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Google inaugurates $600 million data centre in Oregon – but what does the state get?

Fri 10 Apr 2015

Google has today officially opened its new 164,000 square foot data centre in The Dalles, Oregon. The facility is said by Google to have cost $600mn (£400+mn), but has been able to take advantage of Oregon’s very favourable DC-attracting tax environment – which has also proved attractive to Facebook, Apple and Amazon, which also operate data centres in the state.

Depending on Google’s IT spend, it will save undisclosed millions annually by not having to pay state sales or property taxes on the Dalles plant. However Oregon negotiated a deal where Google compensated the city and the county for lost property tax revenue in a sum totalling $1.2mn (£820,000). Dalles city manager Nolan Young said of the deal “We’ve already got projects going using those funds,” and noted that the payment had funded new swimming pools and a new fire station.

Additionally Google – which instituted its first data centre in the state in 2006 – will raise its stipend to local governments from $250,000 to $800,000 p/a.

The deal for the data centre hit a stumbling block recently when plans abutted against one of Oregon’s more eccentric piece of tax legislation, which determines property values based on the wealth and profile of the occupying brand. However Oregon Governer Kate Brown exempted data centres from the tax last week, in a move which is reported to have re-attached Apple to Oregon as a DC base.

Additionally the relaxation of the ‘brand tax’ has paved the way for Google Fiber to go ahead with its plans to bring new connectivity to the state, declaring that without the exemption the new infrastructure plans would have been ‘extremely unlikely’. The exemption is currently being ratified in a bill passing through the Oregon legislature.

The new Dalles facility will provide employment for approximately 175 people, 90 of which are contractors, and, as is customary in DC invasions, the benefit to local franchised electricity providers is cited as worthwhile.

The question of the worth that data centres bring to the communities where they are installed is one that is set to grow, with improved PuE off-setting electricity franchise benefits, and most installations providing little employment to local residents.


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