Google deal explored

The city and county were told by 19 speakers that Google, the world’s third largest corporation, could afford to pay its “fair share” of taxes.

“Why are we happy with the crumbs from Google’s table?” asked resident Chip Wood. “Google is here and we should use their tax dollars.” There was standing room only in the third floor courtroom and some audience members asked for more time to scrutinize the proposal unveiled by city and county officials on July 27.

“You gave us no time for review,” said Rodger Nichols, news director at Haystack Broadcasting who has long been an opponent of Google getting tax breaks.

PROPERTY CONCERN

Port Commissioner Mike Courtney, the sole vote against the agency selling 23 acres of prime industrial land on River Trail Way to Google, expressed concern about The Dalles becoming financially dependent upon one company.

“I don’t have a problem with Google,” he said. “What I do have is a problem with the amount of land the company is going to take over.”

He said the economy of The Dalles had been decimated by the closure of the aluminum plant so it was important to diversify the job base.

He said industrial lots needed to be sold wisely as they were in limited supply due to growth constraints imposed by the Columbia River Gorge National Scenic Area.

“What happens when technology changes and they don’t need this place anymore?” asked Courtney.

COMPANY SUPPORT

Nineteen citizens and representatives from Oregon Cherry Growers, Oregon State Extension Service, and The Dalles Area Chamber of Commerce supported the deal negotiated over an eight-month period by city and county officials.

“Google has been a tremendous partner for us and continues to be,” said Candy Armstrong, superintendent of D21.

She said Google was highly supportive of education and always willing to lend assistance with robotics and other programs.

Seven citizens asked general questions at the public hearing and one said he was “conflicted” and didn’t know whether to support or oppose the proposal.

BACKGROUND

Seated on the local negotiating team was: The Dalles Mayor Steve Lawrence; Nolan Young, city manager; Wasco County Commission Chair Scott Hege; and, Tyler Stone, county administrative officer.

The agreement they came up with has Google paying an initial fee of $1.7 million and at least $1 million annually for 15 years.

The tax break is made possible by the state-designated Enterprise Zone that incorporates the port’s property.

According to information provided Tuesday morning by Hege, there are 68 Enterprise Zones in Oregon — 53 in rural areas and 15 in urban centers —that are intended to intensify economic activity in areas with higher levels of poverty and joblessness.

Companies receiving a property tax break within a zone must guarantee to invest a minimum of $200 million and create at least 10 new jobs that pay 150 percent of the average annual salary in the county.

In Wasco County, the average salary is figured by city officials to be roughly $30,000, which means that Google would have to pay an average of about $45,000 per year to its workers.

The company has told local government leaders that it expects to employ 50 more people in the new data center for a total workforce of about 200 people.

Hege said 80 percent of Google’s employees currently live in the gorge and about 50 percent reside in Wasco County.

Lawrence told audience members there could be no extension of a 15-year agreement, which opponents had speculated would happen.

Rep. John Huffman, R-The Dalles, also addressed a concern expressed by opponents that Google donated to the campaigns of local and state officials, which would influence their decision.

“Google only donates to federal campaigns so nobody here is getting any money,” he said.

HOW IT WORKS

City and county officials – Commissioner Rod Runyon was not present – were asked repeatedly to provide more information about how the deal had been reached, and if Google could have been pressed to pay more taxes.

Lawrence said the terms of the confidentiality agreement would not allow officials to provide that information.

“Over eight months, I can assure you that every single possibility was explored,” he said. “I believe that we negotiated a really good deal.”

Lawrence pointed out that both the initial and annual payments were much higher than amounts in the first two Enterprise Zone agreements

Google is in the ninth year of its original 15-year tax waiver on its 30-acre Steelhead Way property. Since turning over the initial fee of $250,000 in 2006, the company has been paying $250,000 each year to the city and county.

The second agreement, signed in 2013, will begin its 15-year period in 2016. Next year, Google begins paying $800,000 each year for the new data center on eight acres of the original property. The initial fee of $1.2 million has already been paid.

Lawrence said the proposed data center would go online in 2018 and, over the course of the next 13 years, the city and county would receive at least $26 million in revenue.

Hege said that number could be much higher since the fees has been based on the size of the existing data center. And the new facility was expected to be much larger — or there could be multiple buildings in the complex.

The amount paid by Google will be figured on 16 cents per cubic foot for the initial fee and 11.4 cents for the annual fee.

Hege said Facebook was providing Crook County with only $110,000 per year for 15 years and similar fees were being paid by other data centers in Enterprise Zones around Oregon.

The city and county share the money from Google with other public entities.

WRAPPING UP

Huffman urged local government leaders to let other agencies decide how to use any new funds and not restrict them to use for a specific purpose.

After listening to citizens speak out, some of the elected officials shared their thoughts.

City Councilor Russ Brown told the audience that, while he would like to see companies move into town that offered 20 or more jobs, that was not happening in the current economic climate.

“They are just not out there,” he said. “So, this is probably our best reality — if that ground (industrial park) sits empty for 15 years, it’s paying nothing.”

Councilor Dan Spatz said he had not yet made up his mind about the proposal.

“I think there’s some good questions here, and I have some myself,” he said.

Spatz was followed in comments by Councilor Tim McGlothlin.

“I have an open mind as well. I have listened here and will make the best decision for our community,” he said.

The other elected officials at the public hearing provided no comment about the agreement.