The current unemployment rate in Minnesota is 2.8%. The current unemployment rate among tech workers is less than 1%. This will not generate anywhere near the pie-in-the-sky numbers presented in any findings. At best it will ever-so-slightly increase the tax base by giving a small raise to a tiny handful of individuals. The workers building the actual datacenter will almost assuredly be in-state construction workers whose salaries will not change as a result of the project, this is just one more project to add to the list.
Furthermore, once again, Minnesota already has a glut of datacenters both public and private. none of the "other benefits" even apply. They aren't putting this up in the middle of nowhere Montana. While it is admittedly presumptuous of me, I'm going to assume you have absolutely no idea what the tech industry in Minnesota looks like.
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.
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.
that seems to be a much better article, but still doesn't elaborate on that "shortfall". The Taxnotes article makes this seem like a much better deal for the down, and a much more reasonable ask from google. They are effectively asking that they be granted a reduced increase in taxes on the proposed vast increase in property value from the value of their development"
>The county assessor valued the land at $1.76 million, and the city estimated that the property's market value upon completion would be $41.6 million. Local real estate taxes on the property are around $16,476 and are estimated to jump to $328,726 after the facility is built. Jet Stream requested property tax breaks for 20 years for the data center, but not school district tax abatements.
If they're looking to build a data centre in one place its because it fits their huge list of criteria. Tax breaks are just icing on the cake. They want a data centre here regardless.
I can only surmise that their list of criteria was limited to "minimize dollars per square foot in rent per month" and "vaguely somewhat near a metro area."
I'm sure there's others, latency to customers and real estate cost like you mentioned. Connectivity, construction costs, political stability.
Or, as AOC would say: saves $15m.
Data Centers: Jobs and Opportunities in Communities Nationwide https://www.uschamber.com/sites/default/files/ctec_datacente...
It covers: Initial capital and operational expenditure, economic impact, spillover benefits, etc
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.