5 ms·

Heh - one of those data centers (Lenoir) was the focus of quite a bit of optimism in the Piedmont area of North Carolina a few years ago. I can't find the news

Heh - one of those data centers (Lenoir) was the focus of quite a bit of optimism in the Piedmont area of North Carolina a few years ago. I can't find the news articles, but essentially, massive tax benefits were provided to Google and they built their data center and proceeded to hire like 4 people, b/c, you know, it's not a factory. This was apparently a surprise to everyone who thought a new googleplex was somehow in the works (or maybe this was just wishful thinking). I'm not really sure what the moral of the story is because there are probably hundreds of similar backwater towns in the USA that would line up to offer the same benefits.

mikeyouse 13y ago
$212 million in incentives for a three-hundred-billion dollar company, ugh. http://www.businessweek.com/stories/2007-07-22/the-high-cost-of-wooing-google http://www.businessweek.com/stories/2007-07-22/the-high-cost...
- aray 13y ago
  (NCer here) The big thing in a lot of rural North Carolina is that there was a huge textile processing and paper processing industry that's slowly been losing ground to overseas manufacturing. The end result is that many of these counties have extremely large power and water production capabilities built up and no one to sell to. The datacenters are attractive because they will actually buy these utilities at much higher capacities than the community would otherwise. This is worth much more than any small number of jobs created.
  - dclusin 13y ago
    This actually makes a lot of sense to me (someone from an urban area). I never understood why all these towns in the middle of nowhere USA would offer such generous subsidies but this line of reasoning perfectly justifies it. I suspect the cost to decommission or "right-size" these sorts of facilities would probably cost... on the order of hundreds of millions of dollars.
  - Arelius 13y ago
    I don't understand this terribly well, but shouldn't then market forces, the decreased price of power and water in places due to decreased demand cause it to be an attractive place to build a data center regardless? Why then do we need to be subsidizing it?
    - sharkweek 13y ago
      We don't -- but when we don't, another county will
      - aray 13y ago
        This is it, dead on. The problem is not incentivizing just your old textile/paper-processing county, it's competing with all of the other ones. So at the end of the day hopefully everyone's done their homework and the community is still making more money than it was before.
    - _mulder_ 13y ago
      Quite right, and lot's of places don't. You can ask them how many Datacenters they have. Seriosuly though, you're right, if nobody offered subsidies, they would all be on a level playing field and market forces would win out. However, it only takes one to break rank and the free market is gone.
deelowe 13y ago
They hired quite a bit more than 4 people and there are positions open currently.
- nemesisj 13y ago
  The article linked above mentioned one person hired at the time of its writing (2007). Obviously it's six years later now, but even if they hired two hundred, it would still be a staggering investment by the local government ($1 million per job). Again, I'm not sure what the point here is as US States are not much different from countries in a race to the bottom, other than sooner or later you hit bottom. I mainly just found it amusing as it was a huge deal for Lenoir and now here it is on the front page of HN!
  - walshemj 13y ago
    Yeah I remember doing a back of the envelope calculation and for Google style DC's you could get away with 20-30 FTE plus a small security team (from someone like group 4) to man the gates patrol the site. I think at least some Google DC's have a small office block on site possibly for adwords employees.
  - jamesaguilar 13y ago
    It's not clear how much of that money is actual investment and how much of it is taxes forgone that they wouldn't have gotten anyway had Google not chosen to locate there. I think it gives a slightly skewed view to call the whole amount an "investment." Disclaimer: Googler, commenting as private person, not as company rep, etc.
  - minwcnt5 13y ago
    You have to consider more than just the employees that Google hired. They're also spending money in the region on a bunch of things besides salaries. One way to look at might be that if the facility remains open for 10 years, then that $1M/employee pays for salaries, and then they get all of the other economic benefits for "free". It sure sounds like a lot of money, but I wouldn't be surprised if it makes sense in some way. Especially since, as the sibling post points out, there would have been a large number of governments competing for it.

mikeyouse 13y ago

$212 million in incentives for a three-hundred-billion dollar company, ugh. http://www.businessweek.com/stories/2007-07-22/the-high-cost-of-wooing-google http://www.businessweek.com/stories/2007-07-22/the-high-cost...

aray 13y ago
(NCer here) The big thing in a lot of rural North Carolina is that there was a huge textile processing and paper processing industry that's slowly been losing ground to overseas manufacturing. The end result is that many of these counties have extremely large power and water production capabilities built up and no one to sell to. The datacenters are attractive because they will actually buy these utilities at much higher capacities than the community would otherwise. This is worth much more than any small number of jobs created.
- dclusin 13y ago
  This actually makes a lot of sense to me (someone from an urban area). I never understood why all these towns in the middle of nowhere USA would offer such generous subsidies but this line of reasoning perfectly justifies it. I suspect the cost to decommission or "right-size" these sorts of facilities would probably cost... on the order of hundreds of millions of dollars.
- Arelius 13y ago
  I don't understand this terribly well, but shouldn't then market forces, the decreased price of power and water in places due to decreased demand cause it to be an attractive place to build a data center regardless? Why then do we need to be subsidizing it?
  - sharkweek 13y ago
    We don't -- but when we don't, another county will
    - aray 13y ago
      This is it, dead on. The problem is not incentivizing just your old textile/paper-processing county, it's competing with all of the other ones. So at the end of the day hopefully everyone's done their homework and the community is still making more money than it was before.
  - _mulder_ 13y ago
    Quite right, and lot's of places don't. You can ask them how many Datacenters they have. Seriosuly though, you're right, if nobody offered subsidies, they would all be on a level playing field and market forces would win out. However, it only takes one to break rank and the free market is gone.

deelowe 13y ago

They hired quite a bit more than 4 people and there are positions open currently.

nemesisj 13y ago
The article linked above mentioned one person hired at the time of its writing (2007). Obviously it's six years later now, but even if they hired two hundred, it would still be a staggering investment by the local government ($1 million per job). Again, I'm not sure what the point here is as US States are not much different from countries in a race to the bottom, other than sooner or later you hit bottom. I mainly just found it amusing as it was a huge deal for Lenoir and now here it is on the front page of HN!
- walshemj 13y ago
  Yeah I remember doing a back of the envelope calculation and for Google style DC's you could get away with 20-30 FTE plus a small security team (from someone like group 4) to man the gates patrol the site. I think at least some Google DC's have a small office block on site possibly for adwords employees.
- jamesaguilar 13y ago
  It's not clear how much of that money is actual investment and how much of it is taxes forgone that they wouldn't have gotten anyway had Google not chosen to locate there. I think it gives a slightly skewed view to call the whole amount an "investment." Disclaimer: Googler, commenting as private person, not as company rep, etc.
- minwcnt5 13y ago
  You have to consider more than just the employees that Google hired. They're also spending money in the region on a bunch of things besides salaries. One way to look at might be that if the facility remains open for 10 years, then that $1M/employee pays for salaries, and then they get all of the other economic benefits for "free". It sure sounds like a lot of money, but I wouldn't be surprised if it makes sense in some way. Especially since, as the sibling post points out, there would have been a large number of governments competing for it.