Tuesday, June 19, 2007
Governor Culver And Google Announce $600 Million Data Center In Council Bluffs
New Information Technology Facility Will Create 200 Jobs in Iowa
COUNCIL BLUFFS – Gov. Chet Culver and Google Inc. today announced plans for the company to open a data center in Council Bluffs, Iowa. Google Inc. is investing $600 million and will eventually create 200 jobs at the facility powering the company's services.
"We're thrilled to announce our
plans for a data center in Council Bluffs, Iowa, which will help us continue to provide our users and customers with the
best possible service,” said Paul Froutan, Director of Operations, Google Inc. “We look forward to joining the community
and are grateful for the support from the state and local governments throughout our evaluation process.”
Google's data center is under construction now on a 55-acre site at the Council Bluffs Industrial Foundation’s new business park and is anticipated to open spring 2009.
Jobs at the Google data center will focus on ensuring that the facility’s computers are running at optimum speed and efficiency 24 hours a day, seven days a week. Positions require a variety of skills, ranging from experienced data center managers and Linux administrators to technology assistants. The jobs have an average salary and other benefits equal to about $50,000 per year, creating an annual payroll of about $10 million.
Last month, Gov. Culver signed a bill upgrading Iowa’s tax system related to sales tax, use tax, and property tax for computer related businesses. The state legislature's work exempts the electricity and capital investment necessary for this kind of a facility from sales tax, as is common in the manufacturing sector.
"We are very proud to welcome Google to Iowa," said Governor Chet Culver. “In making its decision, Google recognized
what we in Iowa have known all along – our workforce and quality of life is second-to-none. I am absolutely committed to
doing everything I can to bring high-quality, 21st century jobs to Iowa, and the Google jobs we are announcing today
certainly qualify.”
Google Inc. will pay an estimated $65 million in property taxes over the next 15 years. This revenue is the equivalent of the property tax collected annually from 3,771 homeowners, based on the median property taxes paid in 2000. Google also will pay an estimated $6 million in sales taxes in just the next 2 years from the purchase of building materials, hundreds of thousands of dollars per year in electricity franchise fees and income, payroll and other taxes when operating the facility.
Google Inc. has made a concentrated effort to use as many local vendors and suppliers as possible so that the economic impact of this investment will have the greatest benefit. In fact, the company has hired local engineering and construction firms for the preparation and building of the data center site so that this investment becomes not just an economic entity, but also a good neighbor in the community.
“We are very pleased that Google selected Council Bluffs for such a large investment.” said Bob Mundt, President and CEO of the Council Bluffs Area Chamber of Commerce. “I think it demonstrates that all the hard work the community has put in to make Council Bluffs an attractive place for business has paid off.”
Google’s Iowa Project Fact Sheet
Investment
- Planned investment of $600 million for a data center project -- two facilities, including retrofit of an existing vacant industrial building. Construction has already begun on the first facility and we plan to begin the second once the first is completed.
- Investment includes purchase of the existing building, land, site preparation and infrastructure, construction, computers, and other equipment.
- Expansions are possible, but the company has no definite plans at this time.
Location
- 3 parcels (of about 55, 130, and 1000 acres, respectively) for a total of approximately 1185 acres. This provides extensive room for growth beyond the 2 data center buildings that are currently planned. The building currently under construction is on the 55 acre parcel. We are still evaluating the development potential of the other two parcels and we look forward to working with the city of Council Bluffs, Pottawattamie County, and CBIF on the evaluation.
Jobs
- Once fully operational, Google expects the data center complex to be staffed by up to 200 workers.
- Full-time Google employees will earn an average salary and benefits equal to about $50,000. These positions include Facilities Support (HVAC, maintenance), Systems Administration (software technicians) and Data Center Technicians.
- Additional support services will be retained via contract (security, catering, grounds keeping, etc.).
Facilities
- A data center, in very simple terms, is a specialized building that contains a lot of computers – the machines that run Google's services.
- Google is building new data centers to support the strong and growing demand for its online services.
- Planning to start operation in part of first facility by Spring 2009
Economic Impact
- The project will bring around 200 permanent jobs (if not more from possible future expansions, if any), many more jobs from the construction, more demand for supplies and services from local businesses, and a substantial increase in the tax base.
- During the initial phase of construction, our contractors will likely be staffing up locally, utilizing local subcontractors and patronizing local businesses. We believe the project will spur additional new business interest and activity in this area.
Background
Google has a strategic interest in the central region of the United States. The region is a busy crossroads of
Internet activity, and Google has had to make sure it can process requests from customers and prospective customers
living in or traveling through this broad and diverse region. In late 2006, the company looked at states from the
Appalachians to the Rocky Mountains as possible hosts for data center facilities before deciding to start the project
in Council Bluffs. Another project near Pryor, Oklahoma was also recently announced.
Economic Development Incentives
Taxes Google will pay (after all economic development incentives)
- Property taxes: we expect to pay about $65 million in real property taxes (city% and county% - TBD)
- Sales tax: Estimated $6 million in just the next 2 years from the purchase of building materials
- Local electricity franchise fees: Hundreds of thousands of dollars per year
- Other: Payroll taxes (with the exception of any rebates obtained through the Targeted Jobs Withholding Program, if any), sales tax from non-exempted purchases, corporate income taxes.