

>There won't be 2,000 jobs to build a datacenter, that's wildly exaggerated There could be, they probably didn't pull that number completely out of nowhere. But there certainly won't be 2000 jobs for the duration of the construction. or 2000 new jobs. I'm guessing it just creative counting, like if a crew of four people comes out to plant a couple trees by the front door, works for 4 hours total, and has no other involvement in the project, that's 4 jobs.

buttcoinslol 8y ago

> 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. Most union tradespeople make at least $35/hr in MN, a handful make over $40. My company pays the union about $75/hr for a journeyman electrician, which is their full rate with benefits included. Most (or all?) the labor on this project will be union labor, a GC isn't going to take a chance on a non-union sub with 600 million on the line.

pooloo1 8y ago
> 2. Why would a datacenter increase land value? This isn't a corporate headquarters, it's a datacenter. Data centers require backbones to provide their services. Becker sits outside the range of most ISP's, in addition to no fiber connection; Monticello being the closest with fiber. I suspect there will be a substantial contract for laying fiber here, thus further increasing value of the land.
- supernovae 8y ago
  Centurylink is already passing through there. They already have 1gb internet for 65.00/month there. That's cheaper than what I pay here in Austin.
  - pooloo1 8y ago
    They dont have GB internet there, I have family there. =P